Section 16 - Earned Income
16.1.1 Earned Income
Policies
Earned Income - Procedures for Treatment (PDF 142 KB)
New SAMIN Transaction - Request form (REFO) (PDF 64 KB)
"Earned income" is defined as the return on work done or services rendered deriving from labour as opposed to capital or entitlement.
16.1.2 Employment Earnings
"Employment earnings" are defined as earned income derived from salaried employment or wages rather than from self-employment.
16.1.3 Self-Employment Earnings
For the purposes of the Act and Regulation, self-employed persons are:
- Persons of independent livelihood, such as farmers, fishers, trappers and small business operators.
- Independent contractors whom The Employment Standards Act of Manitoba defines as persons who undertake to do certain work but who are not employees of another person or agency. Such persons are not entitled to the minimum wage or other general provisions of the labour laws. Their work situation is characterized by its independent nature whereby the person has undertaken to produce a given result without the direction or control of an employer. Babysitters, Avon distributors, real estate agents, and commissioned sales people are examples of independent contractors. For EIA purposes, such earners are to be considered self-employed.
Deductions at source of pay are not factors to be considered in determining whether a work situation falls within the self-employment category.
16.1.4 Earning Exemptions as a Work Incentive - Legislation
Sections 8(4) to (10) of the Regulation provide for certain exemptions of earned income from calculations of financial resources available to the applicant or participant for all categories of eligibility. Such exemptions are granted as an incentive to work.
Subject to the conditions cited in the Regulation, each earning participant in an income assistance household is entitled to the exemption on earnings.
See subsection 8(1)(b)(x) of the Regulation for the exemption of all employment and self-employment earnings of children receiving, or applying for, EIA who attend school full-time.
16.1.5 Declaration of Employment Income
Policy
Direct Deposit - Daily (PDF 155 KB)
Form
Income Declaration Statement (PDF 83 KB)
Participants with earnings are responsible for making a full declaration of employment income and expenses at each month end, prior to any calculations of EIA eligibility for the upcoming month, or payment of any assistance. The Income Declaration Statement is to be used for this purpose.
16.1.6 Employment Situations Under the Auspices of the Employability Assistance for People with Disabilities Program and Community Living disABILITY Services
Earnings exemptions and allowable employment expenses should be applied to income received from employment in one of the following situations operated under the auspices of the Employability Assistance for People with Disabilities Program (formerly marketAbilities) or Community Living disABILITY Services (formerly (SLP):
- sheltered workshop
- sheltered employment in industry
- training on the job
- occupational activity centre
The Community Living disABILITY Services or the Employability Assistance for People with Disabilities Program may provide transportation costs. To avoid duplication, it is important to verify with the programs if the participant is in receipt of any of these funds prior to including the transportation as an employment expense on the income assistance budget.
16.1.7 Income from Other Sources (E.G., Membership on a Board or Committee)
Remuneration from other sources to an EIA participant such as an honorarium or stipend received from membership on a board or committee is considered as earned income and must have the appropriate work incentive benefits applied (please refer to Section 16.2 and Section 16.3 for further information on the calculation of work incentive benefits).
16.1.8 Earnings Exemption For Dependent Children Attending School Full-Time
Section 8(1)(b)(x) of the Regulation provides for the exemption of all employment and self-employment earnings of children receiving, or applying for, EIA who attend school full-time.
All children under 18 are potentially eligible for the earnings exemption regardless of the basis of their eligibility for EIA. Children enrolled in their own right under clause 5(1)(f) of the Act are eligible, as are children of all other EIA participants.
The following considerations apply:
1. School Attendance
Only children who attend school full-time are entitled to have all their earnings exempted. Full-time attendance is defined by the local school division. Where a child's attendance does not seem consistent with the full-time requirement, confirmation from the local school division should be obtained.
Children in grade 12 who are taking less than a full course load, but who are taking all of the courses necessary to complete their grade 12 and who wish to claim the earnings exemption, should be referred to a Program Specialist for consideration.
Those who are not attending school full-time and who work may receive the work incentive appropriate for their household.
2. Summer Earnings
To qualify for a full exemption of earnings during the summer months, children must have attended school full-time during the preceding academic year and must intend to return to school full-time in the fall. (A verbal statement of this intention is sufficient).
If children, whose summer earnings have been exempted, do not return to school, they will cease to qualify for the complete exemption once the school year has begun. However, the exemption of their summer earnings will not be reduced retroactively.
3. Employment vs. Self-Employment
All children's earnings qualify for exemption regardless of source (i.e., employment or self-employment)
4. Liquid Asset Limit
A family with children whose earnings have been exempted will still be required to comply with the liquid asset limits of the program by the date of their annual review.
Determining Eligibility
The requirement for the exemption is full-time school attendance. Counsellors must determine whether a child attends school full-time before granting the exemption. Normally, a verbal declaration by the participant will be sufficient proof. However, where circumstances warrant, written confirmation of attendance by the school may be required. This should be requested from the school by the child or the participant and consist of a statement on school letterhead that the child is enrolled in a full-time course of study and attends school regularly. To preserve participant confidentiality, the counsellor should not contact the school unless the participant requests it.
In addition to the above confirmation of full-time attendance, counsellors are required to obtain written confirmation from the school of registration for a full course load at the beginning of the school year OR at the beginning of each term if registration occurs then. This confirmation should be provided by the child or the participant and include a list of the courses for which the child is registered. If the school does not provide its students with this information, the child should request written confirmation of registration in a full-time course of study from the school. To preserve participant confidentiality, the counsellor should not contact the school unless the participant requests it.
NOTE The progress of the child in his or her course of study is irrelevant for the purposes of this exemption. It is only necessary that the child be registered for a full course load and attends regularly.
Record-Keeping
Once it has been determined that a child qualifies for the earnings exemption, there is no requirement to keep track of his or her earnings. Counsellors should emphasize to participants that they are required to report all changes in circumstances (e.g., the child ceasing to attend school full-time). If the change renders the child ineligible for the exemption, all income must then be reported and it will be treated in accordance with the exemption provisions set out in section 8(1)(b)(ix) of the Regulation.
16.1.9 Earnings Exemption for Children Not Attending School Full-Time
The employment income of a dependent child who does not attend school full-time must be declared. This income is subject to exemption under the Work Incentive if the parent's eligibility conforms to the 30 day minimum enrolment section, and is within the categories named in section 8(1)(iv)(A) of the Regulation.
Where a child's earnings, after exemption, exceed his or her own basic living allowance, he or she should be given the option of being deleted from the family's budget since it is not intended that children should support income assistance households.
16.1.10 Transition to Employment - Extended Health Services
Participants who have found employment may be eligible for up to twenty-four months of extended health services to ease the transition to employment.
16.2.1 (deleted) - see Section 16.1.4
16.2.2 Earning Exemptions as Work Incentive for All EIA Participants
The following exemptions as a work incentive are allowed on earned income for applicants and participants:
For participants enrolled longer than one month
- Up to $200 of net monthly earnings plus 30% of net monthly earnings in excess of $200
- Enhanced self-employment programs may be subject to exceptional exemptions (see Section 17.1.5)
- 100% earning exemptions for dependent children attending school full time (see Section 16.1.8)
For applicants and participants who have been enrolled less than one month
- Up to $200 of net monthly earnings
Actual earnings received during enrolment, are to be fully considered less the allowable exemption of $200.00, and are not to be prorated. This applies for all earnings received during enrolment, even when some of the hours for which the person is being paid were worked before the person was enrolled on EIA.
16.2.3 (deleted)
16.2.4 (deleted)
16.2.5 Babysitting
Income derived from babysitting shall be considered self-employment and is eligible for an earning exemption in accordance with section 8(4) of the Regulation. Children who are in school full-time and earn income from babysitting shall have their earned income totally exempted as per subsection 8(1)(b)(x) of the Regulation.
16.2.6 Allowable Deductions
Policy
Verification of Payroll Deductions (PDF 161 KB)
Only compulsory payroll deductions are to be allowed in the calculation of net employment income.
Payroll deductions for meals or other basic maintenance supplied by the employer may be considered only if the arrangement is compulsory, and if the basic assistance is reduced accordingly for these items.
16.2.7 Allowable Expenses
Participants enrolled in persons with disabilities or aged categories are eligible for exemptions on the following work expenses:
Work clothing sections 18.4.3 and 21.2.1
Work transportation - section 21.2.1
Child care - section 21.2.1
Telephone costs - section 21.2.1
16.3.1 Legislative Authority
Earned income exemptions for applicants and participants under a provision of the Act are outlined in clause 8(4) of the Regulations. These exemptions were effective January 1, 2008.
These exemptions do not apply to children who attend school full-time.
16.3.2 (deleted) - see Section 16.2.2
16.3.3 Net Monthly Earnings
- monthly employment earnings less compulsory payroll deductions.
Compulsory payroll deductions include those for Canada Pension Plan, Employment Insurance, income tax, union dues, private pension plan, group insurance, and other deductions over which the participant has no control. - monthly self-employment earnings, less allowable self-employment expenses approved by the District Director.
16.3.4 Allowable Expenses
Policy
Employment Special Needs: Child Care (PDF 117 KB)
The exemptions allowed under the work incentive provisions for participants not enrolled under the persons with disabilities or aged categories are intended to cover employment expenses, such as work clothing and transportation.
See also sections 18.4.3 and 21.2.1 about work clothing, and section 21.2.1 concerning transportation.
Single parents and general assistance families, in which both parents are working, are allowed an exemption for child care expenses for employment reasons. Exemptions are allowed on child care expenses in excess of $1.00 per day per child for both subsidized and private child care.
16.3.5 Participants with More than One Source of Earnings
The earnings exemption as a work incentive for participants with employment, self-employment earnings and/or employment program earnings will be based on the combined net earnings from all sources and a "double exclusion" will not apply.
16.3.6 Employment Programs
Section 1(1) of the Regulation defines an employment program as:
"A wage-based program approved by the Minister or any person authorized by the Minister as an employability enhancement measure."
Employment programs, such as the Community Home Services Program or Building Independence for Northern Communities Employment Initiative, are wage-based programs which are intended as an employment enhancement measure to assist EIA participants in gaining competitive employment.
Earnings from employment programs are subject to the standard work incentive - see section 16.2.2.
16.3.7 Exit Point
Policy
Transition of EIA Participants/Applicants from Employment and Income Assistance to non-EIA Rent Assist (PDF 198 KB)
Exit Point
In accordance with section 8(6) of the Regulation, an Exit Point will be reached and cash assistance shall be reduced to $0 when a household's total income from gross earnings and unexempted unearned income represents 135% or more of the household's monthly budget, including allowable child care expenses.
When The Exit Point is Reached
Income which exceeds the household's monthly budget shall be considered an overage. If the overage is greater than the exit point, the file should be closed immediately, as the household will be ineligible for cash assistance in the second month. If the overage is greater than the household's budget but less than the exit point, the overage should be carried over to the following month's calculation of eligibility. Ineligibility for cash payment in two consecutive months shall be cause for immediate closure.
Fluctuations in Income
Where a participant's income and hours of work are known to fluctuate widely from month to month, and the exit point policy would result in frequent closings and re-openings, the file may be kept open for three months and the overage from the second month carried to the calculation of eligibility for the third month. In these situations, ineligibility for cash in three consecutive months shall be cause for immediate closure.