To qualify for FIP assistance, the familyís countable income must meet both the gross and net FIP income limits. See the topic, FIP Gross Income Limits, for information about Test 1, the 185% Standard of Need Test, which lists the gross income limits.
In determining FIP Net Income eligibility and payment rates, there are two tests: Test 2, the Standard of Need Test; and Test 3, the Payment Standard Test.
In both Test 2 and Test 3, start with the familyís gross non-exempt income. (See FIP Income Exclusions for a list of the types of income that are exempt from being counted.) Then apply the deductions, disregards or diversions that are allowable under the particular test.
∑ Test 2: Standard of Need Test (using the Schedule of Living Costs)
This test determines eligibility for the 50% Work Incentive Deduction. The test is applied only to families who are applying or reapplying for FIP. On reapplications, Test 2 is applied regardless of how much time has passed since the previous period of FIP eligibility. But Test 2 is not applied when a new person is added to an existing FIP recipient case eligible group.
To apply Test 2, calculate the eligible groupís gross nonexempt income minus a 20% earned income deduction and minus diversions for certain individuals not in the home or in the home but excluded or ineligible. For more information on deductions, see: FIP Income Deductions.
Click on Desk Aid and see FIP Test 2 for the Standard of Need Test amounts (Schedule of Living Costs).
When the countable income of the eligible group is equal to or more than the Standard of Need (plus special needs, if applicable), the application is denied.
When the countable income of the eligible group is less than the Standard of Need, then the group is eligible for the 50% work incentive deduction.
∑ Test 3: Payment Standard Test (using the Schedule of Basic Needs)
If Test 1 (and Test 2, if an applicant family) are met, then the Payment Standard Test is applied.
To apply Test 3, calculate the eligible groupís gross nonexempt income minus the deductions listed for Test 2, including the 50% work incentive deduction. For more information on deductions, see: FIP Income Deductions.
Click on Desk Aid and see FIP Test 3 for the Payment Standard Test amounts.
If the family's countable income is equal to or more than the Payment Standard (plus special needs, if applicable), there is no FIP eligibility.
If the familyís countable income is less than the Payment Standard, the FIP grant is determined by deducting the familyís countable net income from the Payment Standard for the size eligible group.
For details on the income tests, see Iowa Dept of Human Services Employees' Manual Title 4 Family Investment Program, Chapter F, Budgeting for Initial Eligibility, Applying Income Tests.
FIP recipients must report changes, such as beginning, increased or decreased income, within 10 days. The ten days is counted from the date the first payment or the payment that reflects the change is received. When the new or increased income does not meet the FIP gross or net income limit, FIP eligibility stops the first day of the next calendar month. When the beginning or increased income is within the gross and the net income limits but affects the amount of the FIP grant, the FIP grant is changed starting with the first day of the second calendar month. For more information see the examples below. When, due to untimely reporting or due to administrative limitations, FIP eligibility or the amount of the grant cannot be adjusted within the required time frames, the family must repay any FIP benefits received to which the family was not entitled.
Example 1 - Mrs. B and her two children receive FIP. Mrs. B starts a new job in October and gets her first paycheck November 6. She reports her new earnings within 10 days. Her gross earnings are $800 per month. She has $175 per month child care costs. Mrs. Bís gross earnings pass the gross income test ($1,570.65 for 3 people). Mrs. B will get a lower FIP grant starting in January based on her November earnings, as follows:
$ 800.00 Countable gross earnings
- 160.00 20% earned income deduction
- 320.00 50% work incentive deduction
$ 320.00 Countable net earnings
$ 426.00 FIP Payment Standard for 3 people
- 320.00 Countable net earnings
$ 106.00 Mrs. Bís January FIP grant
Mrs. B may get help with her child care costs from the state Child Care Assistance program.
Example 2 Same as Example 1 except Mrs. Bís new monthly gross earnings are $1,600 starting November. Because her monthly gross earnings exceed the $1,570.65 gross income limit, Mrs. B is ineligible for FIP starting December.
Example 3 In this example, Mrs. Bís gross monthly earnings are $1,200 and she has $200 per month child care costs. Even though Mrs. Bís countable gross earnings are within the $1,570.65 gross income limit for 3 people, her countable net earnings starting November exceed the Payment Standard as follows:
$ 1,200.00 Countable gross earnings
- 240.00 20% earned income deduction
- 480.00 50% earned income deduction
$ 480.00 Countable net earnings
$ 426.00 FIP Payment Standard for 3 people
- 480.00 Countable net earnings
$ 0 FIP grant
Mrs. B is ineligible for FIP starting December because her countable net earnings exceed the Payment Standard.
In Examples 2 and 3, Mrs. B may still get help with child care costs through the Child Care Assistance program.
Example 1 Mrs. K and her three children receive FIP. Mrs. K is laid off from her job and she starts to receive $450 per month unemployment insurance benefits (UIB) in November. Her $450 monthly UIB income is within the gross income limit ($1,824.10 for 4 people). Mrs. Kís FIP grant will be reduced starting January based on the UIB received in November as follows:
$ 495.00 Payment Standard for 4 people Payment
- 450.00 UIB income
$ 45.00 January FIP grant
Example 2 The same as Example 1 except Mrs. K starts to receive $500 UIB per month in November. Although the $500 UIB income is within the $1,824.10 gross income limit for 4 people, it exceeds the Payment Standard (net income limit) as follows:
$ 495.00 Payment Standard for 4 people
- 500.00 UIB income .
$ 0 December FIP grant
Mrs. K is ineligible for FIP starting December.
∑ FIP Resource Limits
∑ Non-Financial FIP Eligibility Criteria
∑ Financial FIP Eligibility Criteria
∑ FIP Overview
∑ Welcome and Introduction to Benefits in Iowa
Title 4, Family Investment Program (FIP)
∑ Chapter E, Income
∑ Chapter F, Budgeting for Initial Eligibility, Applying Income Tests
∑ Chapter G, Case Maintenance, Determining Eligibility Prospectively When a Change Occurs
∑ Chapter G, Case Maintenance, Effective Date of Adjustment
Legal Reference: 441 Iowa Administrative Code 41.27(239B)
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