Louisiana Medicaid Eligibility Manual Eligibility Factors
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I-1530 NEED – SSI-RELATED INCOME
I-1531 INCOME UNIT
The income unit is the individual or group of individuals whose income
must be considered in determining eligibility.
The income unit must include the:
• Applicant/beneficiary,
• Spouse living in the home, except in LTC and HCBS programs,
and
• Parent(s) living in the home, when the applicant is a minor.
Exception:
If a child is an intellectually or developmentally disabled applicant
coming from a non-institutionalized setting, include the parent(s) living
in the home in the income unit the first calendar month of Medicaid
approved participation only. Refer to H-900 Home and Community
Based Services.
If the applicant lives with a spouse who is an SSI beneficiary, include
the SSI beneficiary in the income unit but do not count the beneficiary's
SSI income.
I-1532 POTENTIAL INCOME (Applying for Other Benefits)
If the applicant/beneficiary is eligible for other benefits, s/he must apply
for and accept those benefits.
Count as though received any benefits for which the
applicant/beneficiary may be entitled but refuses to apply for or
receive, except when the individual presents evidence of good cause.
Consider each request for a good cause exception. Good cause is
present when:
• The applicant/beneficiary is mentally or physically incapable of
filing for benefits and does not have an authorized
representative to act on their behalf,
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• Death or serious illness in the applicant/beneficiary’s family,
• Transportation problems,
• The applicant/beneficiary had previously filed and was denied
benefits for reasons that have not changed, or
• There is a delay in payment for reasons, which are beyond the
applicant/beneficiary’s control.
If the applicant/beneficiary is eligible for a benefit but chooses not to
receive the benefit:
• Verify the amount of the benefit available, and
• Budget that amount as though actually received when
determining eligibility and, if LTC, patient liability.
Exception:
If an individual has a life insurance policy which allows him/her to
receive their death benefit while living, and the individual meets the
insurance company's requirements for receiving such proceeds,
s/he is not required to file for such proceeds.
If unable to determine the amount of benefits available because of the
applicant/beneficiary inability or refusal to cooperate, refer to G-1100
Cooperation.
Referrals
Refer applicants/beneficiaries for the following benefits and follow up
after referral as appropriate:
• Retirement Survival Disability Income (RSDI)
Refer applicants/beneficiaries who are potentially eligible to
SSA.
• Veterans Administration (VA) Aid and Attendance Benefits
Refer all veterans, veterans' widows, and eligible parents of
veterans to the Parish Office of Veterans Affairs for possible
benefits when HCBS services begin or upon entry into an LTC
facility.
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• VA Pension Assistance
Refer veterans potentially eligible for a pension to the Parish
Office of Veterans Affairs. The VA Office will also explore
eligibility for improved VA pension assistance.
Note:
SSI is not considered potential income. An applicant/beneficiary is not
required to apply for SSI benefits.
I-1533 RESERVED
I-1534 TYPES OF INCOME (SSI-Related)
Begin with gross income when determining eligibility.
Income exclusions are listed when exclusion is allowable for that type
of income. The programs for which the exclusion is allowed are also
noted. If no exclusion is listed, none shall be given.
For LTC cases, all income counted is used in determining eligibility and
patient liability unless otherwise indicated.
ADOPTION SUBSIDY
State General Funds
Do not count as income to the child.
State-funded subsidies are counted as unearned income to the
adoptive parent(s).
Title IV-E
Do not count as income to the adoptive parent(s).
Count as unearned income to the adopted child.
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Note:
Adoption subsidy payments made to the adoptive parents are
based on the social, emotional, and medical needs of the child, and
are not based on the financial need of adopting parents.
AGENT ORANGE SETTLEMENT PAYMENTS
Do not count any payments made from the Agent Orange Settlement
Fund or any other fund established as a result of a settlement in the
Agent Orange Product Liability Litigation.
Do not count any interest earned on these payments as income in the
month of receipt, but as a resource the following month.
AGRICULTURE AND STABILIZATION/CONSERVATION PAYMENTS
Count as unearned income.
NON-CITIZEN SPONSOR'S INCOME
Count income deemed from the Non-citizen Sponsor as unearned
income. Refer to I-1424.2 Sponsor to Non-Citizen Deeming.
Consider the income of the sponsor and of their legal or non-legal
spouse living with them.
Sponsor to Non-citizen deeming is applicable for three years,
beginning with the month that the Bureau of Citizenship and
Immigration Services (BCIS) grants permanent resident status.
Do not apply sponsor-to- Non-citizen deeming in the following
situations:
• The applicant/beneficiary becomes ill or disabled after the date
of entry into the United States. This situation applies to an
applicant/beneficiary in the A category, as well as in D category
and B category.
• The Non-citizen is a permanent resident under color of law.
• The sponsor is an organization.
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• The Non-citizen's sponsor is his/her spouse and the
sponsor/spouse is eligible for SSI. Treat as an eligible couple.
ALIMONY
Count any court-ordered alimony received as unearned income.
Voluntary alimony or support received is considered a contribution.
ANNUITY
Count as unearned income.
ASSISTANCE BASED ON NEED
Do not count assistance based on need.
Assistance based on need is assistance:
• Provided under a program which uses income as a factor of
eligibility, and
• Funded completely by a state, a political subdivision of a state,
or a combination of such jurisdictions.
Note:
If a program uses income to determine payment amount but not
eligibility, it is not assistance based on need.
Refer to Income Based on Need.
BLACK LUNG DISEASE BENEFITS
Count as unearned income.
CAPITAL GAINS DISTRIBUTIONS
Count as unearned income.
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CASH AND IN-KIND REPLACEMENT ITEMS
Do not count cash and in-kind items that are received from any
sources for the replacement or repair of lost, damaged, or stolen
excluded resources.
Note:
Do not count the interest earned on this cash during the period it is
excluded as a resource. Refer to I-1630, Need – SSI-Related
Resources.
CENSUS BUREAU EARNINGS
Do not count earnings from the temporary employment of individuals
by the Census Bureau in conducting Census activities.
CHILD CARE FOOD PROGRAM PAYMENTS
Count as earned income from self-employment payments received for
providing meals to children in day care.
The costs of purchasing, preparing, and serving the meals are
considered deductible business expenses.
CHILD SUPPORT
Count as unearned income to the child any court-ordered or voluntary
child support.
Exclude one third of court-ordered child support payments in a child’s
SSI-related MNP case.
Note:
When deeming income, the one-third child support disregard is not
applicable when calculating income of an ineligible child.
In LTC, do not exclude the one-third child support disregard in
eligibility determination or PLI determination.
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COMMISSIONS
Refer to Wages, Salaries and Commissions.
COMMUNITY SPOUSE'S ALLOCATED INCOME
Count as unearned income to the community spouse any income
allocated from an institutionalized spouse, in addition to their own
earned and unearned income.
CONTRACTUAL INCOME
Count as earned income in the month of receipt money received under
an implied, oral, or written contract for services or goods.
CONTRIBUTIONS
Count as unearned income.
A contribution may be:
• In cash, or
• In-kind for the purpose of meeting basic needs.
CONTRIBUTIONS FROM TAX-EXEMPT ORGANIZATIONS
Do not count the following gifts, made on or after October 28, 1996,
from tax-exempt organizations, such as the Make-A-Wish Foundation,
to children under age 18 who have a life-threatening condition.
• Any in-kind gift, not converted to cash; and
• A cash gift to the extent that the total cash excluded under this
provision does not exceed $2,000 in any calendar year. Cash in
excess of $2,000 received in a calendar year is subject to
regular income counting rules.
If an in-kind gift is converted to cash, the cash is counted as income in
the month converted.
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Count interest paid on unspent portion as unearned income in the
month of receipt and as a resource the following month.
DEATH BENEFITS
Count as unearned income that portion of the benefit that exceeds
expenses.
A death benefit is a benefit other than life insurance received as the
result of another individual's death.
Examples of death benefits include:
• Death benefits from labor unions,
• Death benefits from SSA or Railroad Retirement paid to the:
– legal or non-legal spouse who was living with the
individual, or
– the spouse or child receiving RSDI or Railroad
Retirement benefits from the individual's record.
• Veterans Administration burial benefits, and
• Cash given by relatives, friends, or a community group (e.g.,
benevolent society) to assist with expenses related to the death.
Exclude that portion of death benefits which is used to pay expenses
for the deceased person's last illness and burial.
Note:
Recurring survivor benefits (e.g., those received under RSDI or
private pension programs) are not death benefits. Therefore,
expenses of last illness and burial cannot be deducted from these
benefits.
Last illness and burial expenses include:
• Related hospital and medical expenses,
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• Funeral, burial plot, and interment expenses, and
• Other related expenses.
Verify all last illness and burial expenses. If an expense has been
incurred but not paid, assume that the applicant/beneficiary will pay the
expense from the death benefits.
Note:
Count as a resource any part of the death benefit that the
applicant/beneficiary has not spent by the first day of the second
month after the month of receipt.
Verify the amount of death benefits received by a statement from the
payor of the benefit.
Accept the applicant/beneficiary's statement as to the amount of cash
given by relatives, friends, or community groups.
DISABILITY PAYMENTS
Count as unearned income.
Exception:
Do not count credit disability insurance payments made directly to a
loan or mortgage company.
Refer to Sick Pay.
DISASTER ASSISTANCE
Do not count federal assistance received as a result of a federally
declared natural disaster.
Exclude as income and resources interest paid on unspent portion.
Assistance from ‘The Road Home Program’ is considered disaster
assistance, as it is 100% federally funded and a result of a
presidentially declared disaster.
Many types of Pandemic-related assistance under the Coronavirus
Aid, Relief, and Economic Security Act (CARES ACT), the
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Consolidated Appropriations Act (CAA), and the American Rescue
Plan Act (ARPA) are considered disaster assistance and will be
permanently disregarded for SSI-related income and resources for all
individuals involved in computation of benefits. The Pandemic-related
assistance meeting criteria for disaster assistance exclusions are:
• Economic Impact Payments
• All Unemployment Benefits (regular and pandemic) during the
pandemic period,
• Paycheck Protection Program
• Economic Injury Disaster Loan Program
• Tribal Payments from the Coronavirus State and Local Fiscal
Recovery fund
• State Stimulus Payments
• Covid-19 Funeral Assistance
• Emergency Rental Assistance
• Emergency Assistance for Rural Housing Assistance
• Homeowner Assistance Fund
• Housing Assistance and Supportive Services Programs for
Native Americans
• Higher Education Emergency Relief Fund
• Supporting Foster Youth and Families during the Pandemic
• COVID-19 Veteran Rapid Restraining Assistance Program
• Emergency Assistance to Children and Families through the
Pandemic Emergency Assistance Fund
• Coronavirus Food Assistance Program-Direct Payments to
Farmers and Ranchers
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• Farm Loan Assistance for Socially Disadvantaged Farmers and
Ranchers
• USDA Assistance and Support for Socially Disadvantaged
Farmers, Ranchers, Forest Land Owners and Operators, and
Groups.
• Chicago Resilient Communities Cash Assistance Pilot
DIVIDENDS
Do not count as income in the month of receipt. Count as a resource
the month following the month of receipt. This applies to all dividends.
Note:
Dividends paid on a life insurance policy that are left in the custody
of the insurer to accumulate interest are considered a resource.
Do not count interest paid on dividends as income in the month of
receipt, but as a resource the following month.
DOMESTIC VOLUNTEER SERVICE ACT
Do not count.
Examples of these types of payments are reimbursements to individual
volunteers serving:
• As foster grandparents,
• As senior health aides,
• As senior health companions,
• In SCORE, ACE, VISTA, or
• In any other program under Titles I, II, and III of P.L.93-113.
DONATIONS OR GIFTS
Count as unearned income to the individual a donation of cash or real
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property.
To be a donation, an item must:
• Be given irrevocably,
• Not be compensation or return for services, and
• Be given without legal obligation on the part of the donor.
A donation may be:
• In cash, or
• In-kind for the purpose of meeting basic needs.
A donation or gift received as the result of a death is considered a
death benefit. Refer to Death Benefits.
EARNED INCOME CREDITS (EIC)
Do not count EIC tax payments received either as advances or as
refunds.
Count interest paid on unspent portion as unearned income in the
month of receipt and as a resource the following month.
ECONOMIC IMPACT PAYMENT
Refer to Disaster Assistance.
EDUCATIONAL ASSISTANCE (GRANTS, SCHOLARSHIPS,
FELLOWSHIPS, GIFTS)
Effective June 1, 2004, any portion of a grant, scholarship, fellowship,
or gift used for paying tuition, fees, or other necessary educational
expenses at any educational institution, including vocational or
technical, is excluded from income. Any portion of such assistance not
used to pay for education but will be used for an educational expense
at a future date is excluded from income in the month of receipt. This
exclusion does not apply to any portion set aside or actually used for
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food, clothing, or shelter. See Z-100 Maximum SSI Student Child
Earned Income Exclusion Amounts.
Educational expenses include laboratory fees, student activity fees,
transportation, stationery supplies, books, technology fees, and
impairment-related expenses necessary to attend school or perform
schoolwork.
Any portion of assistance not used or not set aside for paying tuition,
fees, or other necessary educational expenses is income in the month
received and a resource the month after the month of receipt. See
I-1634 Earned Income Tax Credits (EITC) and Child Tax Credits (CTC)
for treatment as a resource.
If a portion of the funds that have been set aside to pay for future
expenses is used for some other purpose, the funds are income at the
earliest of the following points: in the month that it is spent, or the
month the individual no longer intends to use the funds for education.
Exception:
Do not count any student financial assistance provided under Title
IV of the Higher Education Act of 1965 or Bureau of Indian Affairs
regardless of use. There is no time limit on the exclusion.
Do not count as income any interest or dividends paid on unspent
educational assistance. However, any interest or dividends paid on
unspent funds not intended to be used for education is counted as
unearned income in month of receipt.
ENERGY ASSISTANCE
Do not count utility supplement payments made from Department of
Housing and Urban Development (HUD), local housing authorities, or
governmental housing programs, whether they are in the form of cash,
in kind, or vendor payment.
Count as unearned income any other payments made directly to the
beneficiary.
FELLOWSHIPS
Refer to Educational Assistance.
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FOSTER CARE PAYMENTS
Count the part of the payment provided to meet the needs of the foster
child as unearned income to the foster child.
Do not allow the $20 disregard because foster care payments are
based on the need of the child.
Count any part of the payment meant for the foster care provider's own
personal use (such as service or incentive pay) as unearned income to
the foster care provider.
Note:
Contact the payor of the benefit to obtain the breakdown of the
payment into the child's portion and the provider's portion.
GRANTS
Refer to Educational Assistance.
HOME PRODUCE FOR PERSONAL CONSUMPTION
Do not count.
HOUSING ASSISTANCE PAYMENTS
If the applicant/beneficiary is the renter, do not count:
• HUD Community Development Block Grant Funds,
• HUD payments or subsidies, or
• Government housing subsidies.
Count as unearned income housing assistance payments to the
applicant/beneficiary if s/he is the property owner.
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INCOME BASED ON NEED
Count income based on need as unearned income unless it is totally
excluded by statute. Do not apply the $20 general income exclusion.
Income based on need is assistance:
• Provided under a program which uses income as a factor of
eligibility, and
• Funded completely or partially by the federal government or by
a non-government agency for the purpose of meeting basic
needs.
Refer to Assistance Based on Need.
INCOME TAX REFUNDS AND CREDITS
Do not count Federal or State tax refunds or advance tax credits as
income.
Note:
All Federal tax refunds and advance tax credits are excluded from
being counted toward resources for 12 months after receipt.
INDEMNITY MEDICAL INSURANCE BENEFITS (INCOME
REPLACEMENT POLICIES)
Count benefit payments from these policies as unearned income.
Types of policies:
• Cash replacement policies, and
• Indemnity insurance policies.
These policies:
• May pay to the insured specified benefits for each day of
confinement, and
• Are not a medical insurance (third party liability resource).
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INDIAN FISHING RIGHTS INCOME
Income derived by a member of an Indian tribe from the exercise of
recognized fishing rights (i.e., secured as of March 17, 1988, by a
treaty, Executive Order, or an Act of Congress) is counted as unearned
income in the month of receipt.
INDIAN RELATED PAYMENTS
Count per capita distribution of gaming operations/casino revenue as
unearned income.
To determine whether certain Indian related payments are excludable,
the applicant shall provide documentation of the purpose of the
payment, including reference to the applicable federal statute that
provides for the payment or the alleged SSI income/resource
exclusion.
INDIVIDUAL AND FAMILY GRANT ASSISTANCE
Do not count.
INHERITANCE
Inheritance is cash, a right, or a non-cash item(s) received as the result
of someone's death.
Consider an inheritance as income in the month received. Receipt is
deemed to be the day of death in the case of a direct descendant, or
when there is an uncontested will designating the individual as the
beneficiary.
Refer to Death Benefit.
IN-KIND INCOME
In-kind income is third party noncash payments that are not a basic
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need (food and/or shelter), but can be sold or converted by an
individual to meet their basic needs. See In-Kind Support and
Maintenance for payments that are food or shelter.
Count payments made directly to an individual for meeting basic needs
as unearned income.
Count in-kind payments made in lieu of cash wages as earned income,
except when made to agricultural or domestic employees, which are
not counted. Count maintenance obligation on rent-free shelter as
self-employment income in-kind.
Exceptions:
Do not count in-kind contributions used to supplement the personal
care needs of an LTC beneficiary.
Do not count in-kind income to individuals receiving Long Term
Care throughout a month:
Example:
When an individual has contracted to purchase an automobile
or a home and his/her son is making the payments on their
behalf, the payment is not considered in-kind income.
Refer to In-Kind Support and Maintenance when there is any
question whether a third party payment is in-kind income or in-kind
support and maintenance.
The value of in-kind income is determined by the fair market value at
the time of receipt.
IN-KIND SUPPORT AND MAINTENANCE (ISM)
In-kind Support and Maintenance (ISM) are third party payments that
result directly in an individual's fulfillment of a basic need (food and/or
shelter).
Count as unearned income.
Exception:
Do not count ISM in determining eligibility for Act-421 CMO, MNP,
MPP, QMB, SLMB, QI, and TB individuals.
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Presumed Maximum Value
When determining the value of in-kind support and maintenance,
presume that the value is not more than an amount equal to one-
third of the appropriate SSI standard payment plus $20.
The individual should be advised of their right to rebut the
presumed maximum value and establish actual value. The amount
of in-kind support and maintenance to be counted is the lesser of:
• The presumed maximum value, or
• The established actual value.
INSURANCE PAYMENTS
Refer to Cash and In-Kind Replacement Items.
INTEREST
Do not count. Unless otherwise noted, interest retained after the
month of receipt is a countable resource.
Exception:
Count as unearned income in the month of receipt interest paid on
unspent portions of the following:
• Advance Earned Income Tax Credit
• Child Tax Credits
• Earned Income Tax Credits
• Contributions from Tax-exempt Organizations
• Relocation Assistance
• Title II and Title XVI Retroactive Payments
• Victim’s Compensation
• Educational Assistance not used for education
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Also, count interest:
• Paid on non-excluded burial funds,
• Paid on excluded burial funds when the interest is not left to
accumulate, and
• Paid on mortgages and promissory notes
Month of Receipt
The month of receipt is the month in which the interest is:
• Actually received,
• Credited to the applicant/beneficiary’s account and available for
use, or
• Set aside for the applicant/beneficiary’s use.
IRREGULAR OR INFREQUENT INCOME
Count irregular or infrequent income in the month of receipt according
to the particular type of income.
Examples of irregular or infrequent income are lease arrangements for
mineral and surface rights, mineral rights, and royalties.
Irregular or Infrequent Income Exclusion
Income that is received either infrequently or irregularly may be
excluded from any type case, provided the total of such income does
not exceed $30 per quarter for earned income and/or $60 per quarter
for unearned income.
In order for this exclusion to apply, income need only be one or the
other of:
• Infrequent - income received no more than once in a calendar
quarter from a single source; or
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• Irregular - income not reasonably expected
Winnings from Gambling, Lottery and Other Prizes
Count as unearned income in the month of receipt.
Note:
Gambling losses are not subtracted from gambling winnings when
determining an applicant/beneficiary's countable income. If an
individual claims gambling as a profession and files tax returns to
that effect, consider as self-employment.
If an individual is offered a choice between an in-kind item and cash,
the amount of cash offered is counted regardless of which one the
individual chooses or the value of the in-kind item.
JOB TRAINING PARTNERSHIP ACT (JTPA)
Count earnings from JTPA as earned income.
LEASE ARRANGEMENTS FOR MINERAL AND SURFACE RIGHTS
Count as unearned income in the month of receipt.
Lease arrangements include gas, oil, timber, gravel, and land use
leases.
Note:
Use net income when the difference between gross and net in oil
royalties is for payment of severance tax.
LIFE INSURANCE
Count money received by the beneficiary at the death of the insured.
Exception:
For spouses and parents of the deceased, the expenses of last
illness and burial are deducted from the lump sum.
Do not count money received from cashing in a life insurance policy as
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it is considered conversion of a resource.
Count accelerated life insurance payments made for certain ill policy
holders as income in the month of receipt. The receipt of accelerated
payments is not treated as a conversion of a resource because the
policy holder is receiving the proceeds from the policy and not the
policy's cash surrender value.
Do not count as potential income if accelerated payments are available
to an applicant/beneficiary and he chooses not to apply for them.
LOANS
Do not count income received as the result of valid loan agreements.
A loan is a transaction:
• This is not an in-kind payment,
• For which a valid loan agreement exists, and
• In which:
– one party advances money or services to another party,
– the other party (borrower) at the time of the loan or the
beginning of the services promises to repay the debt in
full within a specified period of time which must be within
his /her lifetime, and
– neither party to the agreement is a minor or has been
declared legally incompetent.
A valid loan agreement can be written or oral. Oral loans that meet the
above criteria are legally binding under Louisiana law.
A written loan agreement must meet the following conditions:
• The borrower's acknowledgment of an obligation to repay (with
or without interest),
• A timetable for repayment, and
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• A realistic plan for repayment (e.g., borrower plans to repay the
loan when he receives anticipated income).
Verification of an oral agreement must include:
• Signed statements from both parties giving a description of the
loan agreement. Compare the statements to see if they have
agreed as to:
– the amount of the loan,
– the timetable for repayment, and
– the amount of the payments.
• The signed statement of the borrower acknowledging their
current intent to comply with the loan agreement described
above.
An oral agreement cannot include a minor or a person who has been
declared legally incompetent.
LONG-TERM CARE (LTC) INSURANCE POLICY PAYMENTS
Count as unearned income in month of receipt any policy benefits
paid directly to the beneficiary while a beneficiary is receiving
Medicaid payment of LTC services.
LUMP SUM PAYMENTS
SSI
Do not count.
RSDI
Count as unearned income in the month of receipt.
VA Aid and/Attendance
Do not count.
Exception:
Count as unearned income in the month of receipt when
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determining:
• LTC/HCBS patient liability, and
• MNP spend-down.
Workers’ Compensation
Count as unearned income in the month of receipt less any portion of
the Workers’ Compensation award or payment that the authorizing or
paying agency designates for medical expenses, legal expenses, or
other expenses attributable to obtaining the WC award. The expenses
may be past, current, or future. The WC payments designated for such
expenses may be received in a lump sum or as a continuing payment.
Note:
There is no resource exclusion that applies specifically to WC
payments that have been deducted from income. Resource rules
apply to WC payments retained after the month of receipt.
Other Types
Count as unearned income in the month of receipt.
Note:
Refer to I-1630 Need - SSI-Related Resources, Lump Sum
Payments, for lump sums retained after the month of receipt.
MIGRANT WORKER INCOME
Count as earned income.
MILITARY PAY AND ALLOWANCES
Count as earned income:
• Military pay,
• Allowances for quarters, housing, and food,
• Base pay, and
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• Flight pay.
Count allotments for dependents as unearned income.
MINERAL RIGHTS
Count income from mineral rights as unearned income in the month of
receipt.
Refer to I-1630 Need - SSI-Related Resources, Property.
MORTGAGES AND PROMISSORY NOTES
Count as unearned income interest payments received on mortgages
and promissory notes.
The portion of the payment received which represents repayment of
the principal is not counted as income. It is counted as a resource that
is converted from one form to another. Refer to I-1630 Need – SSI-
Related Resources, Mortgages and Promissory Notes.
See also Reverse Mortgages and Reverse Annuity Mortgages.
PENSIONS AND ANNUITIES
Count the total pension or annuity as unearned income in the month of
receipt.
RADIATION EXPOSURE COMPENSATION PAYMENTS
Do not count payments made to persons through the Radiation
Exposure Compensation Act enacted October 15, 1990, or the
Radiation Exposure Compensation Amendments of 2000, which was
enacted on July 10, 2000.
RAILROAD RETIREMENT BENEFITS
Count as unearned income the gross benefits amount of entitlement.
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Retirement benefits are payable only to the railroad employee and the
spouse of the employee, not to children. Benefits may be increased
because of dependent children. The increase is income to the
employee, not the child.
RECOUPMENTS
Count as unearned income any portion of a benefit that is being
recouped to repay prior overpayments (e.g., RSDI, Railroad
Retirement.)
REIMBURSEMENTS
Do not count.
Exception:
For determining patient liability in LTC cases, count as unearned
income reimbursements for previously budgeted deductions (e.g.,
medical insurance premiums).
RELOCATION ASSISTANCE
Do not count any assistance received under Title II of the Uniform
Relocation Assistance and Real Property Acquisitions Policies Act of
1970.
Do not count any funds received from May 1, 1991 through May 1,
1994 as state or local government relocation assistance.
RENTAL PROPERTY INCOME
Count as unearned income if the applicant/beneficiary does not
perform any work activity related to the property such as maintenance
and yard work.
Count as earned income if the owner of the income is in the business
of renting property. Refer to Self-Employment.
Note:
In LTC cases, count rental income as unearned income.
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Budget gross rental income minus allowable costs of production that
are paid during the budget month. Allowable costs of production
include but are not limited to:
• Property taxes,
• Insurance,
• Interest payments on mortgages,
• Incidental repairs that are minor repairs to an existing structure,
such as replacing a leaky faucet,
• Maintenance, such as lawn mowing or housekeeping,
• Curator fees, and
• Management (realtor) fees.
Do not deduct capital expenditures that are expenses for an addition or
increase in the value of property, which is subject to depreciation for
income tax purposes.
Do not consider rent received or expenses paid in months prior to
Medicaid eligibility.
Determine gross rent received and deductible expenses
month-by-month.
Subtract deductible expenses paid in a month from gross rent received
in the same month.
If deductible expenses paid in a month exceed the gross rent, subtract
the excess expenses from the next month's gross rent and continue
doing this as long as necessary until the end of the tax year in which
the expense was paid.
Note:
Do not carry excess expenses over to other tax years or use them
to offset other income.
When only a portion of the property is rented, prorate the allowable
costs of production for that portion which is rented.
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If the applicant/beneficiary as Landlord pays for utilities, average the
cost for a year and deduct the pro rata share from the monthly rent as
an allowable expense.
REPARATION PAYMENTS
Do not count as income reparation payments received from the
Republic of Germany, the Austrian General Social Insurance Act, the
Nazi Persecution Victims Eligibility Act, or Netherlands WUV
payments.
Do not count any interest earned from the unspent portion of these
payments as income in the month of receipt, but as a resource the
following month.
Accept the applicant/beneficiary statement of the amount and date
received.
RESTITUTION PAYMENTS
Do not count restitution payments made by the U.S. government to
individual Japanese-Americans (or their survivors) or to Aleuts who
were interned or relocated during World War II.
Do not count any interest earned from these payments as income in
the month of receipt, but as a resource the following month.
RETIREMENT BENEFITS
Count the total gross amount of retirement benefits as unearned
income.
REVERSE ANNUITY MORTGAGES
A reverse mortgage arrangement involving the purchase of an annuity
is a Reverse Annuity Mortgage (RAM). Count payments from a
reverse annuity mortgage as unearned income.
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REVERSE MORTGAGES (AKA HOME EQUITY CONVERSION
MORTGAGES)
Reverse mortgages are plans which allow homeowners to borrow, via
a mortgage contract, some percentage of the appraised value of their
home as long as it is occupied as their primary residence.
Homeowners retain ownership of the home and receive periodic
payments (or a line of credit) up to the specified amount. Reverse
mortgages are due and repaid when the last surviving borrower dies,
sells the home or permanently moves out.
Permanently moves out generally means the homeowner has not lived
in the home for twelve consecutive months. There may be other
“conditions of default” written into the agreement by the lender which
also cause the loan to become due.
Do not count payments received from a Reverse Mortgage. These
payments are considered loan proceeds. Unspent portions of the
payments become a resource the month following receipt.
See also Reverse Annuity Mortgages.
ROYALTIES
Refer to Lease Arrangements for Mineral and Surface Rights for
royalties paid to the owner of a mine, oil well, timber tract, or other
resource.
Count as earned income any royalties earned in connection with the
publication of a person's work and any honorarium received for
services rendered.
S-CORPORATIONS
An S-Corporation is a legal small business corporation in which the
shareholders may elect to be an employee of the corporation and be
paid wages. They may also receive dividend payments on their
investments.
Employees of an S-Corporation are not considered self-employed.
Their monthly income received is budgeted as earned income.
Dividends paid on capital investments are not considered earnings.
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SALARIES
Refer to Wages, Salaries, and Commissions.
SCHOLARSHIPS
Refer to Educational Assistance.
SEASONAL EARNINGS
Count as earned income in the month received.
If contractual, such as a bus driver or teacher, prorate the earned
income over the period it is intended to cover.
If earnings are self-employment seasonal income, refer to Self-
Employment Earnings.
SELF-EMPLOYMENT EARNINGS
Count net earnings as earned income.
To determine net earnings, first determine gross earnings.
If personal and business funds are commingled in an account,
withdrawals from the account for personal use are counted as net
earned income. Any income withdrawn that cannot be documented
specifically for business expenses shall be considered for personal
use.
Count the distributive share (whether or not distributed or received) as
net earned income, if the business is a partnership.
Acceptable verification of gross earnings and deductions in order of
preference are:
• Applicant's income tax return for the previous calendar year
(including all schedule attachments such as Schedule C, Profit
or Loss from Business, necessary to determine gross earnings
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and allowable business expenses),
• Business records, and
• Applicant's signed statement of income and deductions, only if
no other verification is available and only for the initial eligibility
determination.
Yearly income and deductions (even if seasonal) from a tax return are
divided equally among the months in the tax year to determine monthly
income.
When the applicant's statement is used, advise the applicant that
business records for income tax purposes must be maintained and
presented for future determinations (renewals or reapplications).
Deduct the following business expenses allowable by the Internal
Revenue Service to obtain net earned income:
• The applicant's statement concerning the amount of the
following expenses may be accepted:
– advertising,
– car and truck expenses,
– commissions,
– freight,
– laundry and cleaning,
– office expenses,
– repairs, and
– supplies.
• The applicant's statement is not acceptable for the following
expenses because these expenses can be documented by the
business or institution to which it was paid:
– bad debts from sales or services,
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– bank services,
– depletion,
– depreciation,
– dues and publications,
– employee benefit programs,
– insurance,
– interest on mortgages,
– legal and professional services,
– pension and profit-sharing plans,
– rent on business property,
– taxes,
– travel, meals, and entertainment,
– utilities and telephone, and
– wages.
Exclude from income the following work expenses of the blind:
• FICA,
• Federal income taxes,
• State income taxes,
• Transportation,
• Lunches, and
• Seeing-eye dog.
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Note:
Persons meeting LTC medical certification requirements generally
will not be able to engage in any self-employment activity. In some
cases, however, employment is recommended as a therapeutic or
rehabilitative measure.
SENIOR COMMUNITY SERVICE EMPLOYMENT PROGRAM (SCSEP)
A wage or salary paid under Chapter 35 of Title 42 of the U.S. Code,
Programs for Older Americans, is earned income.
Anything provided under Chapter 35 of Title 42 of the U.S. Code,
Program for Older Americans, other than a wage or salary is excluded
from income.
SHELTERED WORKSHOP EARNINGS
Refer to Wages, Salaries, and Commissions.
SICK PAY
Sick pay is a payment made to or on behalf of an employee by an
employer or a private third party for sickness or accident disability.
Sick pay is counted as either earned or unearned income, depending
on when the pay is received and whether or not it is attributable to the
employee's own contribution as follows.
Note:
Sick pay paid to an LTC beneficiary can only be considered as
wages if the employment is part of the approved plan of care.
Refer to I-1536.
Attributable to
Employee's Own
When Received Contribution? Type of Income
More than 6 months N/A Unearned Income
after stopping work
Within 6 months after No Wages
stopping work Yes Unearned Income
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To determine the 6-month period after stopping work:
• Begin with the first day of non-work.
• Include the remainder of the calendar month in which work
stops.
• Include the next 6 full calendar months.
SOCIAL SECURITY RETIREMENT, SURVIVORS AND DISABILITY
INSURANCE BENEFITS (RSDI)
Count as unearned income the gross amount of the entitlement,
regardless of recoupments for a prior overpayment or deductions for
Medicare Parts A or B.
Count the net amount of the benefit received plus the Medicare Part B
and Part D premiums withheld when the monthly benefit payment has
been reduced due to a Workers’ Compensation offset.
SPOUSAL IMPOVERISHMENT ALLOCATED INCOME
Count as unearned income to a community spouse/dependent, money
allocated by an LTC/HCBS beneficiary as defined in I-1537, Spousal
Impoverishment Income Provisions.
STUDENT EARNINGS
Count as earned income for a child who is subject to the SSI Child
Earned Income Exclusion:
• A student regularly attending school,
• Blind or disabled, and
• Under age 22,
Refer to Z-100 Maximum SSI Student Child Earned Income Exclusion
Amounts for maximum exclusion amounts.
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Apply exclusion consecutively to months in which there is earned
income until yearly exclusion is exhausted.
Do not count earnings received prior to the month of eligibility toward
the yearly limit.
This is in addition to the SSI Standard Deduction and Earned Income
Exemption.
SUPPLEMENTAL SECURITY INCOME (SSI)
Do not count.
Patient Liability Determination
Refer to I-1538 Patient Liability-Post Eligibility Treatment of
Income (PETI)
**
TRUST INCOME AND TUTORSHIP FUNDS
Inaccessible Trusts
Count as unearned income trust distributions, which are or could be
made to the applicant/beneficiary or on their behalf by the trustee.
Do not count as income interest or dividend payments.
Count food, clothing, or shelter received as a result of disbursements
from the trust as in-kind support and maintenance and valued under
the presumed maximum (PMV) rule as unearned income.
Do not count trust funds paid to a provider of medical services for care
rendered to the individual.
Accessible Trusts
Do not count as income trust dividends or interest, which are received
or are constructively received according to the terms of the trust.
Do not count withdrawals as income because the principal has been
counted as a resource.
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UNDIVIDED ESTATE INCOME
When property is part of an undivided estate, in which the
applicant/beneficiary has an interest:
• Determine his/her share of the income from the property
according to their pro rata share in the resource, and
• Apply the policy set forth in this section for the type of income.
Examine and verify the ownership of property to determine the
applicant/beneficiary's share of the undivided estate and whether or
not succession has been opened.
UNEMPLOYMENT COMPENSATION BENEFITS (UCB)
Count as unearned income in the month of receipt.
Note: During the pandemic period, do not count regular and
Pandemic Unemployment Assistance (PUA) in the SSI income
calculation. Refer to Disaster Assistance.
UNIFORM GIFTS TO MINORS AND UNIFORM TRANSFERS TO
MINORS ACT (UGMA/ATMA)
UTMA and UGMA accounts are taxable investment accounts set up by
a donor to benefit a minor, but controlled by an adult custodian until the
minor reaches their age of majority.
Donor: Additions to the principal that occur before a transfer may be
income to the donor. (Example: rental income received by donor then
moved to the minor’s fund would be considered rental income for
donor.)
Custodian: Additions to or income generated by the principal after a
transfer are not income to the custodian who has no right to use the
additions or income for his or her own support or maintenance.
Minor (under age 18)
• These accounts property, including additions or earnings, is not
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income to the minor;
• The custodian’s accounts disbursements to the minor are
income to the minor in month of disbursement and a resource
beginning the following month;
• The custodian’s account disbursements on behalf of the minor
may be treated as ISM if used to make certain third party vendor
payments for the minors support and maintenance.
Minor turns age 18:
• In the month the minor attains age 18, all the accounts property
becomes available to the individual and is subject to income
counting. The accounts property becomes subject to resource
counting the following month.
VENDOR PAYMENTS
Vendor payments are third party payments made directly to a creditor
or provider of a service.
Count vendor payments that are in-kind income or in-kind support and
maintenance. Refer to In-Kind Income and In-Kind Support and
Maintenance.
Do not count other vendor payments including Medicaid vendor
payments made on behalf of a beneficiary to a Medicaid provider.
VETERAN'S ADMINISTRATION (VA) BENEFITS
Count VA benefits as unearned income.
Exception:
Do not count VA Aid and Attendance or housebound allowances in
determining eligibility.
Count VA Aid and Attendance in determining LTC patient liability.
Exception:
Do not count the protected VA Improved Pension Reduction in
determining patient liability. It is protected as a part of the personal
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care needs allowance.
Do not allow the $20 disregard for VA pension.
Do not deem a VA pension because it is based on need or any income
received which was used to determine amount of pension.
Do not count a dependent's portion as income to the veteran or
widow(er) unless all the following conditions exist:
• The dependent lives apart from the veteran/surviving spouse;
and
• The dependent has applied to the VA for apportionment; and
• The dependent has received the VA's written denial of the
apportionment request, and
• The dependent has not received the augmentation directly from
the veteran/surviving spouse.
Do not count reimbursements for medical expenses.
Under 10 U.S.C. 1408, the spouse’s portion of the total VA retirement
benefit should not be counted as income to the Medicaid applicant if
the following conditions are met:
• There is a court order with respect to division of property of the
former spouses;
• The former spouses were married for at least 10 years; during
which,
• The member performed at least 10 years of creditable service in
the military,
If there is no documentation to prove the three requirements of
counting the spousal portion as separate property, the following
verifications should be acquired:
• Marriage license
• Judgment of Divorce
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• Judgment of Partition of Community property specifically
expressing the division of property in a dollar amount or as a
percentage of the disposable retirement pay belonging to the
former spouse pursuant to 10 USC 1408.
• Enrollment date in service
• Certificate of honorable discharge.
VA benefits include the following types of payments:
• VA compensation:
– is a payment based on a service-connected disability or
death, and
– may be paid to a veteran or survivor of the veteran.
• VA pension is a payment based on need.
• VA Improved Pension Assistance is a re-computation of pension
benefits that may result in a higher benefit amount.
• VA Aid and Attendance is an allowance to veterans, spouses of
disabled veterans, and surviving spouses who are in regular
need of the aid and attendance of another person or who are
housebound.
VA Aid and Attendance and housebound allowances are combined
with the individual's pension or compensation payment. Verify all VA
payments with VA to determine if Aid and Attendance or housebound
allowances are involved.
Note:
Failure of the beneficiary of VA benefits to return VA income
statements will result in VA termination.
If notified that VA benefits have terminated, contact VA to verify the
reason(s) for termination to determine whether to continue budgeting
the income as stated in Potential Income. If the termination was
caused by the failure of the applicant/beneficiary to comply with VA
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correspondence requirements, determine whether he was unable to
comply because of his physical or mental condition. If so, assist the
applicant/beneficiary in reinstating VA benefits. Do not report an
overpayment or underpayment. No patient liability adjustment is
necessary.
VICTIM'S COMPENSATION
Do not count payments received from a state-administered victim's
compensation fund.
Note:
A victim is not required to accept victim's compensation.
Count interest paid on unspent portion as unearned income in the
month of receipt and as a resource the following month.
WAGES, SALARIES, AND COMMISSIONS
Count gross wages, salaries, and commissions including paid sick and
vacation leave as earned income.
Persons meeting LTC medical certification requirements generally will
not be able to engage in any wage earning activity. In some cases,
however, employment is recommended as a therapeutic or
rehabilitative measure. When a question concerning medical
certification for such a case arises, send a summary of the situation to
the Health Standards Regional Office.
If earned income is reported for a SNF beneficiary, submit current
medical data and employment information to the Health Standards
Regional Office for a review of level of care.
WORKER'S COMPENSATION
Count the gross amount as unearned income.
Refer to Lump Sum Payments
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WORKERS’ COMPENSATION MEDICARE SET-ASIDE
ARRANGEMENT (WCMSA)
Count any interest earned on unspent portions as unearned income in
the month of receipt and as a resource the following month.
I-1535 NEED – SSI-RELATED - TREATMENT OF INCOME
I-1536 DEDUCTIONS
Medicaid deductions are determined:
• By the program,
• By the type of income, and
• According to whether the budget is the eligibility determination
or the LTC patient liability determination.
The specific order that must be used in allowing these deductions is
indicated below, followed by an alphabetical list of deductions and an
explanation of each.
Extended Medicaid, Retroactive Medicaid for SSI Applicants,
and Medicare Savings
1. Standard SSI Deduction
2. Earned Income Deduction
3. Remainder, if any, of the Standard SSI Deduction
MNP Spend-down
1. Standard SSI Deduction
2. Earned Income Deduction
3. Remainder, if any, of the Standard SSI Deduction
4. Health Insurance Premiums
5. Allowable Medical Bills
LTC Eligibility Determination
No deductions allowed
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LTC Patient Liability
1. Earned Income Deduction
2. Personal Needs Allowance **
3. Maintenance Needs of Community Spouse
4. Maintenance Needs of Family
a. Legal Dependents Living with a Community Spouse
b. Legal Dependents with no Community Spouse
5. Allowable Health Insurance Premiums, Deductibles, Co-
Insurance Charges and Copayments
6. Allowable Medical Bills
LTC Spend-down MNP Eligibility Determination
1. Standard SSI Deduction
2. Earned Income Deduction
3. Remainder, if any, of the standard deduction
4. MNIES
5. Allowable Medical Bills
LTC Spend-down MNP Patient Liability
1. Earned Income Deduction
2. Personal Needs Allowance **
3. Maintenance Needs of Community Spouse
4. Maintenance Needs of Family
a. Legal Dependents Living with a Community Spouse
b. Legal Dependents with no Community Spouse
5. Allowable Health Insurance Premiums, Deductibles, Co-
Insurance Charges and Copayments
6. Allowable Medical Bills
HCBS Eligibility Determination
No deductions allowed
HCBS Patient Liability
There is no PLI determination for HCBS beneficiaries with income
below the Special Income Level (SIL).
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HCBS Spend-down MNP Eligibility Determination (Community
Choices, Adult Day Health Care, Supports, ROW and NOW
only)
1. Standard SSI Deduction
2. Earned Income Deduction
3. Remainder, if any, of the standard deduction
4. MNIES
5. Allowable Medical Bills
HCBS Spend-down MNP Patient Liability (Community Choices,
Adult Day Health Care, Supports, ROW and NOW)
1. Earned Income Deduction
2. Basic Needs Allowance
3. Maintenance Needs of Community Spouse
4. Maintenance Needs of Family
a. Legal Dependents Living with a Community Spouse
b. Legal Dependents with no Community Spouse
5. Allowable Health Insurance Premiums, Deductibles, Co-
Insurance Charges and Copayments
6. Allowable Medical Bills
Allowable Medical Bills
This deduction applies to MNP Spend-down, ** LTC SD MNP,
Community Choices SD MNP, Adult Day Health Care SD MNP, Row
SD MNP, Supports SD MNP and NOW SD MNP eligibility
determinations.
Deductions for medical expenses may be allowed in LTC, LTC SD
MNP, Community Choices SD MNP, Adult Day Health Care SD MNP,
Row SD MNP, Supports SD MNP and NOW SD MNP post eligibility
patient liability determinations.
• Incurred expenses have to be dated no earlier than three
months preceding the month of application.
• For any changes, only account for expenses in the last three (3)
months prior to report date, with carryover if necessary.
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Basic Needs Allowance
See H-910.4 Beneficiary Liability (needs allowance is 3 x Federal
Benefit Rate (FBR) for all waivers).
For HCBS beneficiary liability determinations, deduct an allowance
equal to three times the SSI FBR.
Refer to Z-700 LTC/HCBS SIL Rate, Resource Limits and Personal
Care Needs Allowance.
Earned Income Exemption (EIE)
Deduct $65 and one-half of the remainder from gross earned income
for each individual or couple.
This deduction applies to:
• All programs except LTC in the eligibility determination, and
• LTC patient liability determinations, if the employment is part of
the approved plan of care. Refer to Sick Pay.
Note:
Many ICF/IID beneficiaries engage in wage earning activity as a part of
their plan of care and are eligible for the SSI earned income
deductions ($65 and one half of the remainder) in the patient liability
determination only.
Beneficiaries of ICF I and II services whose physician plan of care
prescribes a wage earning activity as a therapeutic or rehabilitative
measure shall be eligible for the SSI earned income deductions ($65
and one half of the remainder) in the patient liability determination only.
Garnishments
Unearned income includes amounts withheld from unearned income
because of a garnishment or to make certain other payments (such as
payment of Medicare premiums).
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Health Insurance Premiums, Deductibles, Co-insurance Charges and
Copayments
This deduction applies to:
• MNP eligibility determinations, and
• LTC and LTC/HCBS Spend-down MNP patient liability
determinations.
Deduct the verified monthly premium amount paid by the
applicant/beneficiary:
Note:
The premium must be paid by the applicant/beneficiary. It may NOT
be paid by the community spouse (i.e. deducted from spouse’s
earned/unearned income) or other third party.
• Medicare (shall be deducted first),
• Medical insurance, and
• Medical transportation insurance.
• LTC Partnership Insurance
Note:
In patient liability determinations, medical insurance premiums that
are paid quarterly, annually, etc. may be prorated monthly. For
Medically Needy LTC, refer to H-1011.5 Bills Allowed in the Spend-
Down Process.
Allowable medical insurance policies are those that relate payment to
the amount of expense incurred by paying either actual charges or
actual charges less a percentage.
Verify the monthly amount of medical transportation and medical
insurance premiums at application and renewal.
If the applicant/beneficiary does not provide adequate verification,
attempt to verify the premium by contacting the insurance company or
agent.
Do not allow a deduction if the premium amount cannot be verified or
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the time period the premium covers cannot be determined.
A canceled check is not adequate verification.
Do not allow deductions for premiums for:
• Income replacement policies,
• Accidental death and dismemberment policies, or
• Sick and accident policies.
Evaluate policies with combined coverage (i.e., those that provide
medical insurance and income replacement) to determine whether the
premium for the income replacement provision can be determined
separately.
If the premiums can be determined separately, deduct the medical
insurance portion of the premium.
If the premiums cannot be determined separately but the majority (over
50%) of policy provisions is allowable, deduct the total premium.
Maintenance Needs Allowance for Legal Dependents
For long term care facility patient liability determinations involving
Spousal Impoverishment Provisions only, deduct the allowance for
legal dependents of a long term facility care applicant/beneficiary living
with a long term facility care community spouse. Refer to I-1537.3,
Maintenance Needs **
For long term care facility patient liability determinations involving an
individual with legal dependents and no community spouse, deduct the
MNIES for the number of dependents. Refer to I-1537.3,
Maintenance Needs **
For HCBS Spend-down MNP patient liability determinations involving
an individual with legal dependents with or without a community
spouse, deduct the monthly MNIES for the number of dependents.
Maintenance Needs Allowance for Community Spouse
For long term care facility patient liability determinations involving
Spousal Impoverishment Provisions only, deduct the allowance for a
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long term care facility community spouse. Refer to I-1537.3,
Maintenance Needs **
For HCBS Spend-down MNP patient liability determinations involving
Spousal Impoverishment Provisions only deduct the MNIES.
Personal Care Needs
For long term care facility patient liability determinations only, deduct a
standard allowance to help cover the cost of personal care items not
covered by the facility fee.
**
Note:
The $90.00 VA Improved Pension may not be used to reduce the
Medicaid payment to the facility and does not replace the $38.00 PCN.
Refer to Z-700 LTC/HCBS SIL Rate, Resource Limits and Personal
Care Needs Allowance.
SSI Standard Deduction
Do not apply this deduction to:
LTC categorically needy eligibility or patient liability determinations, or
income based on need (e.g., AFDC payments, VA pensions).
For all other programs, including LTC/HCBS Spend-down MNP,
deduct $20 from monthly income not based on need for each:
• Individual, or
• Couple.
Deduct the $20 from unearned income first. Then deduct any unused
portion of the $20 from earned income.
I-1537 SPOUSAL IMPOVERISHMENT INCOME PROVISIONS
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I-1537.1 General Information
Apply these provisions only in the LTC patient liability determination for
an LTC/HCBS applicant/beneficiary who has a legal community
spouse. The legal community spouse is the legal spouse, who was
residing in the home with the applicant/beneficiary prior to
institutionalization, and who is currently in a non-institutionalized living
arrangement. Spousal Impoverishment applies if the spouses are not
residing in the same home due to medical reasons or due to
circumstances beyond their control. A person receiving home and
community based services is considered institutionalized for Medicaid
purposes.
There is no residence requirement for spousal impoverishment. The
legal spouse can live in another state or country and the LTC
applicant/beneficiary can have spousal impoverishment apply as long
as all other eligibility requirements are met.
Note:
Verify that the marriage is legal.
A legal dependent is a person who may be claimed as a dependent by
either member of the couple for income tax purposes under the
Internal Revenue Code. Legal dependents may be:
• A couple's minor or dependent child(ren),
• Parents, or
• Siblings.
Note:
For dependents not living with a community spouse, refer to I-1536,
Deductions, Maintenance Needs Allowance for Legal
Dependents.
The gross income of the applicant/beneficiary must be below the
individual SIL or the individual must be eligible under LTC/HCBS
Spend-down MNP guidelines before these provisions can be applied.
Refer to H-0000, Eligibility Determinations.
Note:
Never consider the income of the community spouse/legal
dependents at home in determining eligibility for an institutionalized
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individual.
Allow income to meet the needs of the legal spouse/dependents at
home only if:
• The applicant/beneficiary agrees to make the income available
to the spouse/dependent, and
• The spouse/dependent is willing to accept the income.
I-1537.2 Ownership of Income
Determine ownership of income for each spouse without regard to
community property laws. A spouse has:
• Full ownership of income paid in his/her name,
• Half ownership of income paid in the names of both spouses,
and
• Pro rata ownership of income paid in the names of either one or
both spouses and another individual.
I-1537.3 Maintenance Needs **
Spouse’s Maintenance Needs
Determine the Spousal/Child/Family Member Needs amount ** for an
applicant/beneficiary with a community spouse as follows:
• Total gross income (including VA Aid and Attendance) of the
applicant/beneficiary less earned income deductions, if
applicable.
• Total spouse's gross income including any countable interest
earned from allowable resources.
- Subtract spouse's income from the Spouse's
Maintenance Needs Standard. Refer to Z-800 Spousal
Impoverishment Maintenance Needs and Resource
Standards. The remainder, if any, is the spouse's
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maintenance needs allowance limit.
Note:
For HCBS Spend-down MNP applicants/beneficiaries,
subtract spouse’s income from the monthly MNIES.
The remainder, if any, is the spouse's maintenance
needs allowance limit.
Do not allocate more than the Maintenance Needs
Allowance limit. Refer to Table Z-800 Spousal
Impoverishment Maintenance Needs and Resource
Standards
- Dependent’s Maintenance Needs
- For each legal dependent living with a community
spouse: **
• Total the dependent’s gross income including any
countable interest paid on allowable resources.
• Subtract this income from the dependent's
Maintenance Needs Standard. Refer to Z-800
Spousal Impoverishment Maintenance Needs and
Resource Standards.
• Divide the remainder by three. The remaining
amount, if any, is the dependent’s maintenance needs
allowance. Do not allocate more than one-third of the
Dependent’s Need Standard for each dependent.
– For each ** legal dependent not living with a Community
spouse:
• Total all dependent’s income, including any countable
interest paid on allowable resources.
• Subtract this income from the MNIES for the number
of dependents. Refer to Z-300 Medically Needy
Income Eligibility Standards (MNIES). The
remainder, if any, is the maintenance needs.
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Note:
For HCBS Spend-down MNP patient liability
determinations involving an applicant/beneficiary with
legal dependents with or without a community
spouse, deduct the monthly MNIES for the number of
dependents.
**
I-1537.4 Verification
Obtain verification that:
• The couple is legally married,
• The dependents who are allowed the Maintenance Needs
Allowance are legal dependents,
• The applicant/beneficiary agrees to make the income available
to the spouse/dependent, and
• The spouse/dependent is willing to accept the income.
I-1537.5 Documentation
Document and file copies of the verification.
I-1538 Patient Liability-Post Eligibility Treatment of Income (PETI)
Post-eligibility treatment of income (PETI) rules are used to calculate
an applicant/beneficiary’s contribution to their cost of care for nursing
home, Home and Community Based Waiver or ICF/IID services. Also
called patient liability (PLI). PLI is the amount the applicant/beneficiary
must pay towards their monthly cost of care. It is based on the amount
of monthly income remaining after allowable deductions.
Allow deductions in the following order:
PETI Deductions
1. Earned Income Deduction
2. Personal Care Maintenance Needs Allowance **
3. Maintenance Needs of Community Spouse
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4. Maintenance Needs of Family
a. Legal Dependents Living with a Community Spouse
b. Legal Dependents with no Community Spouse
5. Allowable Health Insurance Premiums, Deductibles, Co-
Insurance Charges and Copayments
6. Allowable Medical Bills
Projection
PLI is projected for a three month period, beginning with the first month
of Medicaid eligibility.
PETI Steps
Step 1. Determine the total unearned income.
For the month of entry to an institution or the month the
individual converts from Medicare to Medicaid pay status
include the entire SSI payment.
For the following months, exclude any SSI payment
received over $30.00 for personal care needs.
Include all VA Pension including Aid and Attendance
payments.
Step 2. Determine the total gross earned income.
The earned income deduction is applicable to only
ICF/IID residents:
Subtract $65.00 and one-half of the remainder.
The difference is the total countable earned income.
Step 3. Add the countable earned and countable unearned income.
Step 4. Deduct the personal care maintenance needs allowance.
Refer to Z-700 LTC/HCBS SIL Rate, Resource Limits and
Personal Care Needs Allowance.
Note:
The reduction of the VA Improved Pension to a
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maximum of $90 is protected as the personal care needs
allowance. Allow the $90 PCN when the VA actually
reduces the pension to $90.
Step 5. Deduct maintenance needs of the community spouse
Step 6. Deduct maintenance needs of dependents living in the
home prior to admission. Refer to I-1536 Deductions.
Step 7. Subtract all allowable medical insurance premiums and other
allowable medical bills. Refer to I-1536 Deductions and H-
810.6 Incurred Medical Expense Deduction.
Step 8. The remainder is the patient liability owed by the
applicant/beneficiary for their cost of care. This is the
projected PLI.
Reconciliation
PLI is reconciled at the end of the projection period or when a change
in income or deductions occurs.
• Limit changes in income to the three months prior to the
reported on date.
• Deductions are required to be reported within 3 months
of the date of service.
The projected PLI will be reconciled against the actual PLI for the three
months prior to the date the change was reported. Any differences will
be carried forward to the first month in which PLI is allowed to be
adjusted per Advance Notice rules. Refer to MEM L-700 Advance
Notice.
During reconciliation verify the actual income and deductions for each
of the prior three months and determine the actual PLI for each month.
Any difference between the projected PLI and the actual PLI will be
reflected as a cumulative positive or negative amount called a
carryforward for each month.
• Any carryforward remaining after the first adjustable month is
combined with the projected PLI for subsequent months until
completely absorbed.
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• One-time, non-recurring deductions should also be
combined with the new projected PLI in addition to the
carryforward if there is one.
I-1538.1 Patient Liability Notice
Send the Quarterly Patient Liability Summary Notice to the
applicant/beneficiary/authorized representative and the provider
every three months from the certification/renewal month with the next
three projected months’ patient liability.
Send the Patient Liability Change Summary Notice to the
applicant/beneficiary/authorized representative and the provider any
time a change is reported.
