Vendor payments are monetary payments made by a non-household member for household expenses.

These payments must be made by a person outside of the household (with the non-household member's funds) and paid directly to the household's creditors or to a person or organization providing a service to the household.

The household must not have the option of receiving these funds directly. Examples of excluded vendor payments appear below:

1)A friend, employer, agency, church, relative, or former spouse makes payments for household expenses such as rent or utilities directly to the landlord or utility company. If the payment is made from funds not owed to the household, it is a vendor payment and excluded as Income.

2)If an employer pays a household rent or house payment directly to the landlord or financial institution in addition to paying regular wages, it is a vendor payment and excluded as income. If the employer provides a house to an employer, the value of the housing will ~ be considered as income.

3)Separate and identifiable alimony or support payments made by a person outside of the household under a court order or other legally binding agreement which requires direct payment to a third party are vendor payments and excluded as income. (When the court awards part of a pension to an ex-spouse and that payment is diverted by the payor directly to the ex-spouse, only the portion actually received by the household will be considered income. See FSC 5712.)

4)Payments by a government agency to a child care facility for the purpose of providing day care for a household member are considered vendor payments and excluded as income.

5)Payments or allowances made by Department of Housing and Urban Development (HUD) or by the Farmers Home Administration (FMHA) directly to mortgage holders, landlords or utility providers are vendor payments and excluded as income. (See FSC 5411 for instructions on handling utility reimbursements or utility assistance payments from HUD or FMHA.) Mortgage payments made by state or local housing authorities directly to the mortgage holder are also considered vendor payments and excluded as income.

6)Emergency assistance for a migrant or seasonal farm worker household during the period the household is In the job stream Is considered a vendor payment and excluded as income. Such assistance may include, but is not limited to, emergency vendor payments for housing or transportation. (See FSC 5405, item 11.)

(7)Assistance payments provided to a third part on behalf of a household under a State or Local General Assistance (GA) program, or another local basic assistance program comparable to GA will be considered a vendor payment and excluded as Income so long as no assistance under this program may be provided directly to the household in the form of a cash payment or an Instrument which can be converted to cash. (NOTE: No such programs are known to exist in this State; however, payments received under these conditions In other states will be excluded as income.)

Demonstration project cash-out funds are also excluded as income. Cash-out funds are in-kind or vendor payments which have been converted to direct cash payments under the approval of a Federally authorized demonstration project. If the in-kind or vendor payment would have been excluded as income, the cash-out funds will also be excluded as income.

Vendor payments included as income are called Diverted Payments or

Diverted Wages. See FSC 5706, Diverted Payments, or FSC 5506, Diverted

Wages.