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FIP Eligibility - Self Employment - Iowa

When a person is self-employed, the net profit is considered as countable gross income and must be within the gross income limit for the size of the eligible group. "Net profit" means gross self-employment earnings minus allowable business expenses.

Allowable business expenses include the cost of inventories and supplies, wages for employees of the self-employed person, rental cost for machinery and equipment, and other direct costs related to producing the self-employment income.

Applicable earned income deductions, such as the 20% earned income deduction and the 50% work incentive deduction, are deducted from net profit. The balance is considered countable net income and must meet the Payment Standard for the size eligible group.

Example Mr. G and his three children receive FIP. Mr. G’s gross earnings from self-employment are $2,500 per month. His allowable business expenses are $1,500 per month.

$ 2,500.00 Gross monthly earnings

- 1,500.00 Allowable business expenses

$ 1,000.00 Net profit (countable gross earnings)

$ 1,000.00 Net profit (is less than the $1,824.10 gross income limit for 4 people)

- 200.00 20% earned income deduction

$ 800.00

- 400.00 50% work incentive deduction

$ 400.00 Countable net earnings

$ 495.00 Payment Standard for 4 people

- 400.00 Countable net earnings

$ 95.00 FIP grant

See Also:

·      Income Exclusions for meeting Gross Income Limits and Net Income Standards

·      Gross Income Limits for FIP Eligibility

·      Net Income Standards for FIP Eligibility and FIP Payment Rates

·      FIP Resource Limits

·      Non-Financial FIP Eligibility Criteria

·      Financial FIP Eligibility Criteria

·      FIP Overview

·      Welcome and Introduction to Benefits in Iowa

Source: Iowa DHS Employees’ Policy Manual

Title 4, Family Investment Program (FIP)

·     Chapter E, Income, Self Employment

Legal reference: 441 IAC 41.27(2); 441 IAC 41.27(9)

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