{
  "id": "discretionary-income",
  "version": "bf4ca08c70be",
  "status": "published",
  "name": "Discretionary Income Calculator",
  "question": "What is my discretionary income?",
  "summary": "Works out your discretionary income for federal student loan income-driven repayment (IBR, PAYE or ICR) from your income, family size and the 2026 poverty guideline.",
  "category": "finance",
  "subcategory": "loans",
  "url": "https://www.acalculator.org/finance/discretionary-income-calculator",
  "markdown": "https://www.acalculator.org/finance/discretionary-income-calculator.md",
  "kind": "function",
  "method": "Discretionary income = AGI − 150% (IBR, PAYE) or 100% (ICR) × (first person + (family size − 1) × each added person), at least 0; payment = 10%, 15% or 20% of it ÷ 12.",
  "assumptions": [
    "HHS poverty guidelines for 2026 (or 2025), for the 48 states and DC, Alaska or Hawaii.",
    "IBR and PAYE payments are capped at the 10-year standard payment; ICR is the smaller of 20% of discretionary income and a 12-year payment adjusted for income. Those caps are not applied.",
    "The Repayment Assistance Plan (RAP), open from July 1, 2026, uses AGI without a poverty guideline, so it has no discretionary income."
  ],
  "inputs": {
    "$schema": "https://json-schema.org/draft/2020-12/schema",
    "type": "object",
    "properties": {
      "agi": {
        "title": "Adjusted gross income",
        "description": "Your AGI from your latest federal tax return (with your spouse’s if you file jointly).",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 100000000
      },
      "size": {
        "title": "Family size",
        "description": "You, your spouse, and children and others you support, as your loan servicer counts them.",
        "type": "integer",
        "minimum": 1,
        "maximum": 50
      },
      "state": {
        "title": "Where you live",
        "description": "Alaska and Hawaii have their own, higher poverty guidelines.",
        "type": "string",
        "enum": [
          "48",
          "AK",
          "HI"
        ]
      },
      "plan": {
        "title": "Repayment plan",
        "description": "The plan sets how much of the guideline is protected and the share of the rest you pay.",
        "type": "string",
        "enum": [
          "ibr",
          "ibr-old",
          "paye",
          "icr"
        ]
      },
      "year": {
        "title": "Poverty guideline year",
        "description": "Servicers use the guideline in effect when they process your income.",
        "type": "string",
        "enum": [
          "2026",
          "2025"
        ]
      }
    }
  },
  "outputs": {
    "discretionary": {
      "label": "Discretionary income a year",
      "description": "AGI minus the protected share of the poverty guideline, never below zero.",
      "format": "money"
    },
    "monthlyIncome": {
      "label": "Discretionary income a month",
      "description": "Discretionary income divided by 12.",
      "format": "money"
    },
    "payment": {
      "label": "Monthly payment",
      "description": "The plan’s share of discretionary income, divided by 12.",
      "format": "money"
    },
    "protected": {
      "label": "Protected income",
      "description": "150% (or 100% for ICR) of the poverty guideline for your family size.",
      "format": "money"
    },
    "guideline": {
      "label": "Poverty guideline",
      "description": "The HHS poverty guideline for your family size, state and year.",
      "format": "money"
    }
  },
  "defaultAnswer": {
    "inputs": {
      "agi": 50000,
      "size": 1,
      "state": "48",
      "plan": "ibr",
      "year": "2026"
    },
    "outputs": {
      "discretionary": 26060,
      "monthlyIncome": 2171.67,
      "payment": 217.17,
      "protected": 23940,
      "guideline": 15960
    },
    "text": "Your discretionary income is $26,060.00 a year, and the plan’s payment is about $217.17 a month."
  },
  "examples": [
    {
      "given": {
        "agi": 50000,
        "size": 1,
        "state": "48",
        "plan": "ibr",
        "year": "2026"
      },
      "expect": {
        "guideline": 15960,
        "protected": 23940,
        "discretionary": 26060,
        "monthlyIncome": 2171.67,
        "payment": 217.17
      },
      "source": "34 CFR 685.209 (https://www.ecfr.gov/current/title-34/subtitle-B/chapter-VI/part-685/subpart-B/section-685.209): AGI − 150% of the guideline; HHS 2026 guideline $15,960 (https://aspe.hhs.gov/topics/poverty-economic-mobility/poverty-guidelines); 50,000 − 23,940 = 26,060; 10% ÷ 12 = $217.17"
    },
    {
      "given": {
        "agi": 75000,
        "size": 4,
        "state": "48",
        "plan": "paye",
        "year": "2026"
      },
      "expect": {
        "guideline": 33000,
        "protected": 49500,
        "discretionary": 25500,
        "payment": 212.5
      },
      "source": "HHS 2026 guideline for 4: $33,000; PAYE 150% and 10% (StudentAid.gov IDR plans); 75,000 − 49,500 = 25,500; 2,550 ÷ 12 = $212.50"
    },
    {
      "given": {
        "agi": 40000,
        "size": 2,
        "state": "AK",
        "plan": "icr",
        "year": "2026"
      },
      "expect": {
        "guideline": 27050,
        "discretionary": 12950,
        "payment": 215.83
      },
      "source": "HHS 2026 Alaska guideline for 2: $27,050; ICR 100% and 20% (34 CFR 685.209); 12,950 × 20% ÷ 12 = 215.833…, $215.83"
    },
    {
      "given": {
        "agi": 30000,
        "size": 3,
        "state": "48",
        "plan": "ibr-old",
        "year": "2026"
      },
      "expect": {
        "protected": 40980,
        "discretionary": 0,
        "payment": 0
      },
      "source": "34 CFR 685.209: discretionary income is the greater of $0 and the difference; 150% × 27,320 = 40,980 is above $30,000"
    },
    {
      "given": {
        "agi": 60000,
        "size": 2,
        "state": "HI",
        "plan": "ibr",
        "year": "2025"
      },
      "expect": {
        "guideline": 24320,
        "discretionary": 23520,
        "payment": 196
      },
      "source": "HHS 2025 Hawaii guideline for 2: $24,320 (90 FR 5917); 60,000 − 36,480 = 23,520; 10% ÷ 12 = $196.00"
    }
  ],
  "sources": [
    "Electronic Code of Federal Regulations, 34 CFR 685.209, Income-driven repayment plans (definition of discretionary income): https://www.ecfr.gov/current/title-34/subtitle-B/chapter-VI/part-685/subpart-B/section-685.209 (retrieved 2026-10-05)",
    "Federal Student Aid, Income-Driven Repayment Plans: https://studentaid.gov/manage-loans/repayment/plans/income-driven (retrieved 2026-10-05)",
    "U.S. Department of Health and Human Services, ASPE, HHS Poverty Guidelines for 2026: https://aspe.hhs.gov/topics/poverty-economic-mobility/poverty-guidelines (retrieved 2026-10-05)",
    "Federal Register, Annual Update of the HHS Poverty Guidelines (2025), 90 FR 5917: https://www.federalregister.gov/documents/2025/01/17/2025-01377/annual-update-of-the-hhs-poverty-guidelines (retrieved 2026-10-05)"
  ],
  "related": [
    "student-loan",
    "federal-poverty-level",
    "student-loan-payoff"
  ],
  "changelog": []
}