(1) This rule governs the treatment of income for purposes of the TANF program.

(2) All available income of any member of the filing unit is counted in determining eligibility and benefit amount for TANF cash assistance, unless a specific provision elsewhere in this chapter provides that the income will be excluded, disregarded, or otherwise not counted. Income is considered available both when actually available and when the applicant or participant has a legal interest in it and the legal ability to make the income available for support and maintenance.

(3) Eligibility and grant amount for TANF cash assistance is determined for each benefit month. The assistance unit's future eligibility with regard to income and grant amount is determined by prospectively evaluating the income expected to be received by members of the filing unit in the month of application and future months. The department estimates total income to be received by the filing unit in the future based on their current circumstances and available information about changes in their circumstances reasonably anticipated to occur in the future.

(4) Income averaging may be used to determine monthly income if:

(a) income is paid during one month but is intended to cover a period of time which is greater than one month. The monthly amount would be computed by dividing the payment amount by the number of months the payment is intended to cover. An example would be an employee who receives a paycheck during only nine months of the year but whose salary is considered to be for a 12 month period; or

(b) income fluctuates significantly from month to month. An example would be an employee paid an hourly wage rather than a set salary whose hours of work vary from month to month.

(5) In the case of earned income from self-employment, allowable business expenses are subtracted from gross receipts to arrive at gross income.

(a) Business expenses means costs directly related to the production of goods or the furnishing of services and without which the goods could not be produced or the services furnished. Allowable business expenses include the costs of materials, labor, tools, rental equipment, supplies, and utilities.

(b) Allowable business expenses do not include depreciation, entertainment expenses, personal work related expenses such as clothing or transportation to the site of employment, purchase of capital equipment, or payments on principal of loans for capital assets or durable goods.

(6) Income tax refunds are not treated as income but are considered a countable resource in the month received.

(7) If an individual would be required by ARM 37.78.208 to be included in the assistance unit except that the individual is not eligible because they are not a U.S. citizen or qualified alien, or they are a parole probation violator, fleeing felon, a person who has committed an intentional program violation, an individual who is sanctioned for noncompliance in allowable work activities as defined in ARM 37.78.103 and 37.78.807 or sanctioned for failure to accept and maintain employment without good cause, or an individual who has intentionally misrepresented their place of residence in order to obtain assistance simultaneously from two or more states, the income of that individual will be counted in determining the assistance unit's eligibility and grant amount even though the individual's needs are not included in the grant.

(8) All earned income of the adults included in the filing unit is counted in determining eligibility for TANF nonfinancial assistance.

(9) Eligibility for TANF nonfinancial assistance is determined by evaluating the earned income expected to be received by the adults included in the filing unit in the month of application. The department estimates the total income to be received by the filing unit based on their current circumstances.

(10) In the case of earned income from self-employment, allowable business expenses are subtracted from gross receipts to arrive at gross income.

(a) Business expenses means costs directly related to the production of goods or the furnishing of services and without which the goods could not be produced or the services furnished. Allowable business expenses include the costs of materials, labor, tools, rental equipment, supplies, and utilities.

(b) Allowable business expenses do not include depreciation, entertainment expenses, personal work related expenses such as clothing or transportation to the site of employment, purchase of capital equipment, or payments on principal of loans for capital equipment, or payments on principal of loans for capital assets or durable goods.