INTENT

To define employment and self-employment income, determine net income using allowable deductions, and apply appropriate AISH exemptions.

POLICY

AISH encourages applicants and clients to work to the extent they are able and recognizes the mutual obligation of cohabiting partners to support each other. The income of the applicant, client, and their cohabiting partner are considered in determining eligibility and level of benefits.

• Employment Income
• Self-Employment Income
• Calculating Net Employment Income
• Calculating Net Self-Employment Income
• Calculating Net Income Earned by Treaty Indians
• Income Exemptions
• Alberta Adult Health Benefit (AAHB)
• Rapid Reinstatement

Employment Income includes:

• Employment income;
• Awards or prizes for employment achievement;
• Deferred profit sharing;
• Long-term disability insurance where the employer pays the premiums;
• Northern living allowance;
• Retiring allowance;
• Severance pay;
• Sheltered workshop income;
• Treaty Indian employment income; and
• Training allowance.

Self-Employment Income includes:

• Business;
• Commission;
• Farming;
• Fishing;
• Land lease (for oil exploration);
• Professional; and
• Treaty Indian self-employment income.

Calculating Net Employment Income

To calculate net employment income, AISH uses most of the allowable Canada Revenue Agency (CRA) deductions which are:

• Income tax;
• Canada Pension Plan premiums;
• Employment insurance premiums;
• Union, professional, and like dues; and
• Other employment related expenses.

AISH also uses deductions that are a Condition of Employment (mandatory payroll deductions that an employee cannot opt out of) to calculate net employment income. Some examples may include:

• Employee health plan contributions
• Employee retirement pension contributions
• Employee insurance contributions (e.g. life insurance, long term disability insurance, etc.)
• Employee social fund contributions
• Employee uniform expenses

Calculating Net Self-Employment Income

The following CRA allowable deductions are used in calculating net self-employment income:

• Canada Pension Plan contributions;
• Union, professional, and like dues; and
• Allowable CRA business expenses

Calculating Net Income Earned by Treaty Indians

Allowable CRA deductions, except income tax, are applied to employment or self-employment income earned on-reserve by a Treaty Indian. Deductions that are a condition of employment may also be applied to employment income earned by a Treaty Indian.

Substantiation

The applicant, client, and their cohabiting partner are responsible for providing documentation to substantiate deductions. In situations where deductions appear to have been increased artificially beyond what is necessary, AISH may adjust the amount of income.

Income Exemptions

AISH applies the following exemptions to employment and self-employment income.

Single Exemption

The single exemption applies to a single person, or to each of two cohabiting partners if they are both AISH eligible and have no dependent children.

• The first $1,072 is fully exempt.
• Any amount above $1,072, and up to $2,009, is 50% exempt to a maximum exemption of $1,541.

Family Exemption

The family exemption applies to an applicant and client with a cohabiting partner, a single parent with dependent children, or an applicant and client with a cohabiting partner with dependent children.

• The first $2,612 of the applicant, client and their cohabiting partner’s combined net employment income is fully exempt.
• Any amount above $2,612, and up to $3,349, is 50% exempt to a maximum exemption of $2,981.

In a situation where both partners are AISH eligible and they have dependent children, one receives the family exemption and the other receives the single exemption.

Depending on how much the income changes, clients may report their income and their cohabiting partner’s income on a monthly, quarterly or annual basis according to Income Reporting Policy.

AISH Employment Income Exemption Calculation Examples

Alberta Adult Health Benefit (AAHB)

Clients who no longer qualify for AISH due to income from employment, self-employment, or a combination of these and other types of income will be enrolled in the AAHB for health benefits coverage.

The AAHB benefit period commences on July 1st and ends on June 30th of the following year.  AAHB clients must go through an annual renewal process. Clients who begin receiving the AAHB on or after May 1st will be provided with the benefits until June 30th of the next year, and then will be subject to the AAHB renewal process.

Rapid Reinstatement

AISH benefits can be rapidly reinstated within two years for former clients whose employment/self-employment earnings decrease to the point where they are eligible for AISH again.