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Library: Policy

340:40-7-13. Computation of income

Revised 3-1-19

(a) Ongoing income. Income from an ongoing source received regularly but in amounts that vary, or income received irregularly, is averaged over a minimum of 30-calendar days unless the client has not received at least 30-calendar days of representative income.  1 This includes overtime pay, irregular child support, and other occasional increases or decreases in monthly gross income. When income is received more often than once per month, the income is converted to a monthly amount.  2

(b) Income verification. The worker verifies the household's income using the best available information.  3

(1) When at application or renewal the person received at least 30-calendar days of income, the best available information is normally the person's pay stubs or an employer statement. When neither source is available, the worker uses whatever records are available that best establish the income already received and expected for future months.  4

(2) When the client's ongoing employment income changed and the last 30-calendar days of income is not indicative of future earnings, the best available information may be an employer statement. When work hours remain the same but the client received a pay raise, the worker averages the person's work hours over the last 30-calendar days and multiplies the averaged hours by the new pay rate.  5

(3) For earned income, pay stubs are used for verification only when the client's name or Social Security number, date(s) of the pay period, and amount of income before deductions are shown on the pay stub. When this information is not shown on the pay stub, or pay stubs are not available, phone contact with the employer or an employer statement is required.

(4) When a household member starts a new job, the worker verifies the person's start date, date the first full paycheck is expected to be received, hourly rate, and anticipated number of hours per week.  6

(c) Income calculations at initial certification. For an initial certification, the worker calculates income using procedures in (1) through (4).

(1) When household income is ongoing, the worker uses actual income received for the approval month, except when:

(A) all income for the month has not been received and verified. When this occurs, the worker uses any full representative paychecks to anticipate income not yet received for the approval month and future months; or

(B) the person received an additional check in the approval month due to a third or fifth week. When this occurs, the worker averages the last 30-calendar days of income for the approval month and future months.

(2) When income is ongoing and actual income is used for the approval month, the worker averages the last 30-calendar days of representative income and converts it to a monthly amount for the following month.

(3) When income is from a new source and the person did not receive any income as of the approval date, the worker does not consider income for the approval month per Oklahoma Administrative Code (OAC) 340:40-7-10.

(A) Income expected to be received in the month following the approval month is anticipated and considered when a full check is expected to be received on or before the first of the month following the approval month.  7

(B) When only partial earnings are expected to be received in the month following the approval month, earnings are not considered until the next month.  8

(4) The worker adds together all countable earned and unearned income to arrive at the household's gross income.

(d) Income calculation at renewal. To calculate income at renewal, the worker determines eligibility based on circumstances anticipated for future months using the best information available.

(1) The worker adds together all countable earned and unearned income to arrive at the household's gross income.

(2) When the household reports earned income from a new source at renewal, the worker considers the earned income effective the first month a full check is expected to be received by the first of that month.   • 9

(e) Income deduction. After computing gross income, the worker subtracts any verified, legally-binding child support payments paid by a household member to or for a non-household member, including child support and child care support payments made to a third party on behalf of the non-household member.   • 10

(f) Income eligibility threshold. The worker uses Oklahoma Department of Human Services Appendix C-4, Child Care Eligibility/Copayment Chart to determine if the household meets the income threshold, per Section 98.20(a)(2) of Title 45 of the Code of Federal Regulations.


Revised 3-1-19

1. (a) When ongoing income fluctuates to the extent that a 30-calendar day period does not provide an accurate indication of anticipated income, a longer period of past income may be requested and used to determine representative income.

(b) When the worker computes income in the same case for multiple programs and the programs compute income differently, the worker may use the "total diverted" field E47 in the Family Assistance/Client Services (FACS) Eligibility Notebook Child Care tab (Section E) to ensure income is correctly computed for child care. The "total diverted" field is most often used for the initial approval month when other programs count anticipated income before the applicant receives a full paycheck. The worker, in this instance, removes income from the divert field effective the month the income is countable.

2. (a) When the amounts to be converted differ, such as fluctuating daily, weekly, or biweekly amounts, the worker obtains an average and the average is multiplied by 4.3, 2, or 2.15, whichever is applicable.

(1) Income received on a daily basis is:

(A) converted to a weekly amount and multiplied by 4.3 when there is a consistency in days worked each week and there is a regularity of pay dates; or

(B) averaged by calendar month when received at irregular intervals and there is no consistency in the work offered or when pay is received;

(2) weekly is multiplied by 4.3;

(3) twice a month is multiplied by 2; or

(4) every two weeks is multiplied by 2.15.

(b) The worker carries cents through all steps and then rounds to the nearest dollar when arriving at the monthly amount. The worker rounds one cent through 49 cents down and 50 cents through 99 cents up. The worker records income in the FACS Interview Notebook under the Income tab.

3. (a) Terminated income is counted only in the month received.

(b) Refer to Oklahoma Administrative Code (OAC) 340:40-7-10(c) for information regarding when to start counting income from a new source.

4. The worker documents in FACS Case Notes how income was calculated and why the person's paystubs or an employer statement was not available.

5. (a) The worker uses the best available information and documents how income was calculated in FACS Case Notes. For information regarding self-employment income calculation, refer to OAC 340:40-7-11(b)(2).

(b) When computing on-going income using pay stubs, the steps in (1) through (5) of this Instruction ensure more accurate earned income calculation.

(1) The client must provide the most recent 30-calendar days of pay stubs, when available.

(2) When consecutive pay stubs are not provided but pay dates are on the pay stubs provided, the worker may use the 'missing pay stub calculator' on Quest to calculate the missing pay stub amount.

(3) Gross income amounts are used in the calculation process.

(4) When hours worked fluctuate each pay period, the worker discusses the reason for varying hours, such as the employee missing work due to illness or hours fluctuating due to the amount of work performed with the client. The worker documents the discussion in FACS Case Notes.

(5) The worker only uses pay stubs he or she determines are representative of future earnings for future months. When the worker excludes any pay stubs, he or she documents the reason they were excluded in FACS Case Notes.

6. When the client has not received a full paycheck from new employment, it is appropriate to use an employer's statement or an employer-completed Form 08AD094E, Employment Verification. When the worker uses an employer's statement to calculate income, the income is converted to the 4.3, 2, or 2.15 calculation methods. For new self-employment, refer to OAC 340:40-7-11 Instructions to Staff # 6 and OAC 340:40-3-1(b).

7. When the client begins new employment earning less than minimum wage but receives tips, such as $2.13 per hour plus tips, the income must be calculated using minimum wage multiplied by hours worked unless the employer refuses to supplement wages to at least minimum wage. In this circumstance, the worker denies the application and refers the client to the Oklahoma Department of Labor to file a complaint.

8. (a) When income is not considered in the approval month but needs to be considered for future months, the unfinished issuance process is used so the family share copayment does not lock incorrectly.

(1) When a client has not received a full paycheck from new employment for the month of approval but will receive a full paycheck on or before the first of the second month, the worker diverts income from the new employment for the approval month and considers anticipated income in the second month of approval.

(2) When the first full paycheck is received after the first of the second month of approval, income from the new source must be diverted for the second month and the total anticipated income from the new employment is considered for the third month of approval.

(b) When the applicant is eligible for child care for the month of application because income from a new source is not considered, but is not eligible, per DHS Appendix C-4, Child Care Eligibility/Copayment Chart, for the next month when income is considered, the worker uses the unfinished issuance process to approve child care benefits for the application month and closes child care benefits for the next month. For unfinished issuance coding instructions, refer to the Unfinished Issuance Examples & Coding article in Quest.

9. When at renewal, the client starts new employment and has not received a full paycheck for the first month in the new eligibility period, the worker must:

(1) divert any income from the new employment for the first month of the new eligibility period;

(2) ensure the existing child care authorization is coded with the need factor of employment;

(3) send a Remedy ticket detailing what income must be considered for the second or third month of the eligibility period depending on when the first full paycheck is received. Remedy staff makes the income adjustments; and

(4) send the client Form 08MP038E, Client Notice on Action Taken, to inform him or her of the copayment changes.

10. (a) Child support is defined as any money court-ordered and designated to be paid for the support of a child. This may include, but is not limited to:

(1) child support, child support arrearages, medical insurance or other health care premiums, child care obligations, or other obligations specified in individual court or administrative orders; or

(2) money owed to a state for benefits provided for a child including, but not limited to, Temporary Assistance for Needy Families (TANF), SoonerCare (Medicaid), and foster care.

(b) Before allowing a deduction for legally-binding child support payments, the worker obtains proof of the amount ordered and the actual support payments made each month.

(c) The worker enters the amount of child support paid to or for a non-household member in the Child Care tab of the FACS Eligibility Notebook in the "child support deduction" field (E46).

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