Question

Under TANF your state provides an income guarantee of $5,000 and a benefit reduction rate of 40%. The typical recipient can work up to 2,000 hours per year at a wage of $10 per hour. What is the total income of a recipient that works 300 hours per year?

Answer 1

Guaranteed income = $5,000

Benefit reduction rate = 40%

Wage rate per hour = $10

Number of hours recepient works in a year = 300 hours

Total wage income of recepient = 300 * $10 = $3,000

Reduction in benefit = (40/100) * $3,000 = $1,200

Benefits to be received = $5,000 - $1,200 = $3,800

Calculate the total income -

Total income = Wage income + Benefits to be received = $3,000 + $3,800 = $6,800

The total income of a recepient that works 300 hours per years is $6,800.