Expected to Work/Barriers to Full Employment Policy & Procedures

Published Date: April 01, 2006
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11 Income

Loan Payments

Loan payments made on a recipient’s behalf are not income.

Example 1
A friend makes loan payments on a recipient’s car directly to the lender. The money is not income. The worker must tell the client that if the loan payments significantly reduce the client’s debt, the client must report an increase in vehicle equity (asset). The increase equals the amount by which the loan payment reduced the principal owing on the vehicle.

Example 2
A separated or divorced spouse continues to make mortgage payments on the matrimonial home where the recipient lives. The money is not income. The recipient is not required to report increase in assets because exemption of the home depends on value, not equity.