KFMAM Manual - 11/22/2009

04000

                                                                                                  06000

05000: Income Guidelines - There are two types of income, earned and unearned. Income shall include money received from such sources as wages, self-employment, property rentals, pensions, benefits, and contributions.

05100 - General Guidelines The following general rules are applicable:

5110 - Income must be real. To be real, income must be such that its value can be defined and measured.

5110.01 - Income value must be established by objective measurement.

5110.02 - Income shall be considered available when a client has a legal interest therein and the legal ability to make it available. Earned income is available to the individual producing it and all persons for whom he is legally responsible. Unearned income is available to the individual for whom it is intended and all persons for whom he is legally responsible.

5110.03 - The income of all persons whose needs are included in the medical assistance plan (including excluded mandatory filing unit members) must be considered. In addition, the income of all mandatory filing unit members who are excluded from the assistance plan in accordance with 3100 must be considered unless otherwise exempted. If, in the month of application, a mandatory filing unit person has left the home, his or her income shall not be considered as being available to the family in that month. Also see 5500.

5110.04 - The total income of husband and wife shall be considered in determining the eligibility of either or both for assistance if they are living together (including physical separation while maintaining a common life). This provision is not applicable for medical assistance when the husband and/or wife enter an institutional or HCBS arrangement. (See KEESM 8141, KEESM 8142(1), and KEESM 8143(1) and (2) for institutional arrangements and KEESM 8241, KEESM 8242(1) and KEESM 8243(1) and (2) for HCBS arrangements).

5110.05 - The income of an eligible or ineligible parent (excluding the stepparent for MP medical purposes) shall be considered in determining the eligibility of a minor child for assistance if the parent and child are living together. This includes the minor parent. This provision is not applicable to children in institutional or HCBS arrangements.

If a parent enters an institutional living arrangement (whether or not the facility is Medicaid approved) for other than a planned brief stay as defined in KEESM 8113, his or her income shall be considered in determining the eligibility of a minor child only for the month the arrangement begins. Thereafter, only the minor child's income as well as any income contributed by that parent can be considered in determining the eligibility of that child. If the parent begins to receive HCBS, his or her income shall not be considered for the minor child beginning with the first month of services.

See KEESM 8243(2) regarding consideration of income upon discharge.

5110.06 - A conversion of property from one form to another shall not be considered as income except for the proceeds from a contract for the sale of property.

5110.07 - For Medicaid poverty level, if assistance is requested for a pregnant woman, eligibility is to be determined based on the income of the woman and the father of the unborn child if in the home. If the pregnant woman is a minor, the income of her parents, if in the home, must also be considered. (See 2280.)

For MA PW, both eligibility and spenddown must be determined based on the income of the pregnant woman and the father of the unborn child, if present. If the pregnant woman is a minor, the income of her parents, if in the home, must be also considered. (See 2352.02.)

05200 Unearned Income - Unearned income is any income that is not earned and may be derived from benefits (unemployment compensation, Social Security, VA, etc.), pensions, contributions, and settlements. Unearned income received or reasonably assured to be received in a month or in the eligibility base period shall be considered.

Gross unearned income shall be considered unless exempt as noted below.

Income producing costs can be deducted from gross unearned income to consider the net amount. This could include such things as property taxes and insurance payments on income producing equipment, vehicles, or property as well as interest paid on property purchased on an installment plan. It would not include such things as income taxes, garnishment, depreciation, or payments toward principal on property purchased on an installment plan. Also, see 5413 for guidelines in establishing such costs on unearned income arising from a self-employment enterprise. It is the responsibility of the client to provide verification for income producing costs. In allowing for such costs, it is not the intent of EES programs to pay debts, subsidize a nonprofit activity, or treat income on the basis of IRS policies.

5210 Unearned Income Payments - Unearned Income Payments

5211 Regular Unearned Income - Regular unearned income shall be considered as income when it is reasonably assured to be available in the same monthly amount in the future. Regular unearned income shall be budgeted in accordance with 6000 and subsections.

5212 Irregular Unearned Income - Irregular unearned income results from income which varies in amount from month to month and is expected to continue. Irregular unearned income shall be budgeted in accordance with 6000 and subsections.

5213 Intermittent Unearned Income - Intermittent unearned income is received on other than a monthly basis such as quarterly, semiannually, or annually. It must be considered and averaged. (See 6113.) Intermittent unearned income received prior to the first eligibility period shall not be considered. The case record shall clearly indicate that the income is being treated as "intermittent" unearned income.

NOTE: An additional benefit check is provided on an annual basis to retired members of the Kansas Public Employer's Retirement System (KPERS) who began receiving a benefit prior to July 2, 1987. This 13th check is generally identical in amount to the monthly benefit. This check is to be treated as intermittent income and budgeted over the entire year by dividing by 12.

05300 Types of Countable Unearned Income -

5310 Annuities, Pensions - Annuities, pensions, retirement, veterans, or disability benefits, old-age, survivors, Social Security benefits, or strike benefits are countable. The amount of a VA benefit which has been augmented because of a dependent(s) (spouse and/or child) shall be regarded as income for the dependent, not the veteran. SSA benefits are considered the income of the person for whom they are intended.

5310.01 Child Support Current Support - Current support and/or alimony payments made directly to the household by nonhousehold members. Support and alimony payments are considered the income of the person for whom they are intended.

When child support and/or alimony are paid through the court, the gross amount before the fee is deducted is considered countable income. The amount of the fee is considered a household expense and is not to be excluded as income per 5311. See 5500 regarding the countability of child support arrearage payments.

Note: When calculating child support income, the date of receipt is considered to be the disbursement date on the Kansas Payment Center and KAECSES-CSE systems. When a consumer is receiving child support through KAECSES-CSE, this shall be used to verify child support and not the Kansas Payment Center.

5310.02 Worker's Compensation and Unemployment Insurance - The amount of Worker's Compensation payments awarded before attorney's fees are deducted is countable income. This is due to the fact that the portion that is an attorney's fee is considered a household expense and is not an allowable deduction from the income. Also refer to per 5311. Temporary worker's compensation is considered earned income. Refer to 5400.

The gross amount of unemployment compensation is countable income, even if some of the payment has been intercepted for child support purposes under the UI Intercept Program.

5310.03 Certain Reimbursements - The amount by which a reimbursement exceeds the actual incurred expense (when so indicated by either the household or the provider) shall be counted as unearned income. Reimbursements for normal living expenses are also considered income. See 5500.

5310.04 Trust Fund Income - Monies which are withdrawn or dividends which are or could be received by a household from trust funds considered to be exempted resources under KEESM 5430(1) or KEESM 5430(8) shall be considered income in the month received. Dividends which the household has the option of either receiving as income or reinvesting in the trust are to be considered income in the month they become available to the household, unless otherwise exempt under KEESM 5430(1) or KEESM 5430(8). Income producing costs shall be deducted from gross trust income to determine the countable amount. See 5200.

5310.05 Gambling Winnings - All winnings from such sources as bingo, lotteries, or racetracks are treated as unearned income in the month received. Gross amounts are counted even if taxes are taken out prior to paying the household. A gambling payoff that cannot be anticipated would not be counted for households in prospective budgeting.

5311 Vendor Income Not to be Exempted Income -

5311.01 - Monies that are legally obligated and otherwise payable to the household, but which are diverted by the provider of the payment to a third party for a household expense, shall be counted as income and not be exempted as a vendor payment. The distinction is whether the person or organization making the payment on behalf of the household is using funds that otherwise would have to be payable to the household. If an employer, agency, former spouse, or other person makes payments for household expenses to a third party from funds that are not owed to the household, these payments shall be excluded as vendor payments.

5311.02 Protective Public Assistance Payments - All or part of a public assistance grant which would normally be provided in a money payment to the household, but which is diverted to third parties or to a protective payee for purposes such as managing a household's expenses, shall be considered income to the household and not excluded as a vendor payment except as provided in 5500.

5311.03 Diverted Court-Ordered Payments - Money deducted or diverted from a court-ordered support or alimony payment (or other binding written support or alimony agreement) to a third party for a household expense, shall be considered income.

However, payments specified by the court order or other legally binding agreement to go directly to the third party rather than to the household, and support payments not required by a court order or other legally binding agreement (including payments in excess of the amount specified by a court order or written agreement) which are paid to a third party rather than the household, shall be excluded as a vendor payment even if the household agrees to the arrangement. This specifically applies to military retirement benefits where a court has ruled that a percentage of the payment must go to the ex-spouse as part of the divorce decree. Because this is part of the property settlement allowed by law, the ex-spouse's payments are not counted as income to the retiree since they are no longer legally obligated and otherwise payable to the retiree. See section (a) above for countable vendor payments.

5311.04 Money Withdrawn from an Individual Development Account (IDA) - Money withdrawn from an IDA and used for other than a qualified purpose (see 5500) shall be counted as unearned income in the month it is withdrawn.

5311.05 Others - Payments from government-sponsored programs, dividends, interests (that exceed $50.00 per month), royalties, monetary gifts (that exceeds $50 per month), gate money (money given to persons leaving prison), royalty payments made to tribal members from casino profits (also known as per capita income), and all other direct money payments from any source which can be construed to be a gain or benefit are counted in full.

See 5500 for exempt interest and for exempt monetary gifts.

05320 Contract Labor - Income earned from an employer, which forces the worker to absorb significant expenses in order to remain employed, is treated as self-employment income. These positions generally require the employee to enter into a contractual relationship with the employer. Examples of this type of employment would include a truck driver forced to purchase or lease his own truck or a rural mail carrier that must provide her own vehicle or pay all travel expenses, or an SRS Out-of Home relative child care provider. This would not apply to In-Home Child Care situations as with theses arrangements, the SRS parent is considered the employer of the childcare provider (relative or non-relative) coming into the child’s home. The presence of additional expenses must be verified and documented. Such expenses must be directly related to the person’s employment and required to maintain employment. Expenses cannot be reimbursed. Earnings dependent only upon typical deductions from income (such as state and federal taxes, OASDI, Medicare, and other mandatory or optional deductions) do not meet this criteria. In addition, persons required to incur only nominal expenses, such as mechanics required to purchase their own tools or regular postal employees required to purchase uniforms do not meet this criteria. These situations are to be evaluated on a case-by-case basis. The presence of a contract requiring the employee to provide equipment or cover costs necessary for employment is the primary indicator of income classified as contract labor.

05400 Earned Income - Earned income is income which is received as wages, salary, or profit resulting from the performance of services, including managerial responsibilities, by the recipient. Earned income may be derived from self-employment in the client's own business, or from wages or salary received as an employee including bonus pay received while an employee. Wages received from OJT are also to be considered as earned income, unless received by a TAF child who receives WIA (see 5500).

In addition, sick pay received for time off while working (i.e., short-term illness) shall be considered earned income when the person is still considered an employee by the employer and the person will be returning to work when recovered. This includes payments from temporary disability insurance in which the employer participates in the premium and temporary worker's compensation provided the individual is still considered an employee pending recuperation. If the person is not considered an employee while collecting the benefits (either sick pay or disability benefits), the benefits must be counted as unearned income per 5200.

Wages withheld by the employer to purchase benefits are counted as earnings in the pay period that the employee would have normally received them. Benefit "credits" offered in addition to wages which can be used to purchase benefits are not counted as income. If the employee does not use all of the credit to purchase benefits, and the employer pays the excess to the employee as part of their wages, the excess paid is counted as earned income.

05410 Types of Countable Earned Income -

5411 Regular Earned Income - Regular earned income results from earnings which are reasonably assured to be available in the same monthly amount in the future. (See 8300 and subsections for budgeting.)

5412 Irregular Earned Income - Irregular earned income results from earnings which vary in amount from month to month and are expected to continue. From a practical standpoint, irregular earnings result from full- or part-time employment when payment is received on any basis other than monthly or twice a month. (See 8300 and subsections for budgeting.)

5413 Self-Employment - Self-employment income is earned income received directly from one's own business, trade, or profession. Some guidelines to determine if an individual is self-employed include whether the person: (1) holds himself out as a business (e.g., advertises), (2) decides when and where to work, obtains own jobs or sales, and pays own expenses, has a risk of a profit or loss, and (4) pays his own FICA and income taxes (although this guideline, by itself, does not necessarily establish self-employment). The absence of one or more of these criteria indicate that the activity is not self- employment. Each situation must be evaluated on a case-by-case basis and documented in the case file as to whether a certain income is self-employment or not. An adjusted gross income amount must be determined by deducting income producing costs from the gross earnings.

5413.01 - Ownership of rental property and other income-producing personal property (other than cash assets) shall be considered a self-employment enterprise; however, income derived from the property shall be considered self-employment earned income only if a member of the household is actively engaged in the production of income and/or the management of the property at least an average of 20 hours per week. Otherwise it will be considered unearned income. See KEESM 5430 (12) regarding treatment of income producing property.

NOTE: Net countable income from this property, whether earned or unearned, shall be determined using the 25% standard deduction or actual expenses if requested. See 8403.01.

5413.02 - A loss from self-employment cannot be deducted from other income nor can a net loss of a business be considered as an income producing cost.

5413.03 - When at least one person has wages and at least one person is self-employed, separate calculations are required and the countable incomes are then totaled. Self-employment income shall be considered and averaged. (See 8403.)

5413.04 - Payments from a roomer or boarder shall be treated as though it were self- employed earned income. See 6213 for allowable cost of doing business (25% or actuals) for a roomer. Definitions of roomer and boarder are in the Appendix.

5413.05 - Payments to family or group day care providers through the Child Care Food Program, authorized by the National School Lunch Act shall be considered gross self-employment income from which the costs of doing business may be subtracted to determine net income. Included in the cost of doing business are the food expenses incurred by the day care providers to feed children under their care. Child care providers may also qualify to receive payments through this program for meals provided to their own children. These payments are also income from which the cost of providing meals may be deducted. The Child Care Food Program funds are administered by the State Department of Education and distribution to eligible day care providers is made through sponsoring organizations. Refer to the Appendix for the current list of sponsoring organizations.

5414 Intermittent Earned Income - Intermittent earned income is received on other than a monthly basis such as quarterly, semiannually, or annually. Such income is to be considered and averaged. Intermittent earned income received prior to the first eligibility period shall not be considered.

5415 Training Allowances and Payments - Training allowances and incentive payments and maintenance payments from vocational and rehabilitation programs recognized by federal, state, or local governments to the extent they are not a reimbursement are considered earned income. This includes wages earned through a job try out arranged through a CDC or through an industrial evaluation arranged through KETCH. See also 8135.

Maintenance payments made by Kansas Rehabilitation Services are considered a reimbursement and are thus exempt. See 5500.

Stipends to Native American which are intended to cover living expenses are also considered earned income.

5416 Wages Withheld/Salary Advances - Wages are sometimes paid in advance to an employee, usually at the request of the employee. Wage advances are not counted as income received. Repayment of those advances are not deducted from gross income, either.

However, wages held by the employer as a general practice, even if in violation of the law, shall not be counted as income to the household. For example, it is routine in many places of employment for the first week or two weeks of wages to be withheld and not paid until the following pay period. This is legal and the wages would not be counted until received.

5417 Income from Sale of Blood - Income derived from the sale of blood shall be treated as earned income.

5418 Garnished or Diverted Wages -

5418.01 - Available income shall not be reduced by wage earner plans, garnishments, income withholding orders and similar types of income reductions. Such forms of income withholdings are generally used to meet the individual's previous or ongoing obligations and are considered available for the purpose of determining cash and medical eligibility.

5418.02 - Wages earned by a household member that are garnished or diverted by an employer, and are paid to a third party for a household's expenses, such as rent or child support, shall be considered income. However, if the employer pays a household's rent directly to the landlord in addition to paying the household its regular wages, the rent payment shall be excluded as a vendor payment. In addition, if the employer provides housing to an employee, the value of the housing shall not be counted as income.

5419 Family Subsistence Supplemental Allowance (FSSA) - FSSA payments made by the military to certain members of the Armed Forces is considered earned income for all programs. This program was implemented May 1, 2001 and provides certain members of the Armed Forces with a special allowance to partially address the issue of enlisted members relying on food stamps to make ends meet. Qualifying members and their families are eligible for a cash allowance up to $500 per month. The law authorizing the program, Public Law 106-398, does not prohibit members from receiving FSSA benefits and food stamps at the same time. The amount of the FSSA will be shown on the member’s Leave and Earnings statement.

05500 Exempt Income - Income from the following sources is exempt as income only in the month received or, where indicated.

5510 ARRA – Economic Stimulus Payments - One-time economic recovery payments of $250 under the American Recovery and Reinvestment Act (ARRA) made to Social Security, Supplemental Security Income, Railroad Retirement, and Veterans Administration recipients are exempt as income.

5511 Adoption Support, Foster Care and Permanent Guardian Subsidy - Adoption Support, Permanent Guardian Subsidy and Foster Care payments (including Independent Living payments) are exempt as income in the month received and as a resource in the following months. Also see 2100.

5512 Agent Orange - Settlement payments are exempt as income in the month received and as a resource in the following months.

5513 Alaska Native Claims - Distributions from Native Corporations formed pursuant to the Alaska Native Settlement Act including case (not in excess of $2000/year), stock, partnership interest, land or interest in land, and interest in settlement trust are exempt as income in the month received and as a resource in the following months.

5514 Aleut Income - Payments granted to certain eligible Aleuts under Title II of P.L.100-383 (enacted 8/10/88) is exempt as income in the month received and as a resource in the following months.

5515 Americorps - Any payments provided through AmeriCorps are exempt as income in the month received and as a resource in the following months.

5516 Assistance Payments - Retroactive assistance payments are exempt as income in the month paid and as a resource in only the following month.

5517 Charitable Donations - Any cash or in-kind donation based on need not to exceed $300 in any quarter starting in January, April, July or October which are received from one or more public or private nonprofit charitable organizations are exempt as income in the month received and as a resource in the following months. Amounts in excess of $300 shall be considered as countable unearned income.

5518 Child Care Payments - Made to persons other than a childcare provider are exempt as income in the month received.

5519 Child Support - Arrearage payments are exempt as income in the month received. (If an arrearage is owed, child support payments paid in excess of the current support obligation are considered an arrearage.)

NOTE: This exemption does not apply to arrearage payments paid for a child who is age 18 or over. These payments are not considered child support payments and are considered the income of the person receiving the payment.

5519.01 - Child support pass through payments are exempt as income in the month received.

5520 Children’s Earnings - The earned income for a child who is an elementary or secondary school student (including GED) is exempt as income in the month received. The exclusion shall continue to apply during temporary vacation breaks, provided the child’s enrollment will resume following the break. This exclusion does not apply to emancipated minors or to unemancipated minors determined able to act in own behalf per 2011.01.

5520.01 - For MA CM, this exemption applies to children under age 18 or age 19 if the child is working toward attainment of a high school diploma or its equivalent. See 2100.

5520.02 - For all other Family Medical Programs, this exemption applies to children under age 18.

5520.03 - If the child’s earnings or amount of work performed cannot be differentiated from that of other household members (Example: migrant farm workers), the total earnings shall be prorated equally among the working members of the household and the child’s pro rata share excluded.

5520.04 - Once a student’s income loses its exempt status per above, that earned income shall be countable effective with the income month following the month in which the income loses its exempt status.

5521 Crime Victims Fund - Payments made pursuant to the Crime Victims Fund (Public Law 103-322), as amended are exempt as income in the month received.

5522 Death Benefits - OASDI, VA, RR, or other burial benefits when used toward the cost of burial are exempt as income for the month received and as a resource in the following months.

5522.01 - Payments occasioned by the death of another person to the extent that the payments have been expended or committed to be expended for purposes of the deceased person’s last illness and/or burial. Such payments include, but are not limited to, proceeds from a life insurance or burial insurance policy, gifts, and inheritances.

For the purposes of this provision, a person’s last illness is defined as the illness that resulted in the person’s death. Death resulting from injuries would not be considered in this definition. Medical expenses that can be reasonably attributed to the person’s last illness shall be excluded in determining the amount of payment that is considered to be available. Documentation is required.

5523 Disaster Payments - Federal major disaster and emergency assistance and comparable disaster assistance provided by state or local government or by disaster assistance organizations in conjunction with a presidentially declared disaster are exempt as income in the month received and as a resource in the following months.

This includes disaster unemployment assistance to an individual as a result of a major disaster. Individuals cannot be eligible for any other unemployment compensation and also receive disaster unemployment benefits. Payments are limited to 26 weeks. Central Office will notify the field if such disaster unemployment assistance is paid in Kansas due to a major disaster.

5524 Donated Foods - The value of the U.S. Department of Agriculture donated foods are exempt as income in the month received and as a resource in the following months.

5525 Earned Income Tax Credits - Earned income tax credits received either as a lump sum refund or on an ongoing basis are exempt as income in the month received and as a resource in the following months.

5526 Educational Income - Any bona fide grant, scholarship, loan or other money payment for educational purposes from any source including, but not limited to, PELL grants, SEOG’s, GLS’s, Carl D. Perkins Vocational ACT grants, college work study, grants or loans from civic organizations, Veterans Educational Income and private student loans from family or nonfamily members is exempt as income in the month received and as a resource in the following months.

Monies which are received as monthly living benefits from stipends or special programs such as Social Security to survivors based on educational participation, or to Native Americans through Tribal sources or Bureau of Indian Affairs shall not be exempt under this provision as they are not considered grants, loans or

5527 Energy Assistance - Payments or allowances made under some federal laws for the purpose of providing energy assistance are exempt from consideration as income in the month received. An example of such federal program is the Department of Health and Human Services' Low Income Energy Assistance Program (LIEAP).

Other home energy assistance furnished by a federal or state regulated entity whose revenues are primarily derived on a rate-of-return basis, by a private nonprofit organization, by a supplier of home heating oil or gas, or by a municipal utility company which provides home energy, if the assistance provided is based on need, is exempt as income in the month received.

5528 Family Subsidy - Payments provided through the Mental Health and Developmental Disabilities Commission or Family Support payments provided through the Children and Family Services Commission are exempt as income in the month received and as a resource in the following months.

5529 Food Stamps - value of the benefits issued under the current Food Stamp Act are exempt as income in the month received and as a resource in the following months.

5530 Foster Grandparents - Any payment provided to volunteers serving as foster grandparents is exempt as income in the month received and as a resource in the following months.

5531 Gifts - The first $50 (per case/per month) of irregular, occasional or unpredictable monetary gifts are exempt as income in the month received. Any amount in excess of $50 must be counted.

5532 Holocaust Survivors - Reparation payments made to Holocaust survivors are exempt as income in the month received. These payments shall also be exempt for purposes of determining patient liability in a long term care arrangement.

5533 Hostile Fire Pay/Combat Pay - Hostile fire pay (also known as combat pay) received while in active military service is exempt as income in the month received.

See Policy Memo #2005-03-03 Exclusion of Combat Pay for more detailed information.

5534 Housing Assistance - From federal housing programs including negative rent payments made to tenants of subsidized housing under HUD regulations is exempt as income in the month received and as a resource in the follow months.

5535 Indian Monies - Up to $2000 per calendar year of income received by individual Indians, which is derived from leases or other uses of individually-owned trusts or restricted lands pursuant to P. L 103-66 and P. L. 97-458 is exempt as income in the month received. For purposes of this provision, the exclusion of income shall be applied only to months for which an eligibility determination is being made. For income which is received monthly or more frequently, the exclusion shall be applied beginning with the first month of eligibility determination until the $2000 limit is attained. For intermittent income situations, the income up to $2000 shall be subtracted from total intermittent income for the appropriate period with the remainder prorated to determine the countable monthly amount.

5535.01 Secretary of Interior - Any funds for an Indian tribe which are distributed or held in trust by the Secretary of the Interior (including Indian judgment funds), including interest and investment income accrued on money held in trust and initial purchases made with any funds distributed are exempt as income in the month received and as a resource in the following months.

Contact with the Bureau of Indian Affairs will be necessary to verify that the funds are exempted or are another type of benefits that must be counted as income.

5535.02 Aroostook Band - Payments granted to the Aroostook Band of Micmac Indians under Public Law 102-171 are exempt as income in the month received and as a resource in the following months.

5536 Individual Development Accounts - The interest on an allowable individual development account (IDA), including authorized matching contributions and accrued interest, is exempt as income as long as the account is maintained. For Working Healthy, income deposited into an IDA is also exempt in the month deposited. IDA’s are exempt resources for all programs. An allowable IDA meets the following guidelines:

5536.01 - It is established by or on behalf of a TAF recipient or by or on behalf of an individual participating in the Assets for Independence Demonstration Program (AFIA) and is used for a qualified purpose.

5536.02 - A qualified purpose is one or more of the following:

(a) - post-secondary education expenses for college or vocational-technical school. Learning Quest or other 529 accounts are not considered IDA’s;

(b) - first home purchase (must not have owned a home within three years of acquisition); or

(c) - business capitalization (business plan must be approved by financial institution or non-profit loan fund).

NOTE: Any funds withdrawn from an IDA and used for any purpose other than one of those listed above shall count as unearned income in the month withdrawn.

5536.03 - The IDA must be a trust funded through periodic contributions by the establishing individual and may be matched by or through a qualified entity for a qualified purpose.

5536.04 - A qualified entity to match IDA funds for a TAF recipient is either a not-for-profit organization described in section 501(c)(3) of the IRS code of 1986 and exempt from taxation under section 501(a) or a state or local government agency acting in cooperation with a 501(c)(3) organization. For AFIA participants, matching contributions are made by the federal government through a grantee.

5536.05 - AFIA recipients may only contribute to IDAs with income derived from earnings.

Note: The earnings of an adult placed in an IDA are counted as earned income in the month earned.

5536.06 - Parents may establish IDAs for their children as well as for themselves. Children may also contribute their earnings to accounts established by or for them.

5537 In-Kind Income - Benefits are exempt as income in the month received

5538 Interest and Dividends - Interest and Dividend income that does not exceed $50.00 per month is exempt as income in the month received. If in excess of that amount, the full amount shall be counted.

Dividends earned on life insurance policies are exempt in full. Interest earned on additional insurance purchased with dividends is also exempt.

Unless specifically excluded, accrued interest and/or dividends are countable resources the month following the month of receipt.

5539 Interest to a Burial Fund - Interest credited to an exempted burial fund or to a prepaid burial space contract account is exempt as income in the month received and as a resource in the following months. See KEESM 5430 (1)

5540 Japanese Aliens - Payments granted to certain United States citizens of Japanese ancestry and resident Japanese aliens under Title I of P.L. 100-383 (enacted 8-10-88) are exempt as income in the month received and as a resource in the following months.

5541 Loans - All loans, including loans from private individuals as well as commercial institutions, including deferred educational loans, shall be exempted from household income.

5541.01 - Monies received from reverse mortgages are treated as loans, even if payments are regular and predictable.

5541.02 - When verifying that income is exempt as a loan, a legally binding agreement is not required. A simple statement signed by both parties that indicates that the payment is a loan and must be repaid shall be sufficient verification. However, if the household receives payments on a recurrent or regular basis from the same source but claims the payments are loans, the provider of the loans may be required to sign a statement that indicates that repayments are being made or that payments will be made in accordance with an established repayment schedule.

5542 Lump Sums - Payments are exempt as income in the month received. A lump sum payment is defined as a nonrecurring one time payment that, if received regularly, would be non-exempt. Classification as a lump sum is dependent on its unpredictability either in amount or time of receipt that prohibits consideration as intermittent income. Lump sum payments may be from (but not limited to) the following sources:

5542.01 - Income tax refunds, rebates, or credits when paid as a lump sum benefit.

5542.02 - Other payments, such as retroactive cash assistance, unemployment compensation, Social Security, SSI, or railroad retirement benefits.

NOTE: Under PRWORA provisions, all retroactive SSI benefits in an amount that equals or exceeds 12 times the federal benefit rate paid to an eligible SSI individual generally must be paid in installments.

Such retroactive benefits will be paid in not more than 3 installments and the installment payments will be made at 6-month intervals. Since these installments replace what would have been paid as a single lump sum payment, these installment payments for retroactive SSI benefits are exempt as income.

NOTE: Regarding SSI Lump Sums: If SSA requires that the SSI lump sum be placed in a separate account, the entire amount of the lump sum shall be exempt, including any portion of the lump sum that is for the current income month.

5542.03 - Lump sum insurance benefit, including proceeds from crop insurance.

5542.04 - Refunds of security deposits on rental properties or utilities.

5542.05 - Bonus or severance pay paid in a lump sum after employment has been terminated.

5542.06 - Retroactive child support rebate payments including CSE checks (URA) received by the client while the TAF case is in open status.

5542.07 - VA pension benefit adjustments paid in a lump sum.

5542.08 - Lump sum child support arrearage payments. (If an arrearage is owed, child support payments paid in excess of the current support obligation are considered an arrearage.)

5542.09 - Excess insurance payments received through the Medicaid Program.

5543 Monies Withheld Voluntarily or Involuntarily - Monies withheld from assistance payments (e.g., TAF, GA, SSI) shall be included as countable income if the monies are withheld for the purpose of recovering from a household an overpayment which resulted from the household's fraudulent failure to comply with a state, federal, or federally-assisted program which provides assistance on the basis of financial need. (For a definition of "fraudulent," refer to 8400).

5543.01 - Mandatory deductions from military pay for educational purposes shall not be included as income (or as a resource) while the individual is enlisted in the armed services. If individuals enroll in an educational institution after they leave the service, the amount withheld from salary plus any amounts matched from the VA will be treated as countable educational income minus expenses. Individuals who choose not to attend any school will receive the withheld monies in a lump sum payment and the payment shall be exempt per item 5542 above.

5543.02 - In addition, for all medical programs, programs not based on financial need that have a portion withheld to repay a prior overpayment received from that same income source, such as SSA, VA, Unemployment or Worker’s Compensation shall not have the portion withheld counted as income.

5544 Older Americans Act - Payments received via the Community Services Employment Program funded under Title V of the Older Americans Act of 1965 (as amended by P.L. 100-175, the Older Americans Act Amendments of 1987) are exempt as income in the month received. Programs in Kansas funded under Title V include: Green Thumb, Project Ayuda (serving Wyandotte, Johnson, Douglas, and Shawnee counties), and the Senior Community Service Employment Program through the Midway Chapter of the American Red Cross (serving Sedgwick, Reno, Harper, Kingman, Butler, Cowley, Harvey, and Sumner counties).

5545 Radiation Exposure - Payments made pursuant to the Radiation Exposure Compensation Act, P.L. 101-426 (10-15-90) are exempt as income in the month received and as a resource in the following months. This law compensates individuals for injuries or deaths resulting from exposure to radiation from nuclear testing and uranium mining in Arizona, Nevada and Utah.

5546 Rehabilitation Services Payments - Income directly provided by Kansas Rehabilitation Services, except as noted in 5415 is exempt as income in the month received and as a resource in the following months. Maintenance payments are also exempt as they are in excess of normal living expenses and are considered a reimbursement.

5547 Reimbursements - For out-of-pocket expenses are exempt as income in the month received and as a resource only in the following month.

Examples of exempt reimbursements are ones for job or training-related expenses such as travel, perdiem, uniforms, and transportation to and from the job or training site. Reimbursements that are provided over and above the basic wages for these expenses are excluded; however, these expenses, if not reimbursed, are not otherwise deductible. Reimbursements for the travel expenses incurred by migrant workers are also excluded.

Also exempt are medical and dependent care reimbursements, reimbursements to students for specific education expenses such as travel or books, and jury duty payments.

To be exempt, these payments must be provided specifically for an identified expense other than normal living expenses and used for the purpose intended. When a reimbursement, including a flat allowance, covers multiple expenses, each expense does not have to be separately identified as long as none of the reimbursement covers normal living expenses.

5548 Relocation Assistance - Payments received under the Uniform Relocation Assistance and Real Property Acquisition Policy Act of 1970 are exempt as income in the month received and as a resource in the following months. The applicant’s or recipient’s equity in a home is to be disregarded to the extent that such equity was purchased with payments under the Uniform Relocation Act of 1970.

5549 Renal Dialysis - Special incentive payments received for renal dialysis patients for care in their own home are exempt as income in the month received.

5550 Repair or Replacement Payments - Income from a one-time payment or a portion of a one-time payment from a settlement for repair or replacement of property or other settlement, including legal services and medical insurance payments, when the settlement is used for the intended purpose within 6 months of its receipt. This income is exempt as income in the month received and as a resource in the following 6 months.

5551 Ricky Ray Hemophilia Act Fund - Payments made pursuant to the Ricky Ray Hemophilia Relief Fund Act, P.L. 105-369 are exempt as income and as a resource for all programs. The payment is a one time amount of $100,000.

NOTE: Interest (that exceeds $50, see item 5538) earned on these exempt funds is not exempt as income.

5552 SCORE or ACE - Payments received through Service Corps of Retired Executives or Active Corps of Executives is exempt as income in the month received and as a resource in the following months.

5553 Senior Community Service Employment Program - Payments received through the Senior Community Service Employment Program are exempt as income in the month received.

5554 Senior Health Aides - Payments received through Senior Health Aides or Senior Companions are exempt in the month received and as a resource in the following months.

5555 Shared Living - In shared living arrangements; cash paid from one family to another toward the total cost of shelter is exempt as income in the month received.

5556 Special Allowances - Payments received as TAF special allowances are exempt as income in the month received. Examples of Special Allowances payments are special transportation payments and special service payments.

5557 SSI - Income of an SSI recipient (including 1619(b) recipients) and retroactive SSI benefits (even if the individual receiving the benefit is no longer an SSI recipient) are exempt as income in the month received. This does NOT apply to persons receiving long term care in Medicaid approved institutions as provided in KEESM 8112).

5558 Susan Walker v. Bayer (MA & MP) - Payments made pursuant to a class settlement in the case of Susan Walker v. Bayer Corporation is exempt as income in the month received and as a resource in the following months. This case involved hemophiliacs who contracted the HIV virus from contaminated blood products. Interest earned on retained funds is not excluded and is countable per item 5538. Accumulated interest is also countable as a resource beginning the month following the month of receipt, even if commingled with non-exempt funds.

5559 Tax Refunds - Legislated tax rebates and refunds are exempt as income in the month received.

5560 Trust for a VA Child - Money for a child which is held in trust by VA and determined by VA unavailable for subsistence needs is exempt as income in the month received and as a resource in the following months.

5561 VA Payments - VA aid and attendance benefits and house bound allowance payments are exempt as income in the month received.

5561.01 - VA benefits resulting from unusual medical expense (UME) deductions are exempt as income in the month received.

5561.02 - VA benefits paid to children of Vietnam veterans who are born with spina bifida pursuant to Public Law 104-204 are exempt as income in the month received and as a resource the following months.

5561.03 - VA Benefits paid to children of women Vietnam veterans born with certain birth defects pursuant to Public Law 106-419 are exempt as income in the month received and as a resource the following months.

5562 Vendor Payments - Money payments that are not payable directly to a household but are paid to a third party for a household expense are vendor payments and exempted as follows:

5562.01 - A payment made in money on behalf of a household shall be considered a vendor payment whenever a person or organization outside of the household uses its own funds to make a direct payment to either the household's creditors or a person or organization providing a service to the household. For example, if a relative or friend, who is not a household member, pays the household's rent directly to the landlord, the payment is considered a vendor payment and is not counted as income to the household. Similarly, rent or mortgage payments, made to landlords or mortgagees by HUD or by state or local housing authorities, are other examples of vendor payments and are also exempted.

5562.02 - Cash assistance payments or other assistance payments financed by state or local funds which are not made directly to the household but paid to a third party on behalf of the household to pay a household expense shall be considered an exempt vendor payment and not counted as income to the household if such payments are for:

(1) Medical assistance;

(2) Child care assistance;

5562.03 - Housing assistance payments made to a third party on behalf of a household residing in temporary housing, if the temporary housing provided for the household lacks facilities for the preparation and cooking of hot meals or the refrigerated storage of food for home consumption.

5562.04 - Cash assistance payment or other assistance vendor payments financed by state or local funds which are made on behalf of migrants in the labor stream are exempt and not counted as income regardless of the purposes of the vendor payments.

5562.05 - Payments in money that are not made to a third party, but are made directly to the household, are counted as income and are not excludable as vendor payments.

5562.06 - Cash assistance payments or other assistance financed by state or local funds which are provided over and above the normal PA grant or other assistance payment and would not normally be provided in a money payment to the household shall be considered emergency or special assistance and exempted as income if provided directly to a third party for a household expense. This rule applies even if the household has the option of and receives a direct cash payment.

See 5212 for instructions on treatment of expenses covered by a vendor payment.

5563 VISTA - Is an AmeriCorps Program, any payments received through the VISTA program are exempt as income in the month received.

5564 Work Employment Program Payments - The values of any services or monies received for support or transitional services through work programs are exempt as income in the month received.

5565 Workforce Investment Act (WIA) - Income received from the Workforce Investment Act of 1998 (WIA) is exempt as income with the exception of on-the-job training program payments and paid work experience received by persons 19 or older. On-the-job payments and paid work experience received by persons under 19 are exempt as income.

5566 Youth Service Corps - Youth Service Corps - Payments provided through Youth Service Corps are exempt in the month received.

05580 Treatment of Income and Deductions of Persons Not Included in the Assistance Plan - (1) - Medical - The gross non-exempt earned and unearned income of legally responsible persons is counted.

(2) - Medical - All earned and unearned disregards and deductions are applicable to persons who are excluded from the assistance plan but whose income must be considered.