01.02.02 - Non-Exempt Income

Effective Date: 07/02/20
Revised:  10/12/07; 01/01/13; 12/24/2013; 07/01/15, 07/06/15, 07/02/20, 10/30/20, 12/1/22, 02/26/24

Reference:  89 Ill. Adm. Code, Chapter IV, §50.235

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Policy Statement:

Include all non-exempt income received by a family in the income calculation.

Following is a list of non-exempt income:

1. Gross base wages and salary, tips and commissions earned on a regular basis, excluding inconsistent pay for overtime, incentives, bonuses, sick, vacation, travel reimbursements or other types of non-recurrent or inconsistent income.
   1. Exempting sick, vacation or overtime pay should have no negative effect when determining eligible days. 
2. Net income from farm self-employment.
3. Net income from non-farm self-employment.
4. Dividends, interest, net rental income, and royalties.
5. Pensions and annuities.
6. Veteran's pensions.
7. Unemployment compensation.
8. Worker's compensation.
9. Shift/day/zone/site differential, etc. (anything that is paid at a very low rate).
10. Earning of a household member aged 21 and older who is not the client's children.

 Non-Exempt Hours

Include all the hours that are paid at a regular rate or higher when determining the eligible hours from payroll check stubs:

1. Regular worked hours.
2. PTO.
3. Holidays.
4. Sick/personal leave, Vacation, Jury Duty, etc.
5. Straight time
6. Overtime

Procedure:

Calculating gross base wages and salary

1. Calculated by multiplying the number of hours worked by the hourly wage plus tips before any deductions for taxes, pensions, or garnishments.
2. Pay for overtime will not be included when calculating income.
3. Special rates and/or add-ons for shift differential should be included if they are part of the hourly rate of pay.

Income from Commission

1. If commission is on both check stubs, include the amount that is included in gross earnings on both stubs when calculating income.

Income from Tips

1. A client who receives tips from their work must report them as income. Income from tips can be documented in the following ways:
   1. on the client's pay stubs.
   2. IRS Form 4070.
   3. a tips ledger or letter from the employer.
   4. a ledger completed by the client.
2. If a client holds a job that would normally receive tips, especially when the hourly wage is below the State minimum wage, and none of the above documentation is available:
   1. instruct the client to begin documenting tips in one of the methods listed above.
   2. add 10% to the calculated monthly income amount.
   3. reassess the income at the next scheduled Redetermination or if the client provides documentation of income from tips of less than 10%.

Other Inconsistent Income

1. Pay that is listed as overtime, incentives, bonuses, sick, vacation, travel reimbursements or other types of non-recurrent or inconsistent income should be deducted from the gross income amount of the pay documentation.
2. Days taken off of work for sick, vacation, or other reasons should not be deducted from the client's activity schedule when determining the number of eligible days to approve.
3. Hours worked overtime that appear on pay documentation should be included when determining the number of eligible days.

• Example 1: Determine the non-exempt incomes and hours from the pay stub below:

Type	Hours	Rate	Current	Year-to-Date
ELIG	64.00	18.5	1184.00	8991.00
VAC	8.0	18.5	148.00	269.00
INELIG	1.0	18.5	18.5	190.55
OT PREM	1.0	9.25	9.25	86.03
HOLIDAY	8.0	18.5	148.00	148.00
TOTALS	82.0		1507.75	9684.58

• Answer: the incomes and hours that need to be included are as follow:

Non-Exempt Income Types	Non-Exempt Income Amount
ELIG	$1,184.00
TOTAL	$1,184.00

Non-Exempt Hours Types	Non-Exempt Hour Amount
ELIG	64.0
VAC	8.0
INELIG	1.0
Holiday	8.0
TOTAL	81.0