OBSOLETE POLICY CHIP MANUAL |
The interest portion of payments received from any sales contract is countable income to the extent that payments will continue to be received during the certification period. Interest on a sales contract may fluctuate each month. Request the amortization schedule to determine average monthly interest amounts.
EXAMPLE 1: Mr. Jones sold the home he was living in to buy a new home. From the sales contract on the first home, he will receive $580 a month. $500 of the monthly payment is principal and the remaining $80 is interest. The $80 monthly interest portion is countable income.
EXAMPLE 2: Mr. Jones applied for CHIP in July 1998. His sales contract is due to end in March, 1999. Determine the total interest to be received in the 12 month certification period. Average the total over the certification period. ($80 x 8 payments (Aug-Mar) divided by 12 = $53)
EXAMPLE 3: Mr. Smith sold his cabin and lot in the mountains. From this sale, he received a sales contract that will pay him $58 a month. None of the monthly payment of $58 is interest so the payment cannot be counted as income.