Appendix D - 7 CFR 273.11(b)

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§ 273.11

7 CFR Ch. II (1–1–19 Edition)

State agency if it is approved to receive PA and/or SSI benefits or benefits from a State or local GA program.
In cases where the State agency has
elected to use a notice of denial when a
delay was caused by the household’s
failure to take action to complete the
application process, as provided in
§ 273.2(h)(2), the notice of denial shall
also explain: The action that the
household must take to reactivate the
application; that the case will be reopened without a new application if action is taken within 30 days of the date
the notice of denial was mailed; and
that the household must submit a new
application if, at the end of the 30-day
period, the household has not taken
the needed action and wishes to participate in the program. If the State
agency chooses the option specified in
§ 273.2(h)(2) of reopening the application
in cases where verification is lacking
only if household provides verification
within 30 days of the date of the initial
request for verification, the State
agency shall include on the notice of
denial the date by which the household
must provide the missing verification.
(iii) Notice of pending status. If the application is to be held pending because
some action by the State is necessary
to complete the application process, as
specified in § 273.2(h)(2), or the State
agency has elected to pend all cases regardless of the reason for delay, the
State agency shall provide the household with a written notice which informs the household that its application has not been completed and is
being processed. If some action by the
household is also needed to complete
the application process, the notice
shall also explain what action the
household must take and that its application will be denied if the household
fails to take the required action within
60 days of the date the application was
filed. If the State agency chooses the
option specified in § 273.2(h) (2) and (3)
of holding the application pending in
cases where verification is lacking only
until 30 days following the date
verification was initially requested,
the State agency shall include on the
notice of pending status the date by
which the household must provide the
missing verification.

(2) Applications for recertification. The
State agency shall provide households
that have filed an application by the
15th of the last month of their certification period with either a notice of
eligibility or a notice of denial by the
end of the current certification period
if the household has complied with all
recertification
requirements.
The
State agency shall provide households
that have received a notice of expiration at the time of certification, and
have timely reapplied, with either a
notice of eligibility or a notice of denial not later than 30 days after the
date of the household’s initial opportunity to obtain its last allotment.
[Amdt. 132, 43 FR 47889, Oct. 17, 1978]
EDITORIAL NOTE: For FEDERAL REGISTER citations affecting § 273.10, see the List of CFR
Sections Affected, which appears in the
Finding Aids section of the printed volume
and at www.govinfo.gov.

§ 273.11 Action on households with
special circumstances.
(a) Self-employment income. The State
agency must calculate a household’s
self-employment income as follows:
(1) Averaging self-employment income.
(i) Self-employment income must be
averaged over the period the income is
intended to cover, even if the household receives income from other
sources. If the averaged amount does
not accurately reflect the household’s
actual circumstances because the
household has experienced a substantial increase or decrease in business,
the State agency must calculate the
self-employment income on the basis of
anticipated, not prior, earnings.
(ii) If a household’s self-employment
enterprise has been in existence for less
than a year, the income from that selfemployment enterprise must be averaged over the period of time the business has been in operation and the
monthly amount projected for the coming year.
(iii) Notwithstanding the provisions
of paragraphs (a)(1)(i) and (a)(1)(ii) of
this section, households subject to
monthly reporting and retrospective
budgeting who derive their self-employment income from a farming operation and who incur irregular expenses
to produce such income have the option to annualize the allowable costs of

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Food and Nutrition Service, USDA

§ 273.11

producing
self-employment
income
from farming when the self-employment farm income is annualized.
(2) Determining monthly income from
self-employment. (i) For the period of
time over which self-employment income is determined, the State agency
must add all gross self-employment income (either actual or anticipated, as
provided in paragraph (a)(1)(i) of this
section) and capital gains (according to
paragraph (a)(3) of this section), exclude the costs of producing the selfemployment income (as determined in
paragraph (a)(4) of this section), and divide the remaining amount of self-employment income by the number of
months over which the income will be
averaged. This amount is the monthly
net self-employment income. The
monthly net self-employment income
must be added to any other earned income received by the household to determine total monthly earned income.
(ii) If the cost of producing self-employment income exceeds the income
derived from self-employment as a
farmer (defined for the purposes of this
paragraph (a)(2)(ii) as a self-employed
farmer who receives or anticipates receiving annual gross proceeds of $1,000
or more from the farming enterprise),
such losses must be prorated in accordance with paragraph (a)(1) of this section, and then offset against countable
income to the household as follows:
(A) Offset farm self-employment
losses first against other self-employment income.
(B) Offset any remaining farm selfemployment losses against the total
amount of earned and unearned income
after the earned income deduction has
been applied.
(iii) If a State agency determines
that a household is eligible based on its
monthly net income, the State may
elect to offer the household an option
to determine the benefit level by using
either the same net income which was
used to determine eligibility, or by unevenly prorating the household’s total
net income over the period for which
the household’s self-employment income was averaged to more closely approximate the time when the income is
actually received. If income is prorated, the net income assigned in any
month cannot exceed the maximum

monthly income eligibility standards
for the household’s size.
(3) Capital gains. The proceeds from
the sale of capital goods or equipment
must be calculated in the same manner
as a capital gain for Federal income
tax purposes. Even if only 50 percent of
the proceeds from the sale of capital
goods or equipment is taxed for Federal
income tax purposes, the State agency
must count the full amount of the capital gain as income for SNAP purposes.
For households whose self-employment
income is calculated on an anticipated
(rather than averaged) basis in accordance with paragraph (a)(1) of this section, the State agency must count the
amount of capital gains the household
anticipates
receiving
during
the
months over which the income is being
averaged.
(b) Allowable costs of producing self-employment income. (1) Allowable costs of
producing self-employment income include, but are not limited to, the identifiable costs of labor; stock; raw material; seed and fertilizer; payments on
the principal of the purchase price of
income-producing real estate and capital assets, equipment, machinery, and
other durable goods; interest paid to
purchase income-producing property;
insurance premiums; and taxes paid on
income-producing property.
(2) In determining net self-employment income, the following items are
not allowable costs of doing business:
(i) Net losses from previous periods;
(ii) Federal, State, and local income
taxes, money set aside for retirement
purposes, and other work-related personal expenses (such as transportation
to and from work), as these expenses
are accounted for by the 20 percent
earned income deduction specified in
§ 273.9(d)(2);
(iii) Depreciation; and
(iv) Any amount that exceeds the
payment a household receives from a
boarder for lodging and meals.
(3) When calculating the costs of producing self-employment income, State
agencies may elect to use actual costs
for allowable expenses in accordance
with paragraphs (b)(1) and (b)(2) of this
section or determine self-employment
expenses as follows:
(i) For income from day care, use the
current reimbursement amounts used

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§ 273.11

7 CFR Ch. II (1–1–19 Edition)

in the Child and Adult Care Food Program or a standard amount based on
estimated per-meal costs.
(ii) For income from boarders, other
than those in commercial boarding
houses or from foster care boarders,
use:
(A) The maximum SNAP allotment
for a household size that is equal to the
number of boarders; or
(B) A flat amount or fixed percentage
of the gross income, provided that the
method used to determine the flat
amount or fixed percentage is objective
and justifiable and is stated in the
State’s SNAP manual.
(iii) For income from foster care
boarders, refer to § 273.1(c)(6).
(iv) Use the standard amount the
State uses for its TANF program.
(v) Use an amount approved by FNS.
State agencies may submit a proposal
to FNS for approval to use a simplified
self-employment expense calculation
method that does not result in increased Program costs. Different methods may be proposed for different types
of self-employment. The proposal must
include a description of the proposed
method, the number and type of households and percent of the caseload affected, and documentation indicating
that the proposed procedure will not
increase Program costs.
(c) Treatment of income and resources
of certain nonhousehold members. During
the period of time that a household
member cannot participate for the reasons addressed in this section, the eligibility and benefit level of any remaining household members shall be
determined in accordance with the procedures outlined in this section.
(1) Intentional Program violation, felony drug conviction, or fleeing felon disqualifications, and workfare or work requirement sanctions. The eligibility and
benefit level of any remaining household members of a household containing individuals determined ineligible because of a disqualification for
an intentional Program violation, a
felony drug conviction, their fleeing
felon status, noncompliance with a
work requirement of § 273.7, or imposition of a sanction while they were participating in a household disqualified
because of failure to comply with

workfare requirements shall be determined as follows:
(i) Income, resources, and deductible expenses. The income and resources of the
ineligible household member(s) shall
continue to count in their entirety,
and the entire household’s allowable
earned income, standard, medical, dependent care, child support, and excess
shelter deductions shall continue to
apply to the remaining household
members.
(ii) Eligibility and benefit level. The ineligible member shall not be included
when determining the household’s size
for the purposes of:
(A) Assigning a benefit level to the
household;
(B) Assigning a standard deduction to
the household;
(C)
Comparing
the
household’s
monthly income with the income eligibility standards; or
(D) Comparing the household’s resources with the resource eligibility
limits. The State agency shall ensure
that no household’s coupon allotment
is increased as a result of the exclusion
of one or more household members.
(2) SSN disqualifications, comparable
disqualifications, child support disqualifications, and ineligible ABAWDs. The
eligibility and benefit level of any remaining household members of a
household containing individuals determined to be ineligible for refusal to
obtain or provide an SSN, for meeting
the time limit for able-bodied adults
without dependents or for being disqualified under paragraphs (k), (o), (p),
or (q) of this section shall be determined as follows:
(i) Resources. The resources of such
ineligible members shall continue to
count in their entirety to the remaining household members.
(ii) Income. A pro rata share of the income of such ineligible members shall
be counted as income to the remaining
members. This pro rata share is calculated by first subtracting the allowable exclusions from the ineligible
member’s income and dividing the income evenly among the household
members, including the ineligible
members. All but the ineligible members’ share is counted as income for the
remaining household members.

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