The net income test is used to determine income eligibility under AHCCCS Freedom to Work (FTW). Only the customer’s earned income is used. Unearned income is not counted in the FTW calculation. Income is counted in the month it is received, even if earned in the previous month.
The customer’s counted earned income minus allowable deductions cannot be more than the income standard.
NOTE Only the customer’s income is counted. The income of a spouse or other family members is not counted for income eligibility.
The income standard for AHCCCS FTW is 250% of the Federal Poverty Level (FPL).
The table below shows the allowable income deductions used in net income budgeting for AHCCCS FTW:
Allowable Deduction |
Amount |
General Income Deduction |
$20.00 |
Student Earned Income Exclusion |
Varies |
Standard Work Expense Deduction |
$65.00 |
Impairment Related Work Expense Deduction (IRWE) |
Varies |
One half of the Remainder of Earned Income |
Varies |
Blind Work Expenses |
Varies |
The following steps are used to determine income eligibility for Freedom to Work:
Step |
Action |
1 |
For the income eligibility determination, disregard all unearned income received by the customer. |
2 |
To calculate the net earned income: · The counted earned income of the customer is totaled; and · The following are subtracted in this order: o Student Earned Income Exclusion (only if under age 22); o The $20.00 general income deduction; o The $65.00 work expense deduction; o Impairment Related Work Expenses; o ½ of subtotal of earned income; and o Blind Work Expenses. |
3 |
The result in Step 2 is compared to 250% of the FPL: The customer passes the income test if the net income is less than or equal to the income limit. |
See Example: How to calculate FTW income Eligibility
Term |
Definition |
Unearned income |
Any income that is not received as the result of a job or self-employment. |
This requirement applies to the following programs:
Program |
Legal Authorities |
Freedom to Work (FTW) |
AAC R9-22-1909 |