Income Verification

Created on: 
Feb 01 2016

Table of Contents

Related WACs

DEL Clarifying Information (published February 1, 2017)

WAC 170-290-0012

Earned Income

  • At the time of application and reapplication processing, if verification of new employment is not available, consumers may provide a written or verbal estimation of their schedule and anticipated income for the first 60 days of new employment. If the consumer does not supply third party income verification within 60 days the case will be terminated and the worker should look into an overpayment for the care used during that timeframe.

  • The estimate will be used to determine eligibility and copayment. A consumer’s copayment may be increased or authorization reduced if the 60 day verification shows that the monthly income is more than the estimated amount, if the higher income would have resulted in a higher copayment or reduced authorization. The consumer may incur an overpayment if the copay was calculated incorrectly.

  • A full 3 months of wage verification is not required if the information supplied can be used to determine a verified average monthly income

Applicant Name

A consumer’s name must match the name on their income verification documents. Staff will ask for additional information if questionable.

Additional Information

How is income verified?

The Department must first determine if the client has new or existing employment.

New: When the client has less than 3 full months of wage stubs.

Existing: When the client has 3 full months of wage stubs.

Gross Wages: Total earned income before taxes and other voluntary deductions are taken out.

For new employment:

  • The Department will use the employer’s verbal or written statement of anticipated gross wages.
  • If the employer is unavailable by phone, clients may provide a written or verbal statement of anticipated earnings.
    • An application submitted by paper or online with anticipated earnings is considered a written statement.
  • When the client provides a written or verbal statement of anticipated earnings, the Department will approve the case if the client is otherwise eligible and send an Eligibility letter giving them 60 days to provide actual wage stubs.
    • Note: When a client provides wage stubs, it is not necessary to have every wage stub if the information provided is enough to determine average monthly income.

 

Example 1: A client works at Amazon and has been employed for two months. Because there isn't’t three months of wage verification available it is considered new employment. Before pending, the Department attempts to call the employer to verify the start date, rate of pay, hours per pay period and pay frequency. If the employer provides a statement, no further verification is necessary. If the Department is unable to reach the employer, it accepts the client’s statement and approves the application.  An Eligibility letter is sent to the client giving them 60 days from approval to provide actual wage stubs or a completed Employment Verification form.
  • When the income verification is returned within 60 days and the rate of pay and activity hours are consistent with what was reported at application or change, no further action is required.
  • If the rate of pay or hours worked are significantly different from what was initially reported, the Department will confirm that the client remains income eligible and may recalculate the copayment.
  • If the client doesn't return income verification within 60 days of approval their child care benefits will be terminated with 10 days advance notice and an overpayment may be established. 

For existing employment:

The Department uses

  • Gross income for the last three months. Three months of wage verification is not required if the information supplied can be used to determine average monthly income.
Example 2: A client calls to complete their review. The client works at Walmart and is paid weekly. They have been working there for eight months. The eligibility worker uses systems available to the Department and is able to determine the client’s average monthly income and hours per week. The client provides a statement of their schedule which is supported by the wage verification in TALX.  The worker is able to complete the review without pending for additional income/schedule information.
Example 3: A review has been pended for income verification. The client returns one pay stub for a pay period within the last 30 days. The client has worked at US Bank for six months and is a salaried employee with not tips, or bonuses. The wage stub is consistent with what was reported on the reapplication and verified when hired. The YTD income can be divided by the number of months worked in the year, to determine gross monthly income for the previous 3 months.  Documenting that this worker is salaried with no fluctuation in wages is key to using the 1 wage stub with the monthly amount combined with the YTD amount.
Example 4: A client called to apply for CCSP and states that he has been working at Target for five months. He works 25 hours per week, is paid weekly. The employer was unable to verify income over the phone, and the application was pended for income verification. The client provides five pay stubs, but they are not consecutive. The wage stubs are consistent with what was reported on the application. The Department is able to determine the gross monthly for the previous 3 months using the wage stubs provided with the YTD amounts.
Example 5: Client sends in 1 wage stub showing gross income of $700 for this pay period and a YTD amount of $3465.  The clients work schedule varies.  We have no way of knowing how much of the $3465 was earned in the last 3 months.  This is not sufficient to determine the gross monthly income for the previous 3 months and additional information is needed before approving the application or review.
  • An employer statement by phone or in writing of paid gross wages for the past three months of employment.
Example 6: Using Example 2 above, except the worker is unable to verify income. The Department attempts to call the employer to obtain verbal or written wage verification. If the employer is able to verbally verify gross income and hours worked for the past three months, no further verification is required. If the employer is unable to verify income for the past three months, the case is pended for three months of wage verification.
Example 7: A client submits a reapplication without wage verification. They have been working at Bright Now Dental for 18 months. Wage information is not available in any systems, there are no current wage stubs on file, and there is no recently verified earned income documented. The worker attempts to call the employer to obtain verbal or written wage verification. If the employer is able to supply gross income and hours worked for past three months, the worker uses the employer statement as verification. If the worker is unable to reach the employer to verify income, the case is pended for three months of wage verification.
Example 8: Using Example 7, but instead the wage stub shows the client worked only 20 hours in a two-week period, but reported a 40-hour-per-week schedule on the reapplication. Because this is inconsistent with what was reported on the reapplication, additional information is needed. The worker attempts to call the employer to verify income and hours worked for the past three months. If the employer is able to supply gross income and hours, no further verification is required. If the employer is unable to verify the income and hours worked for the past three months, the reapplication is pended for wage verification.
Example 9: Half way through the eligibility period the client calls to report their hours have been reduced. The Department advises the client that they are not required to report these changes and that they can continue to use their full time child care.  The Departments confirms with the client that the reduced hours are expected to be permanent and explains that if the client can verify the pay reduction that the monthly copayment may be reduced.  The Department attempts to contact the employer over the phone, and confirms the reduced hours.  The copayment is recalculated and reduced the first of the following month. 
  • The client’s tax return with all of the W-2s from the previous year.
    • When using tax return and W-2s, the Department must verify the client has worked for the entire previous year in the same or similar job field in order to budget the income correctly.

Who determines which option is used to verify income?

The Department will use whatever method that is easiest for the client and provides an accurate estimate of earnings and schedule.

How is child support income verified?

When a client receives child support income from the Division of Child Support, staff will use SEMS to determine the average amount received for the past three full months. 

When a client reports receiving court-ordered child support, the Department needs a copy of the court order and the client’s verbal or written statement regarding the amount received in the past three full months. When a client reports receiving an amount that is different from what is on the order, the Department will use the client’s statement to determine the average monthly amount to budget. 

When a client receives child support through an informal agreement, staff will ask for a signed written statement from the non-custodial parent detailing the amount of support paid/received for the last three months. If the custodial parent is unable to obtain the statement from the absent parent, staff may accept the client’s written statement as verification and will document the circumstances. 

When a client receiving child support under a court order or an informal agreement reports that the income has stopped or been reduced for at least one full calendar month, staff may accept their statement unless the change would reduce their monthly copayment.  If the change reduces the copayment, a signed statement from the NCP will be requested before lowering.   If the custodial parent is unable to obtain the statement from the absent parent, staff may accept the client’s written statement as verification and will document the circumstances. 

 

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