Annual Computation Method

For this method, the individual must have been self-employed for at least the past full year.

The self-employment income projection period, usually 12 months, is the period of time the household expects the income to support the family. A projection period should be established for households that receive self-employment income that is intended to support the household for:

the year, but is received less frequently than monthly, such as farm income that may only be received a few times per year when crops or livestock are sold; or

a specific period in time, but is received less frequently than monthly.

The projection period should be determined at application when the individual reports self-employment income received less often than monthly. Note: For Medicaid EDGs, if the individual is eligible for prior Medicaid, the prior months are not included in the 12-month projection period.

The following steps are used to determine the projection period for self-employment income:

Determine whether the self-employment is annual or seasonal, since that will determine the length of the projection period. Annual – intended to support the household for at least the next full 12 months. The projection period is 12 months whether the income is received yearly or less often than monthly. Seasonal – intended to support the household for less than 12 months since it is available only during certain months of the year. The projection period is the number of months the self-employment is intended to provide support.

Determine the first month of the projection period. It is always the first month the household receives benefits, unless the individual will begin working in a future month. In this situation, use the month the self-employment begins as the first month of the projection period.

Once the projection period is established, it must not be changed. The projection period remains the same until the:

individual no longer supports the household through self-employment;

12-month or seasonal period ends; or

EDG is denied, and the individual misses one full month's benefits before reapplying.

Exception: When there is a new source of self-employment income received less often than monthly, and the individual expects the income to support the household for the year or a specific period of time, establish a projection period for the months that the individual states the income is intended to cover. Since this projection period covers income from a new source, at redetermination, ensure that the income and circumstances still fit with the annual computation method criteria. Until the household has 12 months of income history, the projection period is conditional and may be changed as may the type of computation method used to calculate self-employment income.

In determining the monthly figure to use for new self-employment income when calculating a budget amount:

the monthly computation method is used if there are two full representative months of self- employment income received less often than monthly; and

the daily computation method is used if there are less than two full representative calendar months of self-employment income received less often than monthly.

On an active EDG, when an individual reports a new source of self-employment, the first month of the projection period is the change effective month.