Case study

Rabbi Yehuda Fried* is a rebbi with eight children and an annual salary of $50,000. Out of the $50k he earns, Rabbi Fried receives $10k in the form of parsonage. (Parsonage is a tax benefit given to clergy members. Money designated as parsonage may be used for housing expenses only ' rent, mortgage, remodeling, etc.) As an added benefit, his yeshiva also gives him a tuition credit of $7,000 to be used towards his children's tuition. Additionally, he receives approximately $10,000 a year from various friends and relatives to help him cover the expenses related to yomim tovim and family simchos.

Question: What portion of Rabbi Fried's income is counted as far as government program eligibility is concerned?

Answer: Rabbi Fried's base salary is obviously considered income. However, there are three areas of ambiguity that must be clarified when reviewing Rabbi Fried's case. Those are: the money he receives as parsonage, the $10k he receives from his relatives as charity, and the tuition benefit from his yeshiva.

When determining how much a person should receive in benefits, SNAP breaks down his/her income into two categories ' 'earned income' and 'unearned income.' Unearned income reduces a person's benefits more than earned income does. Examples of earned income are: salary, commission, profit from a business, etc. Examples of unearned income are: charity, disability payments, dividends from stocks, etc.

Parsonage:

Parsonage is not counted as income for NJ FamilyCare. However, it is counted as income for every other program, including Section 8 (aka HUD), HEAP, CHS, and SNAP. In fact, SNAP counts parsonage as 'unearned income,' resulting in a greater reduction in benefits than money earned as part of one's salary.

Charity:

NJ FamilyCare does not count charity as income, because charity is considered a gift and is generally not taxable. CHS also does not count charity as income. However, SNAP, and HEAP count charity received on a regular basis as income. For Section 8, if one does not fall under the student rule exemption (student over age 23 with dependent children enrolled in an institution of higher education), charity is always counted as income. Therefore, in Rabbi Fried's case, the charity he receives would be considered income.

Tuition benefits (QTR):

Tuition benefit (QTR) is a great perk available to teachers. There are various rules to ensure that this benefit is administered properly. These include (but are not limited to) ensuring that the benefit is not in lieu of salary, writing a contract that clearly states which part of the teacher's compensation is salary and which part is benefit, and offering the same benefit amount across the board to each member of a class of employees. If properly set up by the school, QTR is not counted as part of one's gross income and is not considered income by NJ FamilyCare, CHS or HEAP. SNAP also does not count tuition benefits as income. However, if you work in a school setting, the SNAP office will ask whether your employer pays your tuition. If your school does pay your tuition as part of your salary, your employer will need to write a letter stating the amount they pay and where they pay it to. If it is not part of your salary, the employer can write that the tuition payments are made directly to the school and are not part of your salary. Section 8 counts tuition benefits as income.

Top Tips from Mrs. Ginsberger - Front Desk Case Manager

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• In-depth knowledge of NJ FamilyCare, SNAP, CHIP, CHS, and utility programs
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