Can I ask for proof of income?

Question

I got this application. I can’t imagine an adoption subsidy that is $10k per month. Can I ask for proof? A few other red flags but this is the main one. It puts this applicant at 6.7x rent. Rent is $2150.

Nathan Gesner · Answer

You should always ask for "verifiable income" and then they have to provide documentation to prove it. If they're getting $10,000 in adoption subsidies, I would say they're probably running some kind of scam. I think most states have a max subsidy of under $500. Alaska is the highest with just over $1,000. That means they would have to adopt ten or more children, each with a subsidy of $1,000 a month. I don't believe it

They need paperwork to prove the income. That could be a W2 or paystub, bank statements, tax returns, or whatever. You may need to do some research to verify. For example, I recently had a 23-year-old attempt to rent from us that claimed $9,000 a month selling campers. It looked real, but didn't seem realistic, so I looked up the employers number online (never use the number provided by the applicant because it could be to a friend or relative) and confirmed that he's been employed there for two years and that he does actually make that amount in sales commission.

Greg Scott · Answer

Of course you can.  Most people are showing W2s although those can easily be faked these days.  Best bet is to see 2 months of bank statements to confirm deposits.

Genny Li · Answer

Adoption subsidies can be this high when you adopt special needs children. The state also continues to pay for their medical bills.  Just FYI.  It gets ugly when they age out of the system, though, as the support for adults who have high needs is lower than for kids inside the system, and they usually end up in group homes or nursing homes, unless they are strictly suffering from a severe illness and have no developmental delay.

But bank statements work, yes.

Genny Li · Answer

I hope this is replying right....

There are some families where mom is a stay-at-home special needs mom, and they often have like 4 kids who are severely disabled, and so it adds up to a decent income.

But you're right, I'd expect them to own a home that's modified for handicapped accessibility.

Nathan Gesner · Answer

I've adopted three children and used to work for the state, so I'm familiar with adoption subsidies. The OP is in Oklahoma where the subsidy is less than $700 a month. Even if they were in Alaska and had the highest subsidy on each child ($1,500), then they would have to adopt quite a few special needs children to make that amount.

Something doesn't smell right.

Joe Splitrock · Answer

Anything you receive on an application can be questioned and you can ask for additional proof. In the case of income, we always require last two pay stubs for W2. In the case of assistance payments, we generally ask for an award letter and contact details for the plan administrator. My guess is that the $10,000 payment is either one-time or only for a couple months. My company pays up to $30K reimbursement on adoption costs and I know organizations and churches that would pay $10-20K as one time payments. Payments that are one time or short term cannot be used as long term income. I had an applicant last month who put "stimulus payment" as part of their monthly income, haha. Either stimulus payments or child tax credits are not income, they reduce payable taxes. People don't understand the difference between income and credits or one time payments.

There are generally four ways to verify income:

1. Pay statement, award letter (statement of benefit for things like disability or pension) or W2 shows the actual pay amount.

2. Bank statements show cash flowing into the account. This is good for self employed.

3. Tax returns. Good for self employed.

4. Contact employer or benefit administrator. This is generally done in combination with the above to ensure you didn't receive forged documents and to make sure the person is still employed or receiving the benefit.

Bruce Woodruff · Answer

Joe - I get #2 of course, but #3 you gotta be kidding right....? :-)

Joe Splitrock · Answer

Without an employer to verify income, how else would someone verify how much money a business brings in? I usually start with credit report and bank statements, then go from there. Asking for tax returns is very normal in this situation, same as what a bank would do for a loan if you were self employed.

Adam Hurst · Answer

Thanks for the ideas!

Scott M. · Answer

yes, you can and you should.  Should always ask for verification and then you should verify the verification where you can.

Can I ask for proof of income?

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