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Issue Alert - 03-10-05

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Date:

Oct 01, 2003

Issue Summary:

FIA has clarified the policy for calculating projected monthly income for customers who are self-employed.

Persons Affected:

Self-employed persons applying for FIA, SDA, CDC, or FAP


Background

Family Independence Program (FIP), State Disability Assistance (SDA), Child Day Care (CDC) and the Food Assistance Program (FAP). PEM 505.

What's Happening?

FIA has issued guidelines for caseworkers on how they should calculate projected new self-employment income and changes in self-employment income. The policy states that the caseworker should work with the client to reach an agreement on what gross income the client expects to earn each month in the coming months. Unless an interim change is reported during the certification period, this projected amount will be re-examined at re-determination. At that time the worker may look at past income as additional information to help project future earnings. FIA will then deduct expenses for self-employment. These are either 25% of the gross or actual verified expenses of self-employment (if desired and if higher than 25% of gross).

What Should Advocates Do?

Advocates should tell clients who are self employed to discuss with their caseworkers a realistic gross income amount from self-employment. The client may need to bring in proof of revenue if there is a dispute. If the clientÂ’s expenses are more than 25% of gross, the client should bring in proof of these expenses so that they can be deducted.

What Should Clients Do?

Clients who are self-employed should discuss with their caseworkers a realistic figure from self-employment. Clients who wish to claim more than 25% in expenses, should be prepared to document their business expenses.

If the client cannot come to an agreement with the caseworker, he or she should contact the supervisor for assistance, or request a hearing if the caseworker uses a monthly income amount that is not appropriate.

Finding Help

Most legal aid and legal services office handle these type of cases, and they do not charge a fee. You can locate the "free" legal services or legal aid office that serves your county on the Michigan LawHelp website (www.MI.LawHelp.org) or look in the yellow pages under "attorneys" or call the toll-free lawyer referral number, (800) 968-0738.