In order to determine income eligibility for Medicaid, you must count only the earned and unearned income that is left after subtracting from gross income the various income exclusions.
The exclusions are different for the Aged, Blind and Disabled (ABD) Covered Groups and the Family & Child (F&C) Covered Groups. (See ABD Income Exclusions for the list of exclusions when determining eligibility for ABD Covered Groups. See Medicaid Covered Groups for more information about the different groups.)
This topic outlines the income exclusions for the F&C Covered Groups. It is divided into three parts:
· What Is Not Income
· Earned Income Exclusions
· Unearned Income Exclusions
The following types of receipts are defined as not being income. They are not included in either Gross Income or Countable Income. (Gross income is used in the 1st step of the financial eligibility test for adult members of a Low Income Families with Children (LIFC) Non-VIEW covered group):
· Not Cash: A received asset is not income if it is not cash or its equivalent (check, money order, electronic transfer, etc.)
· Reimbursements: Reimbursements for out-of-pocket expenses are not counted as income. Examples include travel expenses such as reimbursements for mileage, reimbursement to the caretaker of a child for child care expenses, reimbursement for expenses incurred as a volunteer, etc.
· Acting as Agent: Money that belongs to another person that you receive because you are acting as an agent for that person is not income.
· Conversion or Sale of a Resource: Receipts from the sale, exchange, or replacement of a resource are not income, but are resources that have changed their form. This includes cash or in-kind items that are provided to replace or repair a resource that has been lost, damaged, or stolen.
· Tax Refunds: Tax Refunds, including Earned Income Tax Credits, are not income.
· Loans: Money that you receive as a loan is not income because you have an obligation to repay it. Note that if you earn any interest on the loaned money because you place it in a savings account or some other investment, the interest is unearned income.
· Shelter Contributions and Bills Paid by a Third Party: Generally, if your shelter is contributed or if a third party pays one or more of your bills, that is not income. The exception has to do with child support obligations. Pending establishment of a child support obligation by the District Child Support Enforcement Office, shelter contributions or other payments count as unearned income even if the payments were ordered by a court. Once the support order is established and payments are made in lieu of child support, these are third party payments and are not income unless they meet the definition of contributions in kind (food or clothing totally supplied on a regular basis). The $50 disregard is not applicable to third party payments.
Earned Income is income from employment or self-employment. It is income that is received as wages, salary, commissions, or as profits from self-employment. It is the amount prior to any deductions for taxes, insurance, pensions, or any other payroll deductions.
The first two exclusions are not included in either Gross Income or Countable Income. (Gross income is used in the 1st step of the financial eligibility test -- 185% screening -- for non-VIEW adult members of a Low Income Families with Children (LIFC) covered group).
The other exclusions are counted as Gross Income for the 185% screening but are excluded when determining Countable Income for other F&C eligibility purposes.
The Earned Income Exclusions are:
· Child Workforce Investment Act Income: Earned income of an eligible child (less than 18, or 18 and expected to graduate prior to 19) derived from employment in a program under the Workforce Investment Act is excluded. (This income is excluded even when determining Gross Income for 185% screening purposes.)
· Student Income: Earned income of a child under age 19 who is a student is excluded. (This income is excluded even when determining Gross Income for 185% screening purposes.)
· Standard Work Exclusion: A standard work exclusion of the first $90 of gross monthly earned income is excluded for each employed member of the Assistance Unit whose income is not otherwise exempt. (For LIFC, the standard work exclusion is not allowed in the 185% screening.)
· $30 Plus 1/3 Earned Income Exclusion: For the LIFC covered group only, $30 plus 1/3 of the remaining monthly earned income is excluded for 4 consecutive months from the total earnings (other than those specified above) and from self-employment of each employed member of the Assistance Unit. (The $30 plus 1/3 earned income exclusion is not allowed in the 185% screening.)
· $30 Earned Income Exclusion: For the LIFC covered group only, $30 per month earned income is excluded for 8 consecutive months following the receipt of 4 months of the $30 plus 1/3 earned income exclusion from total earnings (other than those specified above) and from self-employment of each employed member of the Assistance Unit. (The $30 earned income exclusion is not allowed in the 185% screening.)
· Child Care/Incapacitated Adult Care Exclusion: Monthly anticipated child care expenses or incapacitated adult care expenses, up to the appropriate maximums, which are paid for by the caretaker-relative must be excluded. (For LIFC, the child care/incapacitated adult care exclusion is not allowed in the 185% screening.) For this exclusion, follow these rules:
o For full-time employment, deduct an amount equal to the anticipated cost, not to exceed $175 per month, for care of each child, age 2 and older and/or incapacitated adult in the family unit. In the case of child care for a child under 2 years old, deduct the anticipated cost not to exceed $200 per month.
o For part-time employment, deduct an amount equal to the anticipated cost, not to exceed $120 per month, for care of each child and/or incapacitated adult in the family unit.
o Full-time employment means employed to work 30 hours or more per week on an on-going basis; or working, or expected to work 120 hours or more per month (for an individual working on a fluctuating basis).
Unearned income is all income received by members of the Assistance Unit that is not earned income. Unearned income consists of benefits (including public assistance benefits received from another state); royalties; child/spousal support; dividends and interest; some rental income; gifts; some home energy assistance contributions; and lump sums.
Unearned income is the actual amount received, or made available for use. (An exception: Medicare Part B premiums that are deducted from Social Security or Railroad Retirement benefits must be added to the actual amount received.) The income is counted in the month it is received or made available.
The Unearned Income Exclusions are:
· Home Produce: Home produce of the individual utilized for his/her family's own consumption is excluded.
· SNAP (Food Stamps): The value of food coupons under the SNAP (Food Stamp Program) is excluded.
· Commodities: The value of foods donated under the U.S.D.A. Commodity Distribution Program, including those furnished through school meal programs, is excluded.
· Federal Relocation Assistance: Any payment received under Title II of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 is excluded.
· Nutrition Program for the Elderly: Any benefits received under Title VII, Nutrition Program for the Elderly, of the Older Americans Act of 1965, as amended, are excluded.
· U.S. Education Grants or Loans: Any grant or loan to any undergraduate student for educational purposes made or insured under any program administered by the U.S. Secretary of Education is excluded. Programs that are administered by the U.S. Secretary of Education include: Pell Grant, Supplemental Educational Opportunity Grant, Perkins Loan, Guaranteed Student Loan, including the Virginia Educational Loan, PLUS Loan, Congressional Teacher Scholarship Program, College Scholarship Assistance Program, and the Virginia Transfer Grant Program.
· College Work Study Programs: Any funds derived from the federal College Work Study Program or any other college work study programs are excluded.
· Certain Scholarships or Grants: A scholarship or grant obtained and used under conditions that do not allow it to be used for current living costs is excluded.
· Vocational Rehabilitation Training Allowances: Training allowances (transportation, books, required training expenses and motivational allowances) provided by Vocational Rehabilitation (VR) for persons participating in VR Programs are excluded. (The exclusion is not applicable to the allowances provided by VR to the family of the participating individual.)
· SSI, TANF or Auxiliary Grants: Any portion of payments of Supplemental Security Income (SSI), Transitional Aid for Needy Families (TANF), and/or Auxiliary Grants are excluded.
· VISTA and other US Volunteer Services: Payments to VISTA Volunteers, when the monetary value of such payments is less than minimum wage, and payments for services of reimbursement for out-of-pocket expenses made to individual volunteers serving as foster grandparents, senior health aides, or senior companions, and to persons serving in the Service Corps of Retired Executives (SCORE) and Active Corps of Executives (ACE) and other programs pursuant to Titles II and III, of Public Law 93-113, the Domestic Volunteer Service Act of 1973 are excluded.
· VA Educational Allowances: The Veterans Administration (VA) educational amount for the caretaker aged 18 or older is excluded when it is used specifically for educational purposes. (Any additional money included in the benefit amount for dependents is counted as income to the individual for whom it is intended.)
· Foster Care/Adoption Assistance Payments: Foster care or adoption assistance payments received by anyone in the assistance unit are excluded.
· Job Corps Payments to Eligible Children: Any unearned income received from the Job Corps by an eligible child (less than 18, or 18 and expected to graduate by the end of the month in which he turns 19) is excluded as an incentive payment. (However, any payment received by any other Job Corps participant or any payment made on behalf of the participant's eligible child(ren) is counted as income to the individual.)
· Fuel Assistance: Any payment made under the Fuel Assistance Program is excluded. BUT any payments made directly to a household for home heating or cooling provided by suppliers of home energy, such as electric and gas companies and fuel oil dealers, must be counted as income.
When payments are received jointly by a household composed of Medicaid and non-Medicaid applicants/recipients, the Assistance Unit'spro rata share, based on the total number of persons in the household, must be considered as unearned income to the Medicaid unit.
· Child Nutrition Act: The value of supplemental food assistance received under the Child Nutrition Act of 1966 is excluded. This includes all school meal programs, the Women, Infants and Children (WIC) Program, the child care food program, and U.S.D.A. reimbursement payments to day care providers which are authorized by the National School Lunch Act.
· HUD Payments: HUD Section 8 and Section 23 payments are excluded.
· Certain Funds for Indian Tribes and Alaska Natives: Funds for Indian Tribes and Alaska Natives that are excluded by Federal law.
· Unemployment Compensation: Unemployment Compensation is counted as unearned income for all Covered Groups except in the 185% screening for adults in Low Income Families with Children (LICF). (Count Unemployment Compensation as unearned income in the 90% screening for LICF.) See Standards of Assistance for more on the 2-step screening.
· Child/Spousal Support: The first $50 of total child or child and spousal support payments received by the family/budget unit is excluded. The $50 exclusion is only applicable to current child/spousal support payments received each month.
Pending establishment of a child support obligation by the District Child Support Enforcement (DCSE) Office, payments made to a third party such as a rental agency in lieu of or in addition to child support, whether based on a court order or a mutual voluntary agreement between the Medicaid applicant/recipient and the responsible person, must be counted as unearned income to the child. The $50 disregard is not applicable to third party payments.
Third party payments made by an absent spouse in lieu of spousal support are to be treated as contributions in kind.
Payments sent to the recipient by DCSE that are identified as excluded support are excluded.
· Disaster Relief: Federal major disaster and emergency assistance provided under the Disaster Relief and Emergency Assistance Amendments of 1988 and disaster assistance provided by state and local governments and disaster assistance organizations is excluded.
· Certain Payments to Japanese: Payments received by individuals of Japanese ancestry under the Civil Liberties Act of 1988 are excluded.
· ESP and VIEW Support Payments: Payments by Employment Services Program (ESP) or VIEW for support services such as transportation, uniforms, child care, etc. are excluded.
· Agent Orange Payments: Any payment received from the Agent Orange Settlement Fund or any other fund established in response to the Agent Orange product liability litigation is excluded.
· Radiation Exposure Compensation Act Payments: Payment received by individuals under the Radiation Exposure Compensation Act (Public Law 101-426) is excluded.
· HUD Self-Sufficiency Program: Funds paid to an escrow account established under the Family Self-Sufficiency (FSS) Program of the Department of Housing and Urban Development are excluded.
· Interest on Certain Savings Accounts: Interest earned on a savings account for the purpose of paying for tuition, books, and incidental expenses at any elementary, secondary, or vocational school or any college or university for a family member, for making a down payment on a primary residence, or establishing a business is excluded.
· Nazi Persecution Payments: Payments received by victims of Nazi persecution under Public Law 103-286 are excluded.
· First $30 for Special Occasions: The first $30 received by each individual in the Assistance Unit during each calendar quarter for special occasions, such as birthdays, Christmas, etc. is excluded.
· Cash Contributions from Agencies or Organizations: Any cash contribution made directly to the Assistance Unit by an agency or organization must be counted as unearned income to the unit if such contribution is for any of the following:
o food, including special diets;
o personal care;
o household supplies and equipment;
o school supplies and expenses;
o utilities (including telephone);
o housekeeping and personal services;
o obligations incurred within the month of application;
o guardianship fees;
o average shelter costs appropriate to the locality in which the assistance unit resides (including rent, house payments, taxes, fire or comprehensive insurance repairs, installations, water sewage and trash disposal.
· Contributions In Kind: In-Kind contributions of any sort, including food, clothing, and household supplies, are not counted as income
· Lump Sum: In the month of receipt, the countable portion of a non-recurring lump sum (lump sum minus directly related expenses) is added to the individual's other income and counted as income to the individual's Assistance Unit.
The countable lump sum amount is also added to all other earned and unearned income in calculating the amount of the deemor parent's income to deem to the F&C child.
If a lump sum plus all other earned and unearned income is less than 100% Standard of Assistance in the locality for the number of members in the Assistance Unit, it is excluded from countable income when evaluating lump sum income.
· Walker v. Bayer Settlement Payments: Certain payments resulting from the settlement of the "Walker v. Bayer Corp" class action lawsuit are not counted as income in determining eligibility for Medicaid.
VA Medicaid Income Limits
VA Medicaid Resource Limits
VA ABD Income Exclusions
VA Medicaid Eligibility
VA Medicaid Covered Groups
VA Medicaid Overview
VA Benefit Information System Welcome and Introduction
Information for this topic was drawn from Chapter M07 of the Department of Social Services (DSS) Medicaid Manual.
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