Department of Human Services

Child Care Certificate Program Online Policy Manual

Income Eligibility Determination Policy




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In establishing eligibility for TCC, At-Risk, Low Income, TPACC, and Diversion Payment child care assistance, the following sources of gross family household income must be considered:


·        Gross Wages or Salary


Wages or salaries include the total before tax or other withholding earnings received from work performed as an employee: wages, salary, Armed Forces pay, military housing allowance, commissions, tips, piece rate payments and cash bonuses earned before deductions are made for taxes, bonds, pensions, union dues and similar purposes. 


Payments to VISTA Volunteers (including subsistence and re-enrollment allowances) are not considered as income.


·        Net Income from Non-Farm Self-Employment


Net income includes gross receipts minus business expenses from one’s own business, professional enterprise or partnership.  


Gross receipts include the value of all goods sold and services rendered.


Expenses include costs of goods purchased, rent, heat, light, power, depreciation charges, wages and salaries paid, business taxes (not personal income taxes) and similar costs.  


The value of salable merchandise consumed by the proprietors of retail stores is not included as a part of net income.  Certificate Programs will not pick which of the business expenses to count or not count.  Federal income tax forms, e.g., personal “1040” and business Form C are forms of documentation.


·        Net Income from Farm Self-Employment


Net income includes gross receipts minus operating expenses from the operation of a farm by a person on his own account as an owner, renter or sharecropper.  


Gross receipts include the value of all products sold, government crop loans, money received from the rental of farm equipment to others and incidental receipts from the sale of wood, sand, gravel and similar items.


Operating expenses include the cost of feed, fertilizer, seed and other farming supplies, cash wages paid to farmhands, depreciation charges, cash rent, interest on farm mortgages, farm building repairs, farm taxes (not State and Federal income taxes) and similar expenses.


The value of fuel, food or other farm products used for family living is not included as a part of the net income.  Certificate Programs cannot pick which expenses to count or not count.  Federal income tax forms, e.g., personal 1040, and business Form C, are forms of documentation.


·        Social Security


Social Security income for any household members, including Social Security pensions, survivor’s benefits, and permanent disability insurance payments made by the Social Security Administration (prior to deductions for medical insurance and overpayments) as well as railroad retirement insurance checks from the United States Government.


·        Dividends, Interest, Income from Estates or Trusts, from Net Rental Income or Royalties


Dividends, including dividends from stockholdings or membership in associations; interest on savings or bonds, periodic receipts from estates or trust funds; net income from the rental of a house, store, or property; income from the real property of other people; income from boarders or lodgers; or, the net income from any royalties.


·        Public Assistance or Welfare Payments


Includes family cash assistance payments such as Families First (FF), and   Supplemental Security Income (SSI).


·        Pensions and Annuities


Includes pensions or retirement benefits paid to a retired mandatory member of the household or his or her survivors by a former employer or by a union, either directly or through an insurance company; periodic receipts for annuities, or insurance.


·        Unemployment Compensation


Compensation received from government unemployment insurance agencies or private companies during periods of unemployment and strike benefits received from union funds.


·        Worker’s Compensation


Compensation received periodically from private or public insurance companies for injuries incurred at work.  The cost of this insurance must have been paid by the employer and not by the person.  The exception is the first $20 of each monthly payment of Black Lung Benefits.


·        Alimony


Any allowance paid to an individual for support by his or her spouse at the time of legal separation or following a divorce.


·        Child Support


Regular payments or contributions received to defray living expenses made by one or both parents for the child’s support.  Child support may be court ordered or voluntary.


·        Veterans Pension


Money paid by the Veterans Administration to disabled former members of the Armed Forces or to survivors of deceased veterans, subsistence allowances paid to veterans for education and on-the-job training as well as so-called “refunds” paid to ex-servicemen as GI insurance premiums.


·        Education and Training Stipends


Most student assistance programs are not countable, but funds and stipends received directly by the student or to cover living expenses while an individual is in school or training program are considered income.  


The following federal and state student assistance programs are not considered income:


·        Pell Grants (Pell Grant or BEOG);

·        Federal Family Educational Loan Program (Guaranteed, Stafford, Perkins);

·        Federal Work-Study Program and Federal Supplemental Educational Opportunity Grants (SEOG);

·        Tennessee Student Assistance Award (TSAA);

·        Student education loans;

·        Revised Section 479B of Title IV of the Higher Education Act (HEA); and

·        Bureau of Indian Affairs (BIA) Student Assistance Programs.


Income of Sponsored Aliens


When determining the income eligibility of sponsored aliens for child care purposes, the sponsor’s household income shall only be counted if the applicant is residing in that sponsor’s household.



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