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Defining Income

There is no federal definition of income; as a result, tribes may develop their own definitions of income, as well as develop their own timeframes for counting income. In defining and counting income, tribes generally take into account these four factors:

  • Countable (base) income, including but not limited to, wages, salaries and tips; or means-tested benefits such as SSI, Social Security and veteran's benefits
  • Non-countable or excluded income, including but not limited to, the value of SNAP benefits or benefits from certain other federal programs, or cash income over which the household has no control.
  • Income deductions (what will be subtracted from income), such as medical expenses
  • Time period to be used for counting income

Section D of the Tribal Manual goes into great detail regarding these four factors, including examples of what tribes generally count as income and what are used as deductions.

Regarding counting of gross income versus net income, the following guidance comes from the Division of Energy Assistance FAQs on its website:

"Generally, income means gross income, but a number of states have deductions for medical expenses over a certain level, or for some limited expenses associated with employment such as child care. If a state is going to exempt taxes or go beyond the medical and employment expense, we should look at it with the grantee before it acts.

...Using gross income is a generally accepted (though not required) practice in many programs, including the LIHEAP program. Total gross income provides a 'base' from which to evaluate a potentially eligible household in the fairest way possible, relative to other potentially eligible households. In addition, many LIHEAP grantees count the receipt of child support payments as income, and that amount is included in the income total when determining a household's income eligibility for LIHEAP benefits."

Section D of the Tribal Manual also looks at the time period used for measuring income. It says the time period most often used for calculating income is yearly, but most tribes do not actually verify income for the full year preceding an application. Instead, they verify income for a shorter period and convert the result to an annual figure. The object is to use a time period for measuring income that best reflects the household's ability to pay for fuel during the heating season.