WAG 08-01-02-b: Initial Employment Deduction (New Request for TANF Cash)

PM 08-01-02-b

See WAG 25-06-18 for current and historical data on the Initial Employment Deduction.

Examples of calculating the IED

The following are examples of how the IED is calculated on new request for TANF cash.

Example 1: Ms. Anders applies for TANF cash for herself and her four children. She has earned income of $800 per month. The IED is calculated as follows: 

  • Calculation of Ms. Anders' IED
    • Revised manual text$35,140 (Annual FPL for 5 people)
    • divided by 12 months
    • equals Revised manual text$2,928 (Monthly FPL for 5 people)
    • divided by 2
    • equals Revised manual text$1,464 (1/2 of the monthly FPL for 5 people)
    • minus $812 (TANF Payment Level)
    • equals$541 IED Amount $652 (IED amount)

Ms. Anders passes the 30-Day Test for eligibility with countable income of $259$148 ($800 earned income minus $652 IED) which is less than the TANF Payment Level for the household size of 5. 

Example 2: Mr. Rain and Ms. Quinn apply for TANF for themselves and their four children in common. Mr. Rain has earned income of $2,400 per month. Ms. Quinn has earned income of $1,200 per month. The IED is calculated as follows: 

  • Calculation of Mr. Rain's IED
    • Revised manual text$40,280 (Annual FPL for 6 people)
    • divided by 12 months 
    • Revised manual textequals $3,357
    • divided by 2
    • equalsRevised manual text $1,679
    • minus $930 (TANF Payment Level)
    • equals $620 IED amount$749 (IED amount)
  • Calculation of Ms. Quinn's IED
    • Revised manual text$40,280 (Annual FPL for 6 people)
    • divided by 12 months 
    • equals Revised manual text$3,357
    • divided by 2
    • equals Revised manual text$1,679
    • minus $930 (TANF payment Level)
    • equals $620 IED Amount$749 (IED amount)

IES will calculate the IEDs for both incomes separately and then display the total on the 30-Day Test Eligibility Summary segment.

Mr. Rain and Ms. Quinn fail the 30-Day Test for eligibility as countable income exceeds the TANF Payment Level for their household size. Mr. Rain's countable income of $1,780 countable income$1,651 ($2,400 earned income minus $620 IED amount$749 IED), plus countable income for Ms. Quinn of $580 countable income$451 ($1,200 earned income minus $620 IED amount$749 IED) for a total countable income of $2360 countable income$2102, is over the TANF Payment Level for a household size of 6 ($930). The TANF EDG will be denied in IES and eligibility for medical programs should be completed.

Special budgeting situations:

To determine family size for an ineligible parent, see PM 10-04-01. To determine family size for an excluded spouse when Parent Liability does not apply, see PM 10-04-03. To determine family size for Parent Liability, see PM 10-04-04. 

Parent Liability

The Jones household consists of 6 individuals. Mr. and Mrs. Jones, their 3 minor children, Timmy, Tommy, and Tonya. Tonya also has a minor child of her own. Mr. and Mrs. Jones do not receive any assistance.

Tonya is an unmarried 16-year-old applying for TANF for herself and her child. She lives with her parents and her 2 younger brothers.

The Parent Liability Unit size is 4, including Mr. and Mrs. Jones and their 2 sons. Do not include Tonya and her child when determining the Parent Liability Unit size.

The TANF Household size used for determining eligibility and grant amount is 2, for the Adult and Child Payment Level (Tonya and her child).

Ineligible Parent with no children eligible for TANF

The Anders household consists of 5 individuals. Mr. Anders and his minor child and Mrs. Anders and her two minor children. Both Mr. and Mrs. Anders are employed and have earned income.

Mrs. Anders applies for TANF for herself and her 2 children. Both Mr. Anders and his child are ineligible non-citizens and are ineligible for TANF.

The household size for the IED calculation is 3, Mrs. Anders and her two children. Mr. Anders' income is not budgeted as he has no children receiving TANF.

Ineligible Parent with children eligible for TANF

The Barnes household consists of 5 individuals. Mr. Barnes, his minor child, Mrs. Barnes, her minor child, and an additional minor child in common. Both Mr. and Mrs. Barnes are employed and have earned income.

Mrs. Barnes applies for TANF for herself and her 2 children. Both Mr. Barnes and his child are ineligible non-citizen and are ineligible for TANF.

Because Mr. and Mrs. Barnes have a child in common, both parents' income would be budgeted for TANF.

Mr. Barnes' IED household size is 2, himself and his ineligible minor child.

Mrs. Barnes' IED household size is 3, herself and her two eligible children.

IES will calculate the IEDs for both incomes separately and then display as a combined amount on the 30-Day Test Eligibility Summary segment.

Excluded Spouse 

The Canyon household consists of 6 individuals. Mr. Canyon, Mrs. Canyon and her 4 minor children. Both Mr. and Mrs. Canyon are employed and have earned income.

Mrs. Canyon applies for TANF for herself and her 4 children. Because Mr. Canyon has no eligible children, he is considered, an Optional Person and Mrs. Canyon chose to exclude him from the TANF unit. However, because Mr. Canyon is excluded as an Optional Person, his income is budgeted toward the support of his spouse.

Mr. Canyon's IED household size is 1, himself. Mrs. Canyon's IED household size is 5, herself and her 4 children

Treatment of earned income when a former client stops receiving child support

Example: Ms. V receives TANF for herself and her two children. The TANF Payment Level for Ms. V is TANF Payment level for 3 is $576$576 (one adult and 2 children). Ms. V reports employment earning Revised manual text$3,000 each month. Child support in the amount of $250 is also being paid to the Division of Child Support Services (DCSS). Allow the $200 Pass Through. $50 of child support is retained by DCSS and considered exempt income.

  • The TANF calculation is as follows:
    • $2,200 Gross Income$3,000 Gross earned income
    • minus $1,650 three fourth income deduction$2,250 3/4 income deduction
    • equals $550 earned income$750 earned income is budgeted
    •  Revised manual text$750 is compared to $576 (TANF payment level of 3)

Since the earned income budgetable income $550($750) is greater than the TANF payment level Ms. V is ineligible for TANF. The cash assistance is stopped effective October.

In December, the child support stops and Ms. V requests cash assistance. Ms. V reports she now earns $1,500 a month beginning December. Do not apply the first eligibility test using the IED. Apply the 2nd eligibility test. Ms. V is eligible for cash.

  • The calculation is as follows:
    • $1,500 Gross earned income
    • minus $1,125 3/4 income deduction
    • equals $375 Compared to the Payment Level of TANF payment level $576$576

Since $375 is less than the Payment Level of $576 TANF payment level$576 Ms. V is eligible for cash benefits under TANF.