Chapter 5: Financial Support
Introduction
The Corporation provides a support or living allowance to you to cover the cost of food, housing, and other basic necessities during service. Amounts are low because you are expected to live at approximately the same economic level as the people you are serving. The Corporation assumes no financial responsibility for a member other than the allowances and benefits provided to a member as discussed in this handbook or as determined by the Corporation. The Corporation assumes no financial responsibility for a member's spouse or dependent children. AmeriCorps*VISTA sponsoring organizations may not supplement the living allowance members receive from the Corporation unless specifically authorized by the Corporation.STANDARD ALLOWANCES
LIVING ALLOWANCE
Upon assignment as an AmeriCorps*VISTA member, you will begin receiving a living allowance. The Corporation determines the living allowance rate, which varies according to the local cost of living in the area where you serve.Member living allowances are computed on a daily rate and paid every other week. Living allowance payments cover a 14-day period. Direct deposit payments to AmeriCorps*VISTA members are made five days after the pay period ends.
Federal income tax deductions and life insurance premiums, if applicable, are withheld from the living allowance. No state, county, or city tax deductions are withheld. You are responsible for paying the appropriate taxes. (See Chapter 14 for information on income exclusion of benefits under federal, state, and local assistance programs.)
END-OF-SERVICE STIPEND
The end-of-service stipend is a post-service readjustment allowance intended to offset expenses after ending service. Prior to or during Pre-Service Orientation, you elected to receive either the end-of-service stipend or the Segal AmeriCorps Education Award. The end-of-service stipend, which is currently $1,200, is given to members who successfully complete 12 months of service. Members generally do not receive a stipend if they do not complete 12 months of service. However, if a member's service is ended for compelling circumstances, the member will receive a prorated stipend (see the Prorated Stipend section below). Members whose terms of service are extended for additional months will receive an additional stipend at the rate of $100 per month. Federal income tax and FICA (Social Security and Medicare) deductions are withheld from the stipend at the time of payment.
At any time prior to the end of the 10th month of service, members who initially elected the Segal AmeriCorps Education Award can change their decision and elect the end-of-service stipend instead. To make this change, you must complete a Second Choice Prior to End of 10th Month Benefits Election Form (see Appendix B) and return it to your Corporation State Office. The Corporation does not automatically send this form. A properly completed form must arrive in the Corporation State Office before the end of the tenth month of service. No further changes may be made by members. (See Chapter 6 for a complete discussion of the Segal AmeriCorps Education Award.)
Members who initially elected the end-ofservice stipend cannot switch to the Segal AmeriCorps Education Award, but they may be eligible for other education benefits. (See Chapter 6 for information on education benefits.)
Members who reenroll have the option to select either the stipend or education award for their second or third year of service. Members can elect a maximum of two education awards.
The stipend is disbursed automatically with the last two living allowance payments, provided that service is completed as scheduled and end-ofservice documents are properly completed and submitted to the Corporation State Office. Members who continue in AmeriCorps*VISTA immediately after completing a year of service willreceive their stipend for the first year in the final pay period for that term of service, provided all ocumentation has been completed and submitted on a timely basis.
PRORATED END-OF-SERVICE STIPEND
In rare circumstances, AmeriCorps*VISTA members who leave service early (excluding members terminated by the Corporation State Director for cause, such as misconduct) may qualify for a prorated end-of-service stipend. The Corporation State Director has the authority to approve member eligibility for a prorated stipend if the member leaves service early because of a compelling personal circumstance, such as:
- Serious or critical illness or disability of the AmeriCorps*VISTA member
- Death, critical illness, or disability of an immediate family member (spouse, domestic partner, parent, sibling, child, or guardian), if this event makes completing a term unreasonably difficult or impossible
- Conditions attributable to the program and not to the AmeriCorps*VISTA member, such as natural disaster, strike, or premature closing of a project or program that makes completing a term unreasonably difficult or impossible
Members have the primary responsibility for demonstrating that compelling personal circumstances prevent them from completing their term of service. Members must communicate and provide documentation of these circumstances to the supervisor, who will submit the information to the Corporation State Office for a determination.
A prorated end-of-service stipend may also be given for public policy reasons or other extenuating circumstances, as determined by the Corporation, such as:
- Fulfilling military service obligations
- Fulfilling jury duty obligations
- Electing not to complete service after a period in deferral of service status
- Accepting employment by a member who is a recipient of Temporary Assistance to Needy Families
- Accepting a Fulbright Scholarship or similar honorary award requiring relocation
Compelling personal circumstances do not include leaving a program to enroll in school, or to obtain employment (other than described above), or because of dissatisfaction with the program.
If you leave AmeriCorps*VISTA service for compelling personal circumstances or for the public policy reasons listed above and have completed at least 15 percent (55 days) of your required service, you are eligible for a prorated portion of the stipend that corresponds to the portion served. The stipend accrues at a rate of $100 per month. If you served seven months, for example, you would receive $700.
Early Departure for Another AmeriCorps Program
If you are accepted into another AmeriCorps program and are required to begin training or service in the other program prior to the conclusion of AmeriCorps*VISTA service, you are also eligible for a prorated end-of-service stipend, provided you served at least 335 calendar days as an AmeriCorps*VISTA member.SEGAL AMERICORPS EDUCATION AWARD
The Segal AmeriCorps Education Award is a postservice benefit that can be used to pay for education costs at qualified institutions of higher education, for educational training, or to repay qualified student loans. The education award is $4,725 for a year of full-time service, and is prorated for part-time. You can access the award in full or in part, and can take up to seven years after your term of service has ended to use the award.Before Pre-Service Orientation, you received a Benefits Election Form to complete. This form gave you the choice to select either the end-ofservice stipend, as discussed above, or the Segal AmeriCorps Education Award. You cannot choose both. If you selected the education award and die during service, the Corporation will consider your election of the education award rescinded and your estate will receive a prorated end-of-service stipend.
At any time prior to the end of the tenth month of service, members who initially elected the Segal AmeriCorps Education Award can change their decision and elect the end-of-service stipend instead. To make this change, you must complete a Second Choice Prior to End of 10th Month Benefits Election Form (see Appendix B) and return it to your Corporation State Office. The Corporation does not automatically send this form. A properly completed form must arrive in the Corporation State Office before the end of the tenth month of service. No further changes may be made by members. (See Chapter 6 for a complete discussion of the Segal AmeriCorps Education Award.)
PRORATED SEGAL AMERICORPS EDUCATION AWARD
In rare circumstances, AmeriCorps*VISTA members who elected to receive a Segal AmeriCorps Education Award, but left service early (other than those members who were terminated early by the Corporation State Director for cause, such as misconduct) may qualify for a prorated education award. A detailed discussion of the limited bases for members to qualify for a prorated education award is in Chapter 6: Education Benefits, under the section, "If You Elect the Segal AmeriCorps Education Award."DISCRETIONARY ALLOWANCES
RELOCATION ALLOWANCE
Members serving a 12-month term and moving from their home of record to their project site are eligible to receive a relocation allowance. The Corporation State Office may authorize a relocation allowance for an initial assignment or a project transfer. This allowance is intended to cover initial moving expenses (security deposit, utility deposit, etc.). The amount, which may not exceed $550, is determined by the Corporation State Director; therefore, requests for relocation allowance should be directed to the Corporation State Office. The relocation allowance is subject to federal income tax deduction, and it is disbursed in the regular biweekly living allowance payment.
EMERGENCY EXPENSE ALLOWANCE
The Corporation State Office may authorize a onetime expense allowance to cover extraordinary costs, such as reimbursement for theft, fire loss, or special clothing necessitated by severe climate. This allowance is not intended to supplement the living expenses of members. Expense allowances are paid directly to the member by the Corporation.HOW DO AMERICORPS*VISTA MEMBERS GET PAID?
DIRECT DEPOSIT
As an AmeriCorps*VISTA member, you are required to have your biweekly living allowance sent via electronic funds transfer or direct deposit. The U.S. Treasury requires federal payments to be made by direct deposit, except when this form of payment would cause unusual hardship on the payee. (For hardship cases, see Appendix A for the procedure to have payments made by paper check.)To set up direct deposit, you and your financial institution must complete the Direct Deposit Sign- Up Form (form 1199A) and return it to your Corporation State Office. You may obtain a form 1199A from any bank, fill it out, and send it to your Corporation State Office or submit it at Pre- Service Orientation registration. If you currently do not have a bank account, you may open an Electronic Transfer Account for a nominal monthly fee. To learn more, visit www.eta-find.gov.
The Corporation for National and Community Service will process your direct deposit request form within five business days of receipt. If you change your bank or account number at any time, or close the account, you must inform the Corporation immediately.
All regular biweekly living allowances, as well as any other taxable allowances, are recorded on the member's earnings statement, which usually arrives in the mail a few days after your biweekly allowance is directly deposited into your bank account.
TAXES-OBLIGATIONS, WITHHOLDINGS, AND CREDITS
AmeriCorps*VISTA members pay taxes. All AmeriCorps*VISTA allowances, except service related travel payments, baggage allowances (discussed in Chapter 7: Travel and Transportation Support), and emergency expense allowances, are subject to federal and state income taxes.
FEDERAL TAXES
The Corporation withholds federal income tax deductions from the regular biweekly allowance payment. You must complete a W-4 form to determine the amount of income tax deductions you want withheld. If you believe you are exempt from having federal income tax deductions withheld from your allowance payment, you must claim exempt status on the W-4 form. The W-4 form explains the eligibility requirements for tax-exempt status. W-4 forms that claim exemption from income tax withholding expire February 15 of the following year. If a new W-4 form for the new year is not submitted to the Corporation State Office before February 15, income tax withholding will be deducted as if W-4 form had been filed showing single and zero allowances. The W-4 form may be obtained from a local Internal Revenue Service (IRS) office, or online at www.irs.gov. The completed form should be sent to the Corporation State Office.STATE, COUNTY, AND MUNICIPAL TAXES
The Corporation does not withhold any state,county, or city income tax deductions from your allowance payment; however, you are still responsible for all your taxes. Saving a portion of your allowance each month is a wise way to accrue funds needed for your state and local income taxes. You should contact the state and local government tax offices in the state where you are assigned, or where you maintain a permanent residence, to help you determine the amount of funds you will need to save to pay your taxes.SOCIAL SECURITY AND MEDICARE
FICA (Social Security and Medicare) is withheld from the end-of-service stipend and submitted to the Internal Revenue Service at the time the stipend is paid to the member. Security regulations toward credits of coverage. The term "coverage" refers to the accumulation of 40 credits (10 years) necessary for an individual to receive Social Security benefits at retirement. The amounts required for credits of coverage are adjusted annually by the Social Security Administration. Members seeking to obtain "coverage" should contact a local Social Security office to determine if the stipend amount is sufficient to be applied.
W-2 FORM-STATEMENT OF EARNINGS AND TAXES WITHHELD
The Corporation will mail a W-2 form to you by January 31 of each year showing the amount of earnings and the amount of federal taxes withheld for the preceding calendar year. If the W-2 form has not arrived by February 15, you should advise your supervisor, who will then inform the Corporation State Office. The Corporation must be advised of any mailing address change that occurs between the time you end AmeriCorps*VISTA service and when the Corporation mails the W-2 form. Change of address notices after your service terminates should be sent to the Corporation State Office in the state where you served. The notification should indicate that the address change applies to a former AmeriCorps*VISTA member.W-5 FORM-EARNED INCOME CREDIT ADVANCE PAYMENT CERTIFICATE
Under the Tax Reform Act of 1986, certain families with limited income may be eligible for earned income credit (EIC). Earned income credit is an amount that is subtracted from taxes owed. If your credit is larger than your tax, or if there is no tax, you may be eligible for a refund from the Internal Revenue Service even if you had no tax withheld from your pay. EIC is based on your earned income, including your AmeriCorps*VISTA allowances.
The Internal Revenue Service determines an individual's eligibility for EIC. It is not the responsibility of the Corporation to verify eligibility. If you expect to qualify for EIC, or are not sure if you qualify, you should contact the Internal Revenue Service to verify eligibility. Thereafter, if eligible, you can choose to get credit in advance as part of the regular AmeriCorps*VISTA allowance payment. To receive the earned income credit in advance, you must complete and file a W-5 form, Earned Income Credit Advance Payment Certificate, with the Corporation at the beginning of each calendar year. It is your responsibility to notify the Corporation annually that you want the advance payment of EIC. Do not depend on the Corporation to notify you of the time to submit a new W-5 form. Failure to request the earned income credit advance payment by December 31 of the prior year will result in a discontinuation of EIC. If you receive advance payments, you must file a form 1040, 1040A, or 1040EZ for the tax year. The W-2 form, Wage and Tax Statement, provided by the Corporation, will reflect the amount of advance earned income tax credit paid. EIC advance payments do not constitute wages and are not subject to income tax.
Members who are eligible for EIC but do not receive the advance payment can still claim EIC on their tax returns. A form 1040, 1040A, or 1040EZ must be filed to claim EIC even if no taxes were withheld from allowances during the year.
Receipt of EIC may affect your benefit levels under certain public assistance programs. Therefore, it is advisable to check with these programs before filing for EIC.
DEDUCTIONS FROM ALLOWANCES
With your permission, the Corporation will make deductions from your biweekly living allowance payment to cover court-ordered or voluntary child support or alimony payments and court-ordered bankruptcy. IRS tax levy deductions will be made without your permission. Such deductions will be shown under "Tax and Court Levies" on your earnings statement.
DEBTS YOU OWE TO THE FEDERAL GOVERNMENT
Effective January 1998, the Treasury Department implemented the Treasury Offset Program to collect debts owed to the United States. The program works automatically to reduce the amount of federal payments to people or companies that have delinquent federal and state debts or are delinquent with child support payments.Currently, this program covers all payments that the Corporation makes to AmeriCorps*VISTA members, except the living allowance payment, end-of-service stipend, and Segal AmeriCorps Education Award. In the near future, as the program is upgraded, it may cover the living allowance payment, end-of-service stipend, and education award. Currently, the Treasury Offset Program includes travel and other miscellaneous reimbursements. The money will be taken from payments made to AmeriCorps*VISTA members who are identified by the Treasury as having delinquent federal debt. Any federal debt older than six months can be collected through this program. If you owe a debt of this kind, the Treasury Department will take payments that the Corporation would have made to you to offset the debt. You will receive a letter from the Treasury explaining that the deducted amount is being applied to your outstanding debt. The Treasury Department's letter will include the name of the creditor agency and contact points, including telephone numbers for the creditor organization. The Corporation plays no role in this process.
RECOVERY OF OVERPAYMENT
Overpayments, when they occur, include travel allowances greater than the amount to which a member is entitled. Overpayment also includes living allowance amounts paid to a member that exceed the amounts to which the member is entitled because the member terminated early before the Corporation was advised of the termination.If you are overpaid any time during your service, the overpayment is collected at the rate of $25 per pay period from your regular biweekly allowance payment, with some exceptions, as determined by the Corporation. If your overpayment is excessive, the amount may be collected at a rate higher than $25 per pay period. Any overpayment still outstanding after you complete service will be collected from the final allowance and/or stipend payments.
To avoid such overpayments, you should give the sponsoring organization and the Corporation two weeks notice if you must terminate early from AmeriCorps*VISTA service. If an overpayment still remains after deduction from the final payments, former members must pay the balance to the Corporation. You may also make payments online at www.pay.gov. To recover any overpayment remaining after completion of service, the Corporation will initiate the debt collection process.
LIFE INSURANCE
AmeriCorps*VISTA members may purchase life insurance under a group policy with the Reliance Standard Insurance Company. Enrollment in the group plan is voluntary and takes place during Pre-Service Orientation. If you wish to purchase insurance, you must complete a Designation of Beneficiary form. If you do not wish to enroll in the group policy, you must complete the "Waiver of Coverage" section at the bottom of the form.
The insurance coverage is currently $19,600 for members under the age of 60 at the time of their death, $9,800 for members aged 60-69, and $4,900 for those who are age 70 and over. Those who set up life insurance coverage may also use the confidential bereavement counseling service. For this free service, call 800-961-3007.
The insurance premium is deducted from the member's biweekly living allowance, and coverage begins at the time of enrollment in the plan.
If you waive coverage during the Pre-Service Orientation, you cannot subsequently be covered during current service without undergoing a physical examination at your own expense and submitting a Group Evidence of Insurability form to the Corporation State Office. This form may be obtained from:
- Reliance Standard Life Insurance Company
P.O. Box 8330
Philadelphia, PA 19101-8330
800-644-1103
customer.service@rsli.com
The insurance company, at that time, determines whether to accept your application.
You may cancel your life insurance at any time by informing the Corporation State Office in writing via mail, e-mail, or fax. Life insurance coverage ends on the date your service ends. You may convert to an individual life insurance policy without a medical examination if you apply for conversion within one month of termination. Conversion forms are available from the Corporation State Office.
CHILD CARE
AmeriCorps*VISTA offers child care benefits to qualifying members. The maximum amount of child care assistance a member can receive is $400 per child per month. AmeriCorps*VISTA members may have up to two caregivers, and the members determine how they would like to divide up the child care amount. Benefits are nontaxable to members, but payments to the caregiver may be taxable. Reimbursement parameters, including what type of caregivers are eligible for reimbursement in each state, are set by the Child Care and Development Block Grant, a federal and state partnership that enables low-income families to access quality child care. For more information about this child care program, visit the Web site at http://www.acf.hhs.gov/programs/ccb. Your eligibility for child care benefits begins when you begin AmeriCorps*VISTA service; therefore, they do extend to Pre-Service Orientation. To qualify for child care benefits, you must have children under age 13 and you must be determined eligible based on income guidelines. Although you may apply for this benefit during Pre-Service Orientation, we encourage you to determine your eligibility for child care benefits before you attend Pre-Service Orientation.
WHOSE INCOME IS COUNTED?
Income received by all members of the family unit who reside in the household is counted to determine income eligibility. The family unit consists of all children in the home under age 18, biological parents of the children (married or nonmarried), and any legal guardian. Each state has income eligibility requirements, which are set by the National Association of Child Care Resource and Referral Agencies-not by the Corporation. If your income is above the limit, you cannot receive child care benefits. The living allowance cannot be adjusted to make you eligible.TYPES OF INCOME COUNTED
The following types of income are counted to determine income eligibility:
- Money, wages, and salary
- SI, TANF, public assistance
- Unemployment
- Child support or alimony
- Worker's compensation
- Retirement, pensions, and annuities
- Social security
- Self-employment
If you reenroll for a second or third year of service with AmeriCorps*VISTA, you must be recertified for child care benefits for each year.
HOUSING ASSISTANCE
Sponsoring organizations are prohibited from providing direct monetary assistance to AmeriCorps*VISTA members for housing, but they may help members with housing in several ways. Some sponsors elect, but are not required, to provide housing subsidies directly to landlords for rent support (see "Member Housing" in Chapter 13).
