.07 Consideration of Income.

A. This regulation contains the rules for considering earned and unearned income of:

(1) Members of the MAGI household unit and those individuals whose income is considered pursuant to Regulation .06-1 of this chapter in determining financial eligibility of individuals for retroactive and current eligibility for the period under consideration; or

(2) Members of the MAGI exempt assistance unit and those individuals whose income and resources are considered pursuant to Regulation .06 of this chapter in determining financial eligibility of an assistance unit for retroactive and current eligibility for the period under consideration.

B. Definitions.

(1) "Disregard" means the amount of money specified by regulation that can be subtracted from countable income.

(2) "Excludable income" means income which is exempt from consideration as countable income.

(3) "Income tax" means federal, state, or local taxes either paid or withheld from income of a self-employed person not to exceed the tax table amount for the number of known dependents.

(4) “Modified Adjusted Gross Income (MAGI) based income” means income calculated using the same financial methodologies used to determine modified adjusted gross income as defined in 42 CFR 435.603 , with the following exceptions:

(a) An amount received as a lump sum is counted as income only in the month received;

(b) Scholarships, awards, or fellowship grants used for education purposes and not for living expenses are excluded from income; and

(c) American Indian or Alaska Native exceptions in accordance with 42 CFR 435.603.

C. The applicant shall report all income. When there is evidence of regular expenditures which are inconsistent with reported income, the applicant shall be required to offer an explanation and appropriate verification to reconcile the inconsistency.

D. The Department or its designee shall consider all income in accordance with this regulation.

E. Retroactive Eligibility. The income to be considered is that which was actually available during the retroactive period under consideration.

F. Current Eligibility. In considering income for current eligibility, the following rules apply:

(1) When an individual has regular income in the MAGI coverage group, the amount to be considered is that which is available or can reasonably be expected to be available for a projected period of 12 months, including the month of application;

(2) When an individual has a regular income in the MAGI Exempt coverage group, the amount to be considered is that which is available, or can reasonably be expected to be available, for a projected period of 6 months including the month of application;

(3) When a member of a MAGI exempt assistance unit works for less than 12 months but receives an annual salary, is self-employed, or has irregular or seasonal earning, the amount to be considered is one-half the expected annual income based on the prior year's gross income;

(4) For a deceased individual, the income to be considered is that which was available up to and including the month of death. When there are other individuals in the assistance unit or MAGI household unit, the deceased individual's income will be averaged over the unit's established period under consideration.

G. Treatment of Income.

(1) All earned and unearned income which is not designated as excludable income pursuant to §J of this regulation shall be counted to establish countable gross income.

(2) Countable gross income for MAGI Exempt coverage groups shall be reduced by subtracting appropriate income disregards as specified in §K of this regulation to determine countable net income.

(3) Countable gross income for MAGI coverage groups shall be the household income calculated according to MAGI.

(4) MAGI income limits shall be:

(a) Converted from traditional income limits to account for elimination of income disregards; and

(b) Increased by 5 percentage points of the federal poverty level for the following circumstances:

(i) When an individual’s income exceeds the Medicaid income standard; and

(ii) The income standard is the highest income standard under which the individual can be determined eligible.

H. Earned income includes the following:

(1) Wages.

(2) Commissions and fees.

(3) Salaries and tips.

(4) The value of in-kind goods and services received as a result of employment.

(5) Profit from self-employment income of MAGI exempt coverage groups, as described in §K(3)(a)of this regulation.

(6) Remuneration received for work or for activities performed as a participant in a program conducted by a sheltered workshop or activities center.

(7) The Earned Income Tax Credit (EITC) a person receives through the Tax Reduction Act of 1973.

(8) Sick pay which counts as earnings for deduction purposes under Title II of the Social Security Act.

(9) Work study earnings.

I. Unearned income includes the following:

(1) Benefits and income from:

(a) Social Security;

(b) Veterans Administration;

(c) Workmen's Compensation Board;

(d) Black Lung Program;

(e) Railroad Retirement Board;

(f) Government, private, or company pensions and annuities;

(g) Unemployment benefit plans;

(h) Unemployment supplemental benefit plans;

(i) Payments from oil or mineral rights (leases);

(j) Government payments on land;

(k) Insurance benefits paid directly to a person;

(l) Trust funds;

(m) Individual Retirement Accounts (IRA's);

(n) Keogh Plans;

(o) Military allotments.

(2) Alimony, court-ordered and voluntary support payments received from an absent spouse, or an absent natural or adoptive parent.

(3) Financial contributions received from persons or public or private agencies.

(4) In-kind Support—Aged, Blind, or Disabled.

(a) One-third the appropriate medically needy income level for the number of persons in an aged, blind, or disabled assistance unit, when:

(i) A person receives in-kind support in the form of food and shelter while living in the household of another, and

(ii) The person pays less than his pro rata share of the total household expenses for food and shelter, unless he documents otherwise.

(b) The value of actual payments for food, shelter, or both made by other persons on behalf of the assistance unit.

(c) The fair market value of free shelter received while living in an independent dwelling unit. When the person fails to present evidence of the fair market value of the dwelling unit, the presumed value shall be 1/3 the appropriate medically needy income level for the number of persons in the assistance unit.

(d) This provision may not apply to persons residing in public or private institutions, foster homes, group homes, or commercial establishments.

(5) Interest, dividends, royalties, or other income accrued to stocks, bonds, insurance, and savings certificates if the income is available to the person on a regular basis.

(6) Interest or dividends accrued to savings accounts.

(7) Mortgage payments.

(8) Lump sum benefits or other amounts of income received on a one-time-only basis including gifts, inheritances, retroactive benefit payments, lottery winnings, damage claims unless specifically excluded by other regulations, or any other lump sums or portions of them that are not excluded under §J or K of this regulation.

(9) Profit from Rental Income as described in §§L(3)(b) and M(2)(c)(ii) of this regulation.

(10) Cash assistance received from nongovernmental social agencies unless excluded under the provisions of §J or §K of this regulation.

(11) Grants, loans, scholarships, and fellowships for educational purposes, except as specified in §J(3) and (9) of this regulation.

(12) Cash assistance, including Public Assistance grants and SSI benefits, except as specified in Regulation .06B(3)(a)(ii) and .06C(4)(a)(ii) of this chapter.

(13) Sick pay which does not count as earnings for deduction purposes under Title II of the Social Security Act.

J. Excludable Income—Aged, Blind, or Disabled. Income from the following sources shall be excluded in determining countable gross income:

(1) The value of the coupon allotment under the Food Stamp Program.

(2) Payment received under the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, 42 U.S.C. §4601 et seq., excluding compensation received for the fair market value of the acquired real property.

(3) Grants or loans to an undergraduate student for educational purposes made or insured under any program administered by the Secretary, U.S. Department of Education.

(4) Work-study earnings, work-study stipends, and reimbursement for out-of-pocket expenses of a student.

(5) Benefits received under Title III C Nutrition Program for the Elderly of the Older Americans Act of 1965, as amended.

(6) Stipends, compensation, or expenses received by volunteers from a program existing or to be set up under the "Domestic Volunteer Service Act of 1973" sponsored by ACTION, such as but not limited to:

(a) (PLS) Demonstration Project Program for Local Services;

(b) VISTA (Volunteers in Service to America);

(c) UYA (University Year for Action);

(d) RSVP (Retired Senior Volunteer Program);

(e) Foster Grandparents;

(f) Older American Community Service Program;

(g) SCORE (Service Corps of Retired Executives); and

(h) ACE (Action Corps of Executives).

(7) The value of supplemental food assistance received under the Child Nutrition Act of 1966 as amended, and the special food service program for children under the National School Lunch Act, as amended.

(8) The value of livestock and home produce used for own consumption.

(9) Educational Expenses.

(a) The portion of educational grants, loans, scholarships, and fellowships that is designated and used solely for undergraduate and graduate educational pursuits such as tuitions, books, mandatory fees, transportation to and from educational institutions, and the cost of child care while in attendance.

(b) These expenses may be allowed to the extent that there are insufficient funds from those grants and loans specified under §J(3) of this regulation to cover these expenses.

(10) The earned income of a blind or disabled child who is younger than 22 years old and regularly attending school, including a college, university, or vocational training school, not to exceed $1,620 a calendar year.

(11) Payments received from providing foster care or subsidized adoption services to a child placed in the home by a public or private nonprofit child placement or child care agency.

(12) Assistance provided in cash or in-kind under the Emergency Energy Conservation Services Program, including plans for crisis intervention to prevent fuel cut-offs and assistance provided under the Low-Income Home Energy Assistance Act.

(13) The value of rent subsidies or other assistance received by a person for his dwelling unit under:

(a) The U.S. Housing Act of 1937, 42 U.S.C. §§1400 et seq.;

(b) The National Housing Act, 12 U.S.C. §§1701 et seq.;

(c) Section 101 of the Housing and Urban Development Act of 1965, 42 U.S.C. §§1400 et seq.;

(d) Title V of the Housing Act of 1949, 12 U.S.C. §§1601 et seq.; 42 U.S.C. §§1400 et seq.

(14) Infrequent or Irregular Earned Income. Infrequent or irregular earned income shall be excluded if:

(a) The total gross amount does not exceed $30 per quarter; and

(b) It is received less frequently than twice per quarter or cannot be reasonably anticipated.

(15) Infrequent or Irregular Unearned Income. Infrequent or irregular unearned income shall be excluded if:

(a) The total amount does not exceed $200 per 6 months; and

(b) It is received less frequently than twice per quarter or cannot be reasonably anticipated.

(16) The value of earned and unearned in-kind income.

(17) Third-party payments for food, clothing, shelter, or other goods and services made on behalf of an assistance unit or other persons whose income and resources are considered in determining eligibility, if the payment is not reimbursement for services rendered by a member of the assistance unit or other persons whose income and resources are considered.

(18) The Earned Income Tax Credit (EITC) a person receives through the Tax Reduction Act of 1973.

(19) Reparation payments made by the Federal Republic of Germany.

(20) For recipients of a VA pension who have neither spouse nor child, the VA payment not to exceed $90 per month beginning the month after the month of admission to a long-term care facility.

(21) Cash, including interest earned on the cash, or in-kind replacement received from any source for purposes of repairing or replacing an excluded resource that is lost, damaged, or stolen is not income but continues to be considered as an excluded resource in accordance with the provisions of Regulation .08G(7) of this chapter.

(22) Assistance, including any interest earned on the assistance, received under the Disaster Relief Act of 1974 (PL 93-288) or other assistance provided under a federal statute because of a catastrophe which is declared to be a major disaster by the President of the United States is not income but an excluded resource.

(23) Support and Maintenance (In-Kind Income) Provided as Replacement for an Excluded Home Because of a Casualty Loss or a Presidentially Declared Major Disaster.

(a) When an excluded home is damaged or destroyed and temporary housing is furnished to a person who owned an excluded home, the in-kind support and maintenance is not counted as income. This temporary housing is intended to replace the home pending repair or replacement of the excluded home.

(b) When an excluded home is damaged or destroyed as a result of a presidentially declared major disaster, the value of support and maintenance (in cash or in-kind) received by a person, or couple, is excluded, if:

(i) The person, or couple, was residing in the household as a home when a catastrophe occurred in the area in which the home was located;

(ii) The catastrophe was declared by the President to be a major disaster for purposes of the Disaster Relief Act of 1974;

(iii) The person, or couple, stopped living in the home because of the catastrophe and, within 30 days after the catastrophe, began to receive the support and maintenance; and

(iv) The person, or couple, received the support and maintenance while living in a residential facility, including a private home, maintained by another person.

(24) Any amount refunded from any public agency, if paid on the purchase of food or the satisfaction of real property levies.

(25) One-third of support payments made to or for a blind or disabled child by an absent parent.

(26) Interest income accrued to a:

(a) Bank account during the period under consideration, such as a checking, savings, or money market account;

(b) Dedicated bank or other financial institution account that is considered an excludable resource because it is unavailable, such as an escrow account for a security deposit; or

(c) Keogh account, individual retirement account (IRA), or other private retirement account that is countable as a resource.

(27) Interest payments received for a mortgage, promissory note, or other loan.

(28) Refund of taxes on income, property, food, or other items already paid.

(29) Proceeds of a loan received by an individual as the borrower.

(30) Payments received from a trust, if the trust is countable as a resource.

(31) Income from the sale of an assistance unit member's blood or plasma.

(32) Cash donations based on need received from one or more charitable organizations.

(33) All income excluded by federal statute for medical assistance programs.

K. Disregards — Aged, Blind, or Disabled. In order to determine countable net income, the following disregards shall be deducted from the countable gross income of an aged, blind, or disabled assistance unit:

(1) A general disregard of $20 per month for a person or a couple.

(2) An earned income disregard of $65 per month plus one-half of the remainder of the earned income of a person or a couple.

(3) A disregard of one-half of the gross income amount for the following types of income:

(a) Profit from self-employment income, unless an applicant or recipient can document a cost to produce in excess of the disregard of one-half of gross income; and

(b) Profit from rental property income and other income-producing property.

(4) The amount of earned income used to meet any expenses reasonably attributable to earning of income of a blind person younger than 65 years old in accordance with 20 CFR §416.1112(c)(5).

(5) Any wages, allowances, or reimbursement for transportation and attendant care costs, unless excepted on a case-by-case basis, when received by a blind or disabled handicapped person employed in a project under Title VI of the Rehabilitation Act of 1973 as added by Title II of Pub. L. No. 95-602 (92 Stat. 2992, 29 U.S.C. §795(b)(c)).

L. Schedule MA-1.

Persons Dependent Medical Assistance Standards
on Income Annual Monthly
1 $ 4,200 $ 350
2 4,700 392
3 5,200 434
4 5,700 475
5 6,252 521
6 6,876 573
7 7,740 645
8 8,508 709
9 9,192 766
10 9,912 826
11 10,632 886
12 11,352 946
13 12,048 1,004
14 12,756 1,063
15 13,488 1,124
16 14,208 1,184
Each Additional Person 732 61