Medi-Cal Handbook Non-MAGI MC Income 25. Non …Update # 16-17 Revised: 10/06/16 Medi-Cal Handbook...

Medi-Cal Handbook page 25-1Non-MAGI MC Income

25. Non-MAGI MC Income

References to completion of budget forms only apply when a manual computation is necessary (i.e., due to system downtime).

25.1 General/Ownership

25.1.1 General [50501]

Income includes benefits received in cash or in-kind from:

• Labor• Services provided• Business activities• Returns from real or personal property• Contributions• Other similar sources.

Income used to determine share of cost must be:

• Currently available• Received by eligible and/or ineligible members of the MFBU.

25.1.2 Ownership of Income

Rule

Effective 1/1/90, income is considered to belong to the person who:

• Is named on a negotiable instrument.• Is given cash.• Receives income-in-kind.

Update # 16-17 Revised: 10/06/16

2 Medi-Cal HandbookNon-MAGI MC Income

Multiple Owners

Payments made in the name of more than one person shall be evenly divided among all named persons, unless there is a document which establishes ownership proportions.

Community Property Laws

Community property laws shall not be considered in determining the ownership or availability of the income of either spouse.

Representative Payees

Income received in the name of an applicant/beneficiary shall not be considered available when evidence clearly establishes that:

• He/she receives the income as a representative payee, conservator, or guardian on behalf of another person, and

• The payee has no ownership interest in the income or its source.

Trusts

Income from an exempt trust shall be considered available as specified in the trust document.

Note:If not specified in the trust, consider the income available as specified in the “Ownership of Income” rules. [Refer to “Ownership of Income,” page 25-1.]

25.1.3 Budgeting

References to completion of budget forms only apply when a manual computation is necessary (i.e., due to system downtime).

Medicare

When determining the amount that is actually available for allocation, the EW must consider if Buy-In is in effect. Persons who actually pays Medicare premium are allowed these deductions in the budget computation.

Revised: 10/06/16 Update # 16-17


Other Health Insurance Premiums

The premiums for private health insurance for family members are to deducted from the budget of the person who actually pays it. The LTC spouse may be allowed a deduction for the premium paid for the private coverage for himself and his spouse, even though the community spouse is not requesting or receiving Medi-Cal, as long as it is paid with the LTC person's income.

25.2 ABD-MN Person in Board and Care With No Community Spouse [50563]

25.2.1 Allocations

The MC 176 W Allocation/Special Deduction Worksheet A, Section III is used to compute an allocation from a person in a board and care facility to the spouse and/or to the children at home. [Refer to “Income Allowances, Persons With LTC Status [50605],” page 11-80]

25.3 Unconditionally Available Income [50186]

25.3.1 Rule

The applicant or beneficiary shall, as a condition of Medi-Cal eligibility:

• Make application for unconditionally available income, and• Cooperate with the EW in supplying the information requested concerning the

award determination.

25.3.2 Types

Unconditionally available income is that income which the client has only to claim and accept. This includes, but is not limited to:

• Disability insurance Benefits.



• Veterans benefits.• RSDI benefits.

Note:Applicants/recipients are not required to apply for early retirement benefits as doing so would require their agreeing to a reduced benefit.

• Unemployment insurance benefits.• PERS payoff, if client is no longer in PERS employment.

Note:[Refer to “Unearned Income,” page 57-1, for more information about these benefits and the requirements to apply for “Unconditionally Available Income”.]

25.3.3 PA

Public assistance benefits (e.g., AFDC, SSI/SSP) are not considered unconditionally available income.

25.3.4 Non-Cooperation

If certain individuals refuse to apply for and accept unconditionally available income, only their eligibility shall be affected and only they shall be ineligible.

25.3.5 Exception

A U-parent who does not cooperate, does not establish deprivation. Therefore, the second parent would be an ineligible MIA (if 21 or over and not pregnant) and the children would be MI.

25.4 Available Income [50605]

25.4.1 Rule

Income which is actually available to meet the current needs of the person/family shall be considered in the budgeting computations.



Income is considered available in the month it is received. It is considered to be received on the day it becomes available for use by the person.

25.4.2 Exception

Income apportioned over a period of time. [Refer to “Budgeting,” page 61-1.]

25.4.3 Owner

Income is considered to belong to the person who:

• Is named on a negotiable instrument• Is given cash• Receives income in kind

25.5 Unavailable Income [50515]

25.5.1 Rule

Income which is NOT available to meet the current needs of a person/family shall not be used in the budget computation.

Exception:Garnishments are considered available income. Federal and state taxes which are withheld monthly from pensions, annuities, and from other types of deferred income must NOT be considered unavailable income. Count the gross amount of pension benefits as unearned income.

25.5.2 Types

Unavailable income includes, but is not limited to:

Contributions

The portion of a contribution that is from a person who is living in the household:



• With no legal responsibility to support; for example, an unrelated adult male, adult child, a non-family member, excluded child, AND

• Used to meet that person's share of housing, utilities, food and other household costs. If actual costs are unavailable, use the income-in-kind values. This shall be the difference for the family size with the person(s) included and excluded. [Refer to “Self-Employment Income,” page 56-13.]

Board & Care

Unavailable income includes the portion of monthly income of a Medically Needy person who is residing in a licensed board and care facility which is:

• Paid to the facility for residential care and support, AND

• In excess of the appropriate Maintenance Need Level for persons living in the home.

The amount allowed shall be only what the client is actually paying the licensed board and care facility. If the cost equals or exceeds the total income, then:

• Documentation must be clear as to how the cost is being met and what amount the client actually pays.

• Do not allow that portion of charges that is paid by someone else (relatives, friends, and so on).

Example:Mr Ace. resides in a Board and Care facility and pays $700 per month for his care and support in that facility. He receives $795 per month in Social Security benefits. The Maintenance Need is $600 per month. The difference is considered unavailable income when computing the share of cost.

$700 Paid to the facility -600 Maintenance Need (effective 6/92)$100 Unavailable Income

The income deductions is the higher of Unavailable Income or the Standard Personal Care Services Income Deduction of $315. [Refer to “Pettit v. Bontá,” page 71-5



Advance Earnings

An advance or reimbursement from an employer to cover expenses which are necessary for job performance, to the extent that it does not exceed the actual out-of-pocket costs of the employee, is unavailable income.

Overpayment Adjustments

Amounts deducted from a client's benefit payment by a public or private agency for the purpose of collecting a previous overpayment of the benefit is treated as unavailable income.

Such benefits include:

• Entitlement payments.• Payments due to a beneficiary's impairment, disability, or unemployment.• Retirement, pension or annuity rights.

25.6 Exempt Income

25.7 Property Tax Refunds [50523]

Refunds or rebates of taxes on real property are exempt.

25.8 Child/Spousal Support Disregard [50554.5]

The first $50 of each month's child/spousal support, either provided voluntarily or by court order, which is received in the current month and/or paid by the absent parent in the month due, are exempt.



Note:This will allow beneficiaries to keep $50 from each month's child/spousal support payment in situations where the absent parent is paying timely, but the custodial parent receives a lump sum due to administrative procedures (e.g., the Family Support Division, garnishments, etc.)

Only one $50 disregard is allowed from the total child support payments received by the MFBU, even though child support is being received from more than one absent parent.

25.9 Public Assistance Grants [50525]

The following public assistance grants are exempt:

• CalWORKs (including CWES payments received while eligible for CalWORKs)

• CalWORKs Immediate Need Payments

• Refugee Cash Assistance (RCA)

• Entrant Cash Assistance (ECA)

• Resettlement and Match Grants from VOLAG

• King v McMahon or Ball v Swoap payments ($100 per month compensatory payment when State Hearing Decision is not timely)

• SSI/SSP

• SSI/SSP Special Circumstances payments

• SSI/SSP Emergency Loan payments

• General Assistance payments

• Cash Value of Food Stamps

• Retroactive Court Ordered payments (for example, WRL v McMahon, Lowry v Obledo).



25.10CalWORKs Employment Services (CWES) [50526]

Earnings from public service employment under the CWES program are exempt.

25.11Social Services Payments [50527]

Payments received for social services under Title XX of the Social Security Act, whether provided in-kind or as a direct payment to the individual for purchase of designated services, are exempt. This includes, but is not limited to:

• In-Home Supportive Services (IHSS)• Child care• Training and rehabilitation services

25.12Needs-Based Assistance [50529, Proc 10C]

25.12.1 General Criteria

Payments furnished by the state or any similar political jurisdiction, which meet all the following criteria, are exempt when issued:

• Regularly on a periodic basis at least once a quarter or made to a specific group or class of individuals in similar situations, and

• In cash or any negotiable instrument, and

• In an amount based on the need of the individual.

25.12.2 Exempted by Public Law

Payments made pursuant to public law which are specifically exempted from consideration in eligibility determinations, including:



• Home Energy Assistance (PL 94-385 & PL 97-385)

• Disaster Assistance (PL 93-288, PL 95-171, PL 101-707). [Refer to “Disaster Assistance,” page 25-21].

• Payments Distributed Under the Maine Indian Claims Settlement Act of 1980 (PL 96-420).

25.12.3 Other Exemptions

Payments from the following (and similar sources) are exempt:

• Short-Doyle Funds• Regional Centers for the Developmentally Disabled• Probation Departments• Cash Assistance Program for Immigrants (CAPI).

25.13Federal Housing Assistance [50529]

Federal Housing Assistance payments may be in the form of rent subsidies, loans, or partial house payments. Exempt federal housing assistance under the:

• U.S. Housing Act of 1937• National Housing Act• Title V of the Housing Act of 1949• Housing and Urban Development Act of 1965.

25.14Training Expenses [50530]

Payments for training expenses paid to individuals participating in the Department of Rehabilitation training programs are exempt.



25.15Foster Care Payments [50531]

Payments from any source, received by a foster parent for the care of a foster child are exempt, except for:

• Payments made to a foster parent when a foster child is temporarily absent from the foster home for a month or more.

• Payments made to ensure availability of a room or rooms for foster children.

25.16Adoptive Assistance Payments

Adoptive Assistance Program (AAP) payments are exempt. The four categories of assistance to adopted children with special needs are:

• Child receiving federal AAP with a cash grant—Aid Code 03• Child receiving federal AAP without a cash grant—Aid Code 03• Child receiving State-only AAP—Aid Code 04• Child receiving State-only Aid to Adoption of Children—Aid Code 04.

25.17Loans, Grants, Scholarships, and Fellowships [50533]

25.17.1 Title III Loans

Loans made under Title III of the Federal Economic Opportunity Act, Special Program to Combat Poverty in Rural Areas are exempt.



25.17.2 Title IV Student Assistance [50533]

Educational loans and grants awarded to graduates or undergraduates under Title IV of the Higher Education Act, are exempt as income, including the following student assistance programs:

• PELL Grants (formerly Basic Educational Opportunity Grants (BEOG)

• Federal Supplemental Educational Opportunity Grants (SEOG)

• Perkins Loans (formerly National Direct Student Loans)

• Stafford Loans (formerly called the Federally Insured Student Loan Program; includes subsidized and unsubsidized loans; the latter are also called Federal Unsubsidized Loans.)

• California State Scholarships (Cal Grant A)

• College Opportunity Grants (Cal Grant B)

• Occupational, Educational Training Grants (Cal Grant C)

• College Work Study

• Federal Parent Loan for Undergraduate Students (PLUS) Loans

• Federal Direct Loan Demonstration Program (phase in program, commencing in 1994; will replace Stafford Loan Program)

• Federal Supplemental Loans for Students

• Byrd Honors Scholarships

• Income Contingent Direct Loan Demonstration Program

• Special Programs for Students whose Families are Engaged in Migrant and Seasonal Farm Work (CAMP)

• Bureau of Indian Affairs Educational Assistance

• Upward Bound

• Presidential Access Scholarships

• National Student Savings Demonstration Program


• Federal Consolidation Loans

• Paul Douglas Teacher Scholarship Program

• Special Child Care for Disadvantaged

• Model Program Community Partnership and Counseling Grants

25.17.3 Other

Other loans, grants, scholarships, or fellowships awarded to undergraduate or graduate students, are exempt if:

• The award specifically limits the use of the funds for purposes other than current living needs, and

• The funds would not be available if used for any purpose other than the one specified.

25.18Victims of Violent Crimes Program[50534]

Victims Compensation payments made by ANY state are considered exempt property for nine (9) months following the month of receipt.

Clients who report the receipt of a Victim Compensation Program payment must provide verification of the source of the payment.

25.19Relocation Assistance [50535]

Exempt payments made by a public agency to a person who has been relocated due to:

• Redevelopment• Urban renewal• Freeway construction• Any other public development involving demolition or condemnation of existing

housing.


25.20Indian Claims [50537]

The following payments to Indians and to Alaskan natives are exempt:

• Payments made under Public Law 90-507 shall be considered personal property rather than income.

• Per capita payments made under Section 6 of Public Law 87-775 and 92-254.

• Per capita payments distributed pursuant to any judgment of the Indian Claims Commission or the Court of Laws in favor of any Indian Tribe.

• Payments made to Alaskan Natives under the Alaskan Native Claims Settlement Act.

Note:Income obtained from stock investments under the Act is not exempt.

Monies derived from lands held in trust and distributed by the federal government to members of the following Indian tribes are exempt. There is no limit to the amount of income which may be exempted.

• Bad River Bank of the Lake Superior Tribe of Chippewa Indians of Wisconsin• Blackfeet Tribe, Blackfeet, Montana• Cherokee Nation of Oklahoma, Oklahoma• Cheyenne River Sioux Tribe, Cheyenne River, South Dakota• Crow Creek Sioux Tribe, Crow Creek, South Dakota• Lower Brule Sioux Tribe, Lower Brule, South Dakota• Devil's Lake Sioux Tribe, Fort Totten, North Dakota• Fort Belknap Indian Community, Port Belknap, Montana• Assinboine and Sioux Tribes, Fort Peck, Montana• Lac Courte Oreilles Band of Lake Superior Chippewa Indians, Lac Courte and

Oreilles, Wisconsin• Keweenaw Bay Indian Community, L'Anse, Michigan• Minnesota Chippewa Tribe, White Earth, Minnesota• Navajo Tribe, Navajo, New Mexico• Oglala Sioux Tribe, Pine Ridge, South Dakota• Rosebud Sioux Tribe, Rosebud, South Dakota• Shoshone-Bannock Tribe, Fort Hall, Idaho• Standing Rock Sioux Tribe, Standing Rock, North and South Dakota• Seminole Indians, Florida



• Pueblos of Zia and Jemez, New Mexico• Stockbridge Munsee Indian Community, Wisconsin• Burns Indian Colony, Oregon

Monies derived from lands held in trust and distributed by the federal government to members of any other Indian tribe not listed above are exempt, up to $2000 of income per year.

25.21VISTA Payments [50538]

Payments made under the Domestic Volunteer Services Act of 1973, to VISTA volunteers are exempt.

25.22WIA Payments [50538]

Workforce Incentive Act (WIA) (replaced the former Job Training Partnership Act [JTPA] incentive payments, which include Job Corps, SPEDY and Targeted Assistance and shall be treated as follows:

25.22.1 Adults

Payments to adults specifically identified as incentive payments or training allowances shall be considered exempt, as long as such reimbursements do not exceed actual training expenses.

• If these payments exceed actual training expenses, treat the difference as unearned income.

• Earnings under WIA are treated as Nonexempt Earned Income.

25.22.2 Children

All WIA earnings of a child shall be exempt for up to six months per calendar year.

The child's WIA earnings may continue to be exempt after the six month's exemption if the child is either:



• A full-time student, or• A half-time student and the child is not employed full-time.

Other WIA payments made to a child shall be exempt at all times.

25.22.3 Verification/Information

Contact the WIA office for information concerning the program in which the client is participating, and to determine if criteria is met to exempt all or a portion of the income.

Job Corps individuals may receive either training incentive payments or earnings. Consider these payments as defined above, “WIA Payments”.

Job Corps in-kind income shall be treated as follows:

• If the individual is receiving a Job Corps training allowance (unearned income), then any in-kind income received is considered unearned income-in-kind.

• If the individual is in the work portion of the program and receiving earned income, then the in-kind income is considered earned income-in-kind.

25.23Executive Volunteers [50540]

Exempt payments for supportive services or reimbursement of out-of-pocket expenses made to persons serving in:

• Service Corps of Retired Executives (SCORE), or• Active Corps of Executives (ACE).

25.24Senior Citizen Volunteers [50541]

Exempt compensation received by beneficiaries who are 60 years of age or older or for volunteer services performed under the:

• Retired Senior Volunteer Program• Foster Grandparents Program.



• Older Americans Community Service Program of the National Older Americans Act.

If there is a question concerning the funding source, contact the agency paying the individual for further information or clarification.

25.25Senior Citizens Rent Assistance [50523]

Rebates issued according to the Senior Citizen's Property Tax Assistance Law to a renter who is 62 or older, blind or disabled is exempt income in the month received. If not used, it becomes property on the first of the following month. The amount of the rebate is based on the renter's household income.

25.26EITC [50543.5]

An Earned Income Tax Credit is exempt, whether received as an advance payment or as a tax refund.

25.27Victims of National Socialist Persecution [50536]

Payments received from the Federal Republic of Germany as reparations from the National Socialist (Nazi) Party are exempt.

Verify that the payment is a reparation payment. Some individuals receive other pensions or monies from Germany that are NOT exempt.



25.28Japanese-American and Aleutian Restitution/Reparation/Redress Payments

Restitution/reparation/redress payments made to Japanese-Americans and to Aleuts (or if deceased, to their survivors) who were interned or relocated during World War II are exempt. Interest resulting from these funds is counted as unearned income in the month the interest is posted. Verification is required.

The exemption includes any Japanese Reparation payments made by the Canadian government.

25.29Austrian Social Insurance Payments

25.29.1 Description

Payments made according to the Austrian General Social Insurance Act (GSIA), paragraphs 500-506, are exempt. Paragraphs 500-506 authorize payments to persons who suffered a loss resulting from imprisonment, flight from Austria, or other reasons related to political, religious or ethnic persecution, during the period from March 1933 through May 1945.

Note:Austrian social insurance payments received for other reasons are not exempt.

25.29.2 Interest

Interest accrued from retained GSIA payments are not exempt, unless another income exemption applies, such as irregular or infrequent income.

25.29.3 Verification

To exempt an Austrian GSIA payment, the client must provide:



• A copy of the check or check stub showing an Austrian pension payor, and

• An award letter from an Austrian pension insurance agency which includes the following or equivalent language, “the regulations which give preferential treatment for persons who suffered because of political or religious reasons or reasons of origin were applied (Section 500FF ASVG)”, or

• If the client is unable to provide an award letter with the above language, obtain an SC 101 from the client stating that he/she was imprisoned or unemployed in, or forced to flee from Austria during the period 1933-1945 because of political or religious reasons, and that the Austrian check represents compensation according to Section 500FF ASVG of the GSIA.

25.30Filipino Veterans Equity Compensation Fund

Division A, Title X, Section 1002 of the American Recovery and Reinvestment Act (ARRA) signed on February 17, 2009, provides a one-time only payment from the Filipino Veterans Equity Compensation Fund in the amount of:

• $9,000 for eligible persons who are not U.S. citizens, or• $15,000 for eligible persons who are U.S. citizens.

Note:The one-year claim for benefits application period ends February 16, 2010. Therefore, qualified individuals may receive payments after February 16, 2010.

In the event an eligible person filed a claim for benefits and dies before payment is made, the payment shall be made to the surviving spouse, if any.

These payments are exempt as income in the month of receipt and may not be used to compute the Medi-Cal share-of-cost (SOC). Any interest earned on these funds is considered unearned income in the month of receipt.

The applicant/beneficiary is responsible for providing verification of these payments through grant award letters, claim forms or other documents. If the client is unable to provide documentation, advise the client or their representative to contact the Department of Veterans Affairs at (800) 827-1000 to obtain written verification.



25.31Veterans' Aid and Attendance - Not In LTC

Veteran's Aid and Attendance (A&A) benefits paid to veterans who are NOT residing in long-term care shall NOT be treated as income. A&A payments are considered to be a “third party payment” for in-home care and are exempt as a reimbursement. A&A benefits paid to veterans who are not in LTC are not counted when determining the Share of Cost.

Note:A&A payments which are retained after the month of receipt are considered property.

25.32Post 9/11 GI Bill Books and Supplies Stipend

Under the provisions of the Post 9/11 GI Bill, the annual books and supplies stipend of $1,000 is paid directly to the veteran on a proportional basis based on enrolled units. If the client is eligible for Aged Blind and Disabled Medically Needy program (ABD MN), this income is exempt. [Refer to “Veterans Educational Benefits,” page 57-18]

25.33Agent Orange

Payments made to veterans who have illnesses resulting from their exposure to Agent Orange are exempt.

• Verification is required.• [Refer to “Personal Property,” page 46-1 for property information.]• Interest resulting from these funds is nonexempt unearned income.



25.34Disaster Assistance

Disaster assistance payments, whether in cash or in-kind, regardless of the date of receipt, received from federal, state or local government agencies, or from disaster assistance organizations, are exempt. Additionally, any interest earned from such payments is exempt.

25.35Susan Walker v. Bayer Corporation Payments

25.35.1 Description

Susan Walker v. Bayer Corporation payments are a result of a class action lawsuit and are paid to persons who received contaminated blood products in the process of medical treatments.

Payments made from any fund established pursuant to the settlement in the case of Susan Walker v. Bayer Corporation are exempt.

• Verification is required.• [Refer to “Susan Walker v. Bayer Corporation Payments,” page 46-45 for

property information.]• Interest resulting from these funds is nonexempt unearned income.

25.36Quilling v. Belshe Payments

25.36.1 Description

Quilling v. Belshe payments are a result of a class action lawsuit and are paid to persons who incurred out-of-pocket medical costs for the purchase of methadone maintenance treatment services during the period from July 1, 1993 - June 30, 1994, and for a few individuals during the period from July 1, 1992 - June 30, 1993.



Quilling v. Belshe payments are reimbursements (not income) and are treated as property. [Refer to “Quilling v. Belshe Payments,” page 46-45 for property information.]

Interest resulting from these funds is nonexempt unearned income.

25.37 Compensation in Accordance with the National Defense Authorization Act of 1997

Payments made in accordance with the National Defense Authorization Act of 1997 to persons captured and interned by North Vietnam is exempt as income in the month of receipt. Interest earned from these funds is counted as unearned income in the month the interest is posted. Refer to Section 46 for treatment of property.

These payments may be made in the form of a check from “The Lost Army Commando Trust Fund” and the recipient should also have a letter from the Office of the Assistant Secretary of Defense that identifies the payment as having been made in accordance with the National Defense Act of 1997.

25.38 Ricky Ray Hemophilia Relief Fund Act Payments

This act provides for compassionate payments with regards to individuals with blood-clotting disorders such as: hemophilia and those who contracted the human immunodeficiency virus due to contaminated blood products in the process of medical treatment.

Payments made from this fund are exempt as income in the month of receipt. Interest earned from these funds is counted as unearned income in the month the interest is posted. [Refer to “Personal Property,” page 46-1.]



25.39Gifts to Children With Life-Threatening Conditions

In-kind gifts of any amount or cash gifts up to $2,000 in a calendar year are exempt as income in the month of receipt if given by a tax-exempt organization to a child under 18 who has a life-threatening condition. For purposes of this exemption, a child under 18 is a child who has not yet reached his/her 18th birthday at the time of gift issuance. [Refer to Section 46 for treatment of property.]

To verify the life-threatening condition, obtain a written declaration from the adult(s) legally responsible for the child that states that the child has a life-threatening condition and that briefly describes the general nature of the condition. If the verification is questionable, the EW may require verbal or written corroboration from a physician.

To verify if the organization making the gift meets the requirements of a tax-exempt organization, the EW must obtain a copy of the organization’s IRS 501(c) exemption certification.

25.40 Radiation Exposure Compensation Payments

The Radiation Exposure Compensation Act of 1990 provides payments to some individuals who were exposed to radiation during nuclear testing in Nevada during the 1950s and a brief period in 1962.

In addition, the Act covers some individuals employed in uranium mines during the period of January 1, 1947, to December 31, 1971.

Payments from this fund are treated as exempt lump-sum income in the month of receipt. Interest income earned (as a result of keeping the funds in a bank account) from these payments is counted as unearned income in the month the interest is posted. [Refer to Section 46 for treatment of property.]



25.41Compensation for Participating in Clinical Trials

Public Law 111-255, signed October 5, 2010 provides for an exclusion under the Supplemental Security Income program and the Medicaid program for compensation provided to individuals who participate in clinical trials for rare diseases or conditions.

The first $2,000 per year of compensation received by the client and/or his/her spouse for participating in this type of clinical trials must not be counted as income and property.

Note:Any compensation over $2,000 per year should be treated as unearned income. Interest income earned (as a result of keeping the funds in a bank account) from these payments is counted as unearned income in the month the interest is posted.

The trial must meet ALL three criteria in order for the exclusion to apply:

• It must be reviewed and approved by an Institutional Review Board (IRB).

• It must involve research and testing of medical treatments.

• It must target a rare disease or condition.

25.41.1 Verification

The Informed Consent Form

The informed consent form is primary evidence and provides most of the information needed to determine whether the income exclusion applies. The informed consent form must be requested from the clinical trial participant. If the participant does not have the informed consent form, instruct him or her to obtain a copy from the clinical trial administrator.

Note:Some clinical trial participants may submit an official letter from the administrator of the clinical trial which provides all the relevant information of the informed consent in a summarized format. This letter can be used in lieu of the informed consent form.



Department of Human and Health Services (HHS) regulations dictate that IRBs must approve all informed consents; therefore, an informed consent form can be accepted as a proof that an IRB reviewed and approved the clinical trial.

The Informed Consent Form is NOT availableI

If the informed consent form is unavailable, request any of the following information from the clinical trial participant:

• Name and location of the clinical trial,• Name of disease or condition, or • Name, phone, and address of the clinical trial administrator.

Use the information provided by the participant to locate the clinical trial in the http://clinicaltrials.gov website, a registry of federally and privately supported clinical trials conducted in the United States and around the world. It provides information about a trial's purpose, who may participate, locations, and phone numbers.

If the clinical trial appears in the website, assume it is IRB approved. All clinical trials in the United States, involving human subjects, must meet federal regulations by having an IRB review and approve the research.

Once it is established that clinical trial is approved by IRB, look for the following details in the clinical trial information to determine if the clinical trial meets the other two exclusion requirements:

• Name of the condition, and• Type of clinical trial, which is usually listed under the primary purpose, the title,

or stated in the purpose summary.

Follow the instructions in this table:

If Then

The clinical trial does NOT involve research and testing of treatments

The income exclusion does not apply.


http://clinicaltrials.gov


25.42In-Home Care Payments

Wages paid to a household member is exempt income and property when both of the following conditions are met:

• The caregiver is being paid for providing the in-home care to his/her spouse or minor child (i.e., under 21) living in the home, and

• The spouse of minor child is receiving those in-home services through any federal, state of local government program.

25.43IHSS Plus Waiver Payments

The IHSS Plus Waiver program was implemented on August 1, 2004. It is a federal waiver that provides in-home services to federally funded full scope Medi-Cal recipients that were previously provided through the IHSS Residual program.

Payments made under the waiver are exempt as income for all Medi-Cal programs. The exempt payments include:

The clinical trial involves research and testing of treatments

Proceed to verify whether the clinical trial targets a rare disease or condition.

Some commonly known rare diseases are Lou Gehrig’s disease, Crohn’s disease, cystic fibrosis, cystinosis, Duchenne muscular dystrophy, Huntington’s disease and Tourette syndrome. For more comprehensive list visit the Office of Rare Disease Research database at: http://rarediseases.info.nih.gov

The clinical trial does NOT targets a rare disease or condition,

The income exclusion does not apply.

The clinical trial targets a rare disease or condition,

The income exclusion applies.

If Then


http://rarediseases.info.nih.gov/


• Caretaker wages paid to a parent for providing in-home services to a minor child under age 21;

• Wages paid to a spouse who provides in-home services to his/her spouse;

• Restaurant meal allowances made to the IHSS Plus Waiver recipient;

• Advance payments made to the IHSS Plus Waiver recipient to pay the caregiver directly.

25.44Interest and Dividend Income

25.44.1 Exempt

Interest or dividend paid to an individual from his or her Medi-Cal countable property is exempt income for Medi-Cal programs that uses SSI methodology such as:

• ABD-MN• TB program• 250% Working Disabled Program• Pickle (including DAC, Disabled Widower, etc.)• Medicare Savings Program (QMB, SLMB, QI-1)• Aged and Disabled Federal Poverty Level (A&D FPL) program.

This exemption applies to all eligibility determinations and redeterminations starting 8/1/05.

25.44.2 Nonexempt

Interest or dividends paid to an individual are counted as income arising from countable and excluded property.

25.44.3 Example

A family consisting of a married couple with two mutual children is being evaluated for AFDC-MN as there is U-parent deprivation. The family receives a monthly $9 interest payment from the couple’s countable property. This monthly interest is



countable because the exemption does not apply to AFDC-MN. If the father is disabled (rather than unemployed), the interest income is exempt as there is an ABD-MN member in the MFBU.

25.452009 ARRA Making Work Pay Credit

The American Recovery and Reinvestment Act (ARRA) of 2009 allows a tax credit (Making Work Pay Credit) for the 2009 and 2010 tax years in an amount equal to the lesser of:

• 6.2% of the earned income, or• $400 ($800 for joint returns).

Note:The amount of this credit may be adjusted downward depending on the individual’s modified adjusted gross income for the tax year.

All credits/refunds allowed under ARRA shall be exempt as income for the month of receipt for the purpose of determining Medi-Cal eligibility and share-of-cost (SOC). This will not apply to tax years beginning after December 31, 2010.

Applicants or beneficiaries who report the receipt of a tax credit or refund must be asked if all or part of their payment is from “Making Work Pay Credit.” The client must provide verification from the Internal Revenue Service or tax documents to verify the amount of the credit/refund.



25.46Misc. Income Information

25.47Income In-Kind

25.47.1 Definition [50509]

Any voluntary support or maintenance received in kind from a person other than a responsible relative for:

• Housing• Utilities• Food

Note:Effective March 9, 2005, “clothing” was eliminated from the definition of In-Kind Support and Maintenance for the SSI program. As a result, In-Kind amounts for clothing were eliminated from all programs that follow Medically Needy (MN) rules and SSI rules (Pickle, 250% WDP, etc.). Income-In-Kind for clothing for the Section 1931(b) program remains unchanged.

If received for any other item, it shall not be considered income in-kind; e.g., making car payments for client.

The entire item of need must be provided. Should client pay any portion of the need item there is no income in-kind. It is then considered a partial item of need.

Example:One-half of Mr. Smith's rent is paid for him. As the entire item of need is not met, no income In-Kind is considered.

Example:25-year-old Ms. Jones states at application that her parents buy all of her food for her and she does not have to purchase any from her own funds. As the entire item of need is met, In-Kind income for food is considered in the share of cost determination.



Income In-Kind may be earned or unearned and is subject to all appropriate income exemptions and deductions.

25.47.2 Treatment of Income In-Kind [50511]

For earned or unearned income in-kind, use the actual cost or net market value of the item, or value per chart, whichever is less.

Example:1 person MFBU receiving In-Kind housing

Actual Value $125.00

Value per Chart 146.00 (effective 7/1/88)

Amount to be used in share of cost determination is $125.00 as it is the lesser amount, as long as the actual cost is verified.

[Refer to “Income In Kind,” page 25-32 for verification instructions of income in-kind.] If the item of need is shared with persons who are not in the MFBU and who are not responsible for members of the MFBU, then the value of the item to MFBU member is their share of actual cost or net market value of item, or value per chart whichever is less.

Example:Adult client and her sister share an apartment and their parents pay the rent. Total rent is $600 and client's share is $300.The actual cost to client is $139 and this amount is compared to the chart value of $300.00. Use $139.00 in budget computation as it is the lesser amount.

25.47.3 Exceptions [50509]

Income in kind is not to be considered as income in the following situations:

• When board and lodging is received during a temporary absence from the home of one month or less.

• When income in kind is received from a parent and:

• The child has applied for Minor Consent Services.



• The child is an unmarried minor parent and the share of cost is being determined for the MFBU that includes the child's child(ren).

• The child is an unborn, unless the mother (over 21) is receiving income in kind and then there would be income in kind to the unborn.

• The child (age 20 or under) is living in the home.

• When income in kind is received as a loan, the loan agreement is verified in writing, and the provider agreement is on file in the case record.

25.47.4 Value of Income In-Kind

[Refer to Chart Book, “Current Income In-Kind Values [50511, 50511, MEPM 10 F-1],” page 5-27.]

25.48Income Verification

25.48.1 Unearned Income

Verify unearned income by viewing:

• Check or copies of checks (Note: client is only required to provide one paystub).• Award letters• Signed statements from persons or organizations providing the income• Check stubs• Statement from financial institution when income is directly deposited into

client’s account

If client receives income from U.S. Government and items listed above are not available, EW must:

• Obtain “General Affidavit” (CSF 2) from person completing the MC 210 (Medi-Cal Statement of Facts) stating source and amount of income, AND

• Ensure that other acceptable verification (noted in bullet list immediately above) is provided within 30 days.



When available, scan a copy into IDM; otherwise, thoroughly document on MC 210 (Medi-Cal Statement of Facts) and/or Maintain Case Comments window, all necessary information.

Example:“Viewed check for 1/07 from Railroad Retirement Board for $379.50, payable to Anthony Ames.”

Example:“Viewed statement from Wells Fargo Bank, Los Gatos Office, account #1793625, showing automatic deposit from Social Security Administration of $643.00, on 2/1/07.”

Unearned income shall be verified prior to approval, and at each reapplication, restoration, or redetermination, except for income received from U.S. Government when the amount reported has:

• Been previously verified in bulleted list above, AND

• There is no reason to anticipate the amount may have changed (i.e., cost of living increase received, Medi-care buy-in stopped or started).

25.48.2 Income In Kind

• Verification is required only for the items of need which the applicant is claiming have a lower value than the established chart values.

• The EW shall explain the income in-kind chart values and document the client’s choice, actual or chart.

• When using the actual value of income in kind, verification is required prior to approval and at each redetermination, restoration, or reapplication.

25.48.3 Earned Income

Verify earned income by viewing:

• Pay check stubs (Client is only required to provide one pay stub).

• Signed statement from the employer verifying the amount and frequency of payments

• Records kept by client for tax purposes if self-employed



When available, scan a copy via IDM, otherwise, thoroughly document on MC 210 (Medi-Cal Statement of Facts) or Maintain Case Comments window, all necessary information.

Example:“Viewed weekly pay stub received Friday, 1-25-07, from George’s Grocery Supply for week ending 1-18-07. Client employed 24 hours, earns $7.33 hourly, gross $175.92.

Earned income shall be verified prior to approval and at redetermination, restoration or reapplication

Note:If attempts to verify earnings by both the client AND the EW are unsuccessful, a “General Affidavit” (CSF 2) may be completed by the client and signed by the EW. Document all attempts to verify earnings on the Maintain Case Comments window.

25.48.4 Income Deductions

Verification can be made by viewing receipts and/or cancelled checks for:

• Child care costs.• Cost of care for an incapacitated person while someone else is employed.

Deductible expenses for maintenance or improvement of income producing property shall be verified by viewing:

• Actual receipts for such services.• Signed statement from the person providing the goods or services verifying the

nature and cost.

Guardian and conservator fees when certain conditions are met. [Refer to [Refer to “MFBUs Which Include Aged, Blind, or Disabled MN Persons [50549],” page 57-8]

These will be verified prior to approval of the deduction.



25.49Medi-Cal “In Home Supportive Services” Cost As a Deduction from Any Income

ABD-MN persons who are paying for their own “in home supportive services” may use this payment as an income deduction for Medi-Cal, if these services are provided by someone other than a relative. Most of these persons are SSI-SSP income eligibles who have been denied Department of Social Services-In Home Supportive Services (DSS-IHSS) because their income is sufficient to purchase these services. Others may be eligible for DSS-IHSS, but prefer to pay a higher salary than that given by “regular” DSS-IHSS. Referrals to “regular” DSS-IHSS are still appropriate for those who wish to apply. [Refer to “In-Home Supportive Services (IHSS),” page 51-1.]

25.49.1 Who Is Eligible for this Special IHSS Deduction?

Eligible persons are:

• Aged, blind or disabled and

• Living independently or with others not in LTC, or Board and Care. (Check the Social Security SDX for the living arrangement code. Codes “AB” and “BB” are not eligible.) and

• Paying an unrelated person to provide “in home services”, and

• Not eligible for/do not want DSS IHSS services.

25.50Treatment of Child Support Arrearage Payments

All current, delayed, and arrearage non-exempt child support payments provided either voluntarily or by court order are considered unearned income per California Code of Regulations, Title 22, Division 3, Section 50507 (a) (14). Child support is not considered to be a nonrecurring lump sum social insurance payment as described in California Code of Regulations, Title 22, Division 3, Section 50455.



25.50.1 Current Child Support Payments (Not Arrearages)

A current month child support payment that is received timely is considered income to the child.

• A $50 disregard is allowed from current child support payments.

• One-third of the current child support payment made to a disabled child shall be disregarded pursuant to California Code of Regulation, Title 22, Division 3, Section 50549.1.

25.50.2 Delayed (Past Month) Payments Paid Timely But Received In A Subsequent Month (Not Arrearages)

• Past month child support payments that were paid timely but received in a subsequent month for a child under 18 years of age are considered income to the child.

• In order for a disregard to be applied for past month payments, both of the criteria listed below must be met:

(1) The payments for past months are received by the Medi-Cal Family Budget (MFBU) family member in the current month, and

(2) The past month payment was made by the absent parent in the month the payment was due. (See example below.)

Per California Code of Regulations, Title 22, Division 3, Section 50554.5, child support payments shall be considered to meet the two conditions above. This shall occur only in cases where the absent parent makes payments required in a court ordered agreement with the Local Child Support Agency (LCSA), voluntary payment schedule, or other such document which establishes a duty to pay child support. Disregards are not to be allowed on delayed past month payments unless the following criteria are met:

1. The agreement or court order specifies a payment schedule which requires annual, semi-annual, quarterly or other multiple month payments for reasons other than payment of past due amounts.

2. Payment is made but not received due to circumstances beyond the control of both the absent parent and the MFBU family member. Such circumstances include, but are not limited to the following:



• Payment is made timely to the LCSA or court and not passed on to the MFBU family member until a subsequent month.

• Payment is made through payroll deduction or garnishment of wages and is not forwarded to the MFBU family member until a subsequent month.

Child 18 or Older

For a child over 18 years of age, whether living with a parent or not, child support payments are treated as follows:

• Any amount of the payment that the parent receives and does not give to the child is considered income to the parent.

• Any amount of the payment that the parent gives to the child is considered income to the child in the month given, and is not income to the parent.

• When a child receives a delayed, past month child support payment directly from the absent parent, the past month payment is income to the child.

• A $50 child support deduction would apply, unless the child is disabled, then one-third of the child support payment may be disregarded.

Example:In June a family member receives a child support payment for May. The absent parent made a direct payment to the LCSA on May 25th; however, the payment was not sent to the family by the LCSA until June 3rd. This is considered a delayed, past month payment, not arrearages; therefore, the disregard would be allowed.

25.50.3 Treatment of Arrearage Payments for a Child 18 or Older

Child support payments paid on behalf of a child 18 years of age or older that are not paid on time are treated as follows:

• Any amount of the payment that the parent receives and does not give to the child is income to the parent.

• Any amount of the payment that the parent gives to the child is income to the child in the month given, and is not income to the parent, unless given to the child in a later month.



• When a child receives a child support arrearage payment directly from the absent parent, the arrearage payment is income to the child.

• The $50 or one-third child support deduction does not apply.

Example:A non-custodial father pays child support arrearages to his ex-wife, on behalf of their 19 year old son who still lives with his mother. She receives a $300 child support arrearage payment in July 2009. The arrearage payment was supposed to have been paid in January 2008. The mother keeps $100, and gives her son $200 of the child support payment in the same month she receives the payment. The $100 the mother keeps is counted as income for her, and the $200 given to the son is counted as income for the child. Because the payment was made in July 2009 instead of January 2008, this was not a current or delayed, past month payment, therefore NO disregard amount would be allowed.

Note:Arrearages paid on behalf of a child UNDER 18 years of age are considered income when received by the parent or child and NO disregard is allowed.

25.51Earned Income

25.52Nonexempt Earned Income

Nonexempt earned income includes:

1. Wages, including amounts designated for meals provided by the employer or business, salaries, bonuses, and commissions from an employer or business enterprise.

a. Businesses that employ eight or more persons in positions that normally receive tips are to allocate eight percent of the gross receipts of the restaurant as tip income. This eight percent amount is to be disregarded.

b. Tips ARE to be counted when actually received.



c. The client must attempt to get a statement from the employer verifying the actual amount of tips received. If the employer cannot or will not provide this information, the client's sworn statement will be accepted.

Note:An advance or reimbursement from an employer to cover expenses which are necessary for job performance is “unavailable income” to the extent that it does NOT exceed the actual out-of-pocket costs of the employee.

2. Earnings under Title I of the Elementary and Secondary Education Act.

3. Earnings of an adult under the Workforce Incentive Act (WIA).

Exception:Payments to adults specifically identified as incentive payments or training allowances shall be considered exempt, as long as such reimbursements do not exceed actual training expenses. If payments exceed actual training expenses, treat the difference as unearned income. [Refer to “WIA Payments [50538],” page 54-9, for treatment of WIA payments to a child.]

4. Training incentive payments and work allowances under ongoing manpower programs other than WIA.

5. Payments under the Economic Opportunity Act.

6. Income received for providing In Home Supportive Services.

7. Net income from real or personal property which is the result of continuous and appreciable effort on the part of the applicant or beneficiary. This would include:

a. Room and board. (Use 10% of gross income as net income.) [Refer to “Self-Employment Income,” page 25-50.]

b. Room rent requiring daily work on the part of the beneficiary. (Use 10% of gross income as net income.)

c. Business enterprises. (Use self-employment procedures.) [Refer to “Self-Employment Income,” page 25-50.]

d. Sale of livestock, produce, dairy products, or other items. (Use self-employment procedures.) [Refer to “Self-Employment Income,” page 25-50.]



8. Earnings from public service employment.

Note:Wages earned through temporary employment related to the Census are considered earned income.

9. Earned income in-kind is any support or maintenance received as earned. Example: Mr. Walton receives free housing and utilities in exchange for odd jobs she does for the apartment managers. All appropriate earned income deductions are allowed (e.g., 90, child care, etc.).

25.52.1 Temporary Worker's Compensation

1. Temporary Worker's Compensation (TWC) or Temporary Disability Indemnity (TDI) payments qualify as earned income when:

• Received by an AFDC-MN/MI person whose income is counted in the Medi-Cal budget, and

• This person continues to be employed by the employer for whom they were working when the injury incurred.

TWC and TDI become unearned income when the EW discovers that:

• The person was notified in writing by the employer that they will no longer be able to offer employment to that person or that employment was being terminated, or

• The person notified the employer, orally or in writing that the person does not intend to resume employment with that employer, or

• There is other evidence indicating that the employer-employee relationship no longer exists.

• The TWC/TDI becomes Permanent Worker's Compensation. [Refer to “Nonexempt Unearned Income [50507],” page 57-1.]

25.52.2 State Disability Insurance Benefits

State Disability Insurance (SDI) Benefits (a.k.a. DIB) are paid to eligible persons under the Employment Insurance Code. These benefits are for persons who meet the applicable disability criteria.



• AFDC-MN/MI Persons DIB is to be considered earned income for AFDC-MN/MI persons only. Eligibility for the work related disregards must be explored. This includes the $90 WRE, and dependent care. If the client is eligible for any of these disregards, they must be allowed against the DIB income.

Note:When a client is receiving a disability benefit from a source other than the State Disability division, it is to be considered unearned income.

• ABD Persons DIB is to be considered unearned income for ABD persons.

Note:When there is both an AFDC-MN/MI person and an ABD-MN person in the MFBU, the EW must look at the linkage of the person who is receiving the benefit to determine how to treat the DIB.

25.53Exempt Earned Income

25.53.1 Irregular or Infrequent

Earned income not exceeding $30 per calendar quarter shall be exempt if either of the following conditions are met:

• The income is received not more than twice per quarter.• The income cannot be reasonably anticipated.

25.53.2 Student Exemption

Earned income, including earnings from WIA after the initial six months' exemption has expired, of an AFDC-MN or MI child shall be exempt if the child is either:

• A full-time student, or• A part-time student with a school schedule that is equal to at least one-half of a

full-time curriculum, and who is not employed full-time.



Note:A student, 18-21 years old, applying for or receiving Medi-Cal on their own behalf, is considered an adult and the student exemption is NOT applicable.

25.53.3 Student Exemption Definitions

School attendance is defined as enrollment and attendance in a school, college, university, or in a course of technical or vocational training designed to fit the child for gainful employment. It includes participation in the Job Corps program under the Economic Opportunity Act.

A full-time student is one who has a school schedule equal to a full-time curriculum as defined by the school attended.

Part-time employment is defined as less than 173 hours per month.

25.53.4 Who is Eligible

The student exemption applies to full-time or part-time earnings between school terms or during vacation periods, if the child plans to continue as a student the next term or at the end of the vacation period.

25.53.5 Child Under 14 Years

Earnings of a child under 14 shall be exempt.

25.53.6 Earned Income Tax Credit

Any Earned Income Tax Credit received is exempt, whether received as an advance payment or as a tax refund.



25.54Deductions from Earned Income

25.54.1 MFBUs Which Include Aged, Blind or Disabled MN Persons [50549]

The following deductions shall be subtracted from the nonexempt earned income of MFBUs which include aged, blind or disabled MN persons. These deductions are applied only if a member of the MFBU applies and is found eligible as aged, blind or disabled. Each deduction shall apply only to the income specified.

In addition, effective April 1, 2005, Section 432 of the Social Security Protection Act extended the Student Earned Income Exclusion (SEIE) to all individuals in the budget unit who are working students under the age of 22, including those that meet the Supplemental Security Income program’s definition of a child.

Deductions must be taken from the earned income of each student who is under the age of 22, who is regularly attending school, and who is in the MFBU of an aged, blind or disabled individual. SEIE will apply to the earnings from an ineligible spouse or parent(s). It will also apply to the joint earned income of eligible couples who are both working students and under age 22.

The amount of the student income deductions increased in accordance with the table below.

For Year Monthly Exclusion Maximum Exclusion for Calendar Year

2001 $1,290 $5,200

2002 $1,320 $5,340

2003 $1,340 $5,410

2004 $1,370 $5,520

2005 $1,410 $5,670

2006 $1,460 $5,910

2007 $1,510 $6,100

2008 $1,550 $6,240

2009 $1,640 $6,600



Student Deduction [50551]

1. A maximum of $1,620 per calendar year shall be deducted from the nonexempt earned income of a blind or disabled person who is all of the following:

a. Under age 22, and

b. Not now married, and

c. Not a parent, and

d. Enrolled or will be enrolled in a school for at least 8 hours per week during one month of either:

(1) Current calendar quarter, or

(2) Next calendar quarter.

2. The deduction of $1,620 shall be applied beginning at the end of each year until exhausted.

“Any Income” Deduction [50551.2]

1. That portion remaining from the “any income” deduction noted in the unearned income section [Refer to “Unearned Income,” page 57-1], is the amount of the deduction. (It could be $20, if there is no unearned income.)

2. This applies to the combined nonexempt earned income of either:

a. The ABD-MN person, or

b. The spouse of the ABD-MN person, OR

c. The parent of the ABD-MN person.

2010 $1,640 $6,600

2011 $1,640 $6,600

2012 $1,700 $6,840

2013 $1,730 $6,960

2014 $1,750 $7,060

For Year Monthly Exclusion Maximum Exclusion for Calendar Year



Court-Ordered Spousal or Child Support [50554]

1. Court-ordered spousal or child support, or child support paid pursuant to an agreement with the district attorney, shall be deducted from the income of an MFBU which includes an ABD-MN beneficiary when it is actually paid by someone in the MFBU.

2. The amount deducted shall be the lesser of the amount:

a. Actually paid.

b. Specified in the court order or agreement with the district attorney.

3. Voluntary support payments are not an allowable deduction.

Sixty-Five Plus One-Half [50551.3]

1. The first $65 plus 1/2 of the remainder shall be deducted from the combined nonexempt earned income of all aged, blind or disabled persons and the spouse or parents of those persons.

2. There is no additional deduction for work-related expenses (WRE) or mandatory deductions. These are included in the $65 plus 1/2.

Exception:[Refer to “Work Expenses of the Blind [50551.4],” page 25-44.]

Work Expenses of the Blind [50551.4]

In addition to the $65 plus 1/2 deduction, a blind person shall be allowed a deduction for the actual cost of work related expenses from the nonexempt earned income.

This includes child care, clothing, tools, materials, licenses, personal incidentals, food, lodging, union or employee association dues, employment agency fees and transportation when required for employment.

Income Necessary to Achieve Self-Support [50551.5]

1. This deduction applies ONLY to a blind or disabled person's earned or unearned income. Only the amount necessary to implement and maintain the plan is deducted.



2. The deduction may equal the amount of earned or unearned income if the plan for self-support:

a. Is in writing (a copy of the plan must be obtained), AND

b. Was initiated and approved while the person was receiving SSI/SSP, AND

c. Has not been subsequently abandoned. Current receipts and a sworn statement are necessary to show active participation.

Note:A plan is drawn up between SSA and the SSI recipient. If the person continues to follow this plan after SSI discontinuance, the income spent on the plan can be deducted.

Cost of In-Home Supportive Services— ABD-MN and Substantial Gainful Activity Disabled (SGA) [50551.6]

In-Home Supportive Services means those services which may be provided under the IHSS program.

1. The amount actually paid for in-home supportive services provided to any ABD-MN person or to a SGA-disabled person shall be deducted from the combined nonexempt income of the SGA-disabled or ABD-MN person and the responsible relative.

2. The cost of in-home supportive services shall be a deduction only when the services are:

a. Provided by a person other than a family member living in the home, and

b. Determined to be necessary pursuant to an IHSS needs assessment.

3. For ABD-MN persons, the provisions of this section shall be limited to persons who, without in-home supportive services, would require 24-hour-a-day care in a health facility or community care facility verified by a signed physician's statement.



25.54.2 AFDC-MN, MI, or Ineligible Members of the MFBU [50553]

The following deductions shall be subtracted, IN SEQUENCE, from the nonexempt gross earned income of each AFDC-MN or MI person, or persons who are ineligible members of the MFBU. An AFDC-MN or MI person, or an ineligible member of the MFBU, shall NOT receive these deductions if they are included in the same MFBU as their aged, blind or disabled spouse or child.

Deduction for Work-Related Expenses (WRE) [50553.1]

Effective October 1, 1989, ninety dollars ($90) for mandatory deductions and work-related expenses shall be deducted from the earned income of EACH AFDC-MN or MI person.

Dependent Care

A person shall be eligible for a deduction for dependent care when:

• The person has reasonable and necessary costs of obtaining child care for a child in the MFBU or care for an incapacitated person in the MFBU, AND

• The EW determines that adequate dependent care cannot be provided by another member of the MFBU.

Note:This deduction will generally not be applicable against Disability Insurance Benefits (DIB) because the DIB recipient will be available to care for the children. It is allowable only if there is no other family member able to care for the child(ren) and the DIB recipient is too disabled to care for the chil(dren).

Effective October 1, 1989, the amount deducted shall be the actual amount paid as limited by the following:

• A maximum of $200 per child under two years old.

Note:The EW will need to set a case alert for the month prior to the child's second birthday, in order to change the deduction for dependent care.

• A maximum of $175 per child two years of age or older. • A maximum of $175 per incapacitated person.



This deduction shall also apply when the care is provided by a member of the MFBU, other than a spouse or parent, who terminated employment specifically to provide the necessary care.

Spousal or Child Support

Court-ordered spousal or child support, or child support paid pursuant to an agreement with the district attorney, shall be deducted from the income of an AFDC-MN or MI beneficiary when it is actually paid by that beneficiary.

The amount deducted shall be the lesser of the amount:

• Actually paid.• Specified in the court order or agreement with the district attorney.

Note:Voluntary support payments are not an allowable deduction.

25.54.3 All MN or MI Programs [50555]

The following deductions shall be subtracted from any nonexempt income that remains after the application of all preceding exemptions and deductions.

1. Income of an MN or MI person used to determine public assistance eligibility of another family member.

a. That portion of income of an MN or MI person or a person responsible for the MFBU, which is counted in determining the eligibility of a spouse, parent, or child as a public assistance (PA) or other PA recipient shall be deducted.

b. Income of a stepparent and the value of income in-kind provided by a stepparent which is counted in determining the eligibility of a spouse or stepchildren as PA or other PA recipients shall be deducted.

Note:This computation must also be done when one or more family members receives an SSI/SSP grant or IHSS. These persons are not included in the MFBU, but the computation must be done to determine how much of the family's income was used to compute their SSI/SSP grant or IHSS eligibility. This amount of income is called an “Allocation to SSI/SSP or IHSS recipient” and is deducted from the nonexempt income of the MFBU. The actual computation is completed on the MC 176 W, Part II.



2. Health Insurance Premiums [50555.2]

a. When verified, health insurance premiums shall be deducted if paid by and purchased for any family member.

b. If the premium is paid less often than monthly it shall be averaged on a monthly basis.

Example:$66.00 premium paid quarterly $66.00 / 3 = $22.00 per month is the allowable deduction.

c. Health insurance premiums paid for by a nonfamily member are not an allowable deduction; e.g., absent parent.

d. Medicare Premium, Part B, shall be deducted when actually paid by the client.

Note:An appropriate case alert shall be set up to watch for “buy-in.” [Refer to “Other Health Coverage,” page 12-1.]

3. Allocation to Excluded Children

The rules for allocation income deduction to excluded children apply to any Medi-Cal program including the Section 1931b.

1. This deduction is applied only when children who have separate income and/or property have been excluded from the MFBU.

2. The amount of the deduction is equivalent to the difference in the maintenance need with the children in or out of the MFBU, minus any income of the excluded child/children. Example: The family consists of a stepfather, his wife and wife’s two separate children. The family decides to exclude the eldest child from the MFBU because the child receives $165 gift from his natural father each month. The Section 1931b income standard for 4 is $1571 and $1306 for 3 (excluding the eldest child). The difference ($265) less the child’s own income of $165 is equal to the child’s unmet need of $100, which is allowed as an “income allocation” deduction for the excluded child, towards the MFBU’s budget.

3. If the children have enough income to meet their own needs based on this computation there is no allocation.



25.55Stepparent Income

25.55.1 Income Deemed Available from the Stepparent [50559]

If there is a stepparent living in the home and only the parent and the parent's separate children are included in the MFBU, the income deemed available from the stepparent shall be determined as follows:

Note:The stepparent is an ineligible person.

1. The stepparent's gross earned income less the deduction for work expenses shall be combined with the stepparent's nonexempt unearned income.

2. Deduct from the above, the following amounts:

a. Amounts actually paid by the stepparent to persons not living in the home but who are claimed as dependents for purposes of determining the stepparent's federal personal income tax liability.

b. Voluntary or court-ordered spousal and child support payments made by the stepparent to persons not living in the home.

c. The maintenance need for the stepparent unit which includes:

(1) Stepparent

(2) Mutual children

(3) Stepparent's children

3. The remainder, if any, is income available to the MFBU.

4. This computation is completed on MC 176 W, Section V.

25.55.2 Treatment of Income: Stepparent Cases [50561]

If there is a stepparent living in the home and only the parent and the parent's separate children are included in the MFBU, the income considered in determining the share of cost shall be:



1. The income of the children, plus

2. The income of the parent, plus

3. The income available from the stepparent as determined above.

25.56Self-Employment Income

25.56.1 Definition

A self-employed person has direct control over their work and the services they provide. Generally, Social Security taxes and income taxes are paid by the self-employed person, and there is no Worker's Compensation coverage.

Action taken on these cases must be carefully documented. The client must cooperate in providing documentation and verification.

25.56.2 Indicators of Self-Employment

Generally, it is clear whether an individual is self-employed or not. However, there are occasional instances when it can be difficult to determine whether the individual is self-employed or working for another person or entity.

To assist Eligibility Workers (EW) in determining if an individual is self-employed, several indicators of self-employment are provided. The indicators below are listed in order of importance.

• The person or entity paying the individual for his/her services does not (and will not) deduct Social Security taxes or federal withholding from the compensation payment.

• The individual determines the scope and nature of his or her work and daily work activities, including work duration; and such activities are not supervised or determined by another person.

• If the individual is selling services (as opposed to individuals selling goods), the following guidelines apply:



• The relationship between the “contractor” (self-employed individual/provider of services) and the “contractee” (recipient of services) is based on a contract, and changes in the terms of the services provided by the contractor require changes in the contractual agreement.

• The individual (contractor) has a pattern of:

• Entering into contracts with multiple “contractees,” at the same time or in succession,

• Providing bargained-for services based on agreed upon verbal or written contract.

• When others assume no or limited liability for the individual and for his or her work, the individual may be considered self-employed.

Note:If others do assume liability, it is based on an indemnity agreement or other contractual arrangement.

• The individual does not work at someone else’s facility nor makes a substantial use of another persons’s capital; or if he or she does, it is limited to the terms of the contract.

• The individual’s employment requires that he/she own substantial equipment, which is subject to depreciation, and the individual “bargains-for” and receives compensation which reflects the cost of such depreciation.

• The individual or entity files an income tax return declaring that they are self-employed (i.e. files a Tax Form Schedule C).

The EW should give consideration to each of the above indicators in addition to any other factors that may be pertinent to an individual’s job situation.

25.56.3 Conflicting Indicators

It is possible for indicators to provide a conflicting assessment. If this occurs, the EW must weigh all the indicators and exercise his/her best judgement.



Example:An individual may not have Social Security or withholding taxes deducted from his or her compensation and yet the individual is working on another’s premises, under another’s supervision, subject to another’s directions. This scenario may occur where the employment is “under the table” or paid in cash. Generally, such an individual would NOT be considered self-employed.

25.56.4 Contractual Arrangement

Contractual Arrangement is defined as the provision of goods or services by an individual (a contractor) to another (the contractee). It is contractual if provided based on a mutual agreement in which the individual agrees to do a specific job, or produce a specified product (as specified in the agreement,) for an agreed upon price, within a specific, and limited time period. The contract can be verbal or written.

25.56.5 Determination of Property and Resources [50485]

[Refer to “Treatment of Property,” page 45-1.]

25.56.6 Income Determination [50505]

A copy of the previous year’s federal income tax return or the Federal Profit and Loss Statements filed quarterly is acceptable verification of self-employment income. Copy the tax return and appropriate schedules and file in case record. Thoroughly document in the [Maintain Case Comments] window, the method of income determination and figures used. This would include but is not limited to IRS Form:

(1) 1040, U.S. Individual Income Tax Return

(2) Schedule C, Profit or Loss from Business or Profession

(3) Schedule D, Capital Gain or Loss

(4) 4797, Supplemental gains (or losses)

(5) 1065, U.S. Partnership Return of Income

(6) Reports of rents, royalties, estates, trust, etc.

(7) Schedule F, Farm income



If the EW or the client has reason to believe that the last year’s tax return will not provide a reasonably fair or accurate estimate of the current year’s net business income (i.e. due to changes in current business expenses or flow of business), the EW should require the self-employed individual to submit records sufficient to enable the EW to estimate net self-employment income.

Follow these guidelines when using tax return forms in determining self-employment income:

If the business was... Then...

Operated throughout the previous year,

The EW may use the previous year’s net self-employment income to estimate the current year anticipated income by dividing the previous year’s net self-employment amount by 12.

Not operated throughout the previous year but it is expected to be operational for the entire current year,

The EW must divide the previous year’s net self-employment income by the number of months the business was operated from the previous year to get the net monthly self-employment income for the current year.

Example: The individual provided a tax return from the previous taxable year 2000. The EW determined that the previous net self-employment income is $12,000. The EW was informed that the business was operational for eight months in the year 2000. To estimate monthly net business income for the current taxable year (assuming the business is expected to be operational for the entire year of 2001,) divide $12,000 by eight months. The resulting amount is $1,500 (12,000 divided by 8) which becomes the anticipated net monthly self-employment income for the current year.

Allow any other appropriate earned income deductions.

Where there is no tax return for the previous year, or there is evidence that using the tax return would give an inaccurate estimation of income, compute the budget using:

• Current business records, • Documents and form, • Income Profit and Loss Statement (CSF 32), or• Any other clear and accurate record-keeping statement provided by the client.

Note:A client must not be required by the EW to file a tax return and to provide copies of such.



25.56.7 Business Expenses Allowed

To determine net profit, subtract any allowable business expense from the gross business income. Allowable business expenses are as follows:

Mandatory Expenses (Paid for Self-Employed Person's Employees)

A deduction from gross self-employment income will be allowed for the following:

1. Federal and State Income Taxes Withheld for Employees—The actual amount paid is deductible as a mandatory business expense. Taxes are paid quarterly on the calendar quarter.

2. Social Security—A deduction is allowed for the amount actually paid.

3. State Disability Insurance—A deduction is allowed for the paid amount.

Note:The payroll taxes on an employee's wages may be allowed as a deduction as paid. There must be verification and documentation that the tax liability has been met.

4. Union Dues/Association Fees—When membership in a labor union or association is a requirement for self-employment, the actual cost is allowed as a business expense.

Licenses

The cost of all licenses required for business operation is allowed as a deduction.

Advertising

The cost of business advertising is allowed as a deduction.

Bonds

The cost of providing business-related surety and performance bonds is allowed as a deduction. These are generally bonds to ensure performance of the self-employed person.



Expendable Supplies

Expendable supplies are those which are commonly used quickly or are only used for a short time. Examples include office supplies (pens, printer cartridges, notepads and stationery, paper clips, etc.), price tags, posters for special sales (as opposed to permanent signs), pins, tacks, scouring powder, etc. Expendable supplies also include such items as grease and lubricants used by a mechanic (but not gas, oil, filters, bought for resale to customers), leather softeners used in leather-craft, bottled gas used in welding or jewelry making, etc.

The actual cost of business-related expendable supplies is allowed as a deduction.

Capital Assets—Business Expenses

Capital assets are items ordinarily having a long life and not requiring frequent replacement, such as office equipment (adding machines, typewriters, staplers), furniture and furnishings (drapes, chairs, sofas, desks, counters, lighting fixtures, decorations), and major equipment and machinery (plows, freezers, tractors, air conditioners, motor vehicles), etc.

The following expenses relating to capital assets are allowable deductions under the MN program but not for Section 1931(b):

• Principal and interest payments • Sales tax• Interest or finance charges are allowed.

If a capital-asset item is commonly used for both business and non-business purposes (for example, an automobile), the household must provide adequate information to determine what portion of the expense is allowable to the business.

Maintenance and Repairs

The cost of business-related maintenance and repairs are allowed as a deduction. Some examples include janitorial supplies, janitorial services, mechanical repairs of equipment, periodic servicing of machinery, etc.

Taxes

The actual amount of all business-related taxes are allowed, including (but not limited to) sales taxes, property taxes, etc. Those taxes collected from customers (federal excise tax, sales tax) and forwarded to government agencies are a business expense.



Insurance

The cost of insurance for business property, including fire, theft, public liability and workman's compensation is allowed as a deduction.

Transportation

The client is allowed the expense of operating motor vehicles for business-related transportation (not including transportation to and from work).

Follow the IRS guidelines in determining the allowable per mileage cost. The client must own or be purchasing the motor vehicle. It cannot be leased or borrowed.

Legal or Professional Services

The actual cost of business-related legal or professional services is allowed as a deduction. Examples include attorney's fees, tax preparation or consultant fees, etc.

Merchandise/Stock/Raw Materials

The cost of merchandise, stock, or raw materials, plus interest or finance charges (if any), will be allowed as a deduction. Examples include seeds used to produce crops for sale, any materials used to produce a product for sale, and any items bought for resale (including items resold incidental to the performance of a service, such as spark plugs bought by a mechanic and sold to the customer, with a related charge of installation).

Rent or Lease Expenses

The cost of renting or leasing land, office, shop or warehouse space, equipment, automobiles/trucks, furniture, etc., used exclusively for the business is allowed. The lease, rental agreement or mortgage payment for space for the business must be reviewed. In order for this expense to be allowed this space must have been initially rented or purchased for the business.



Home-Operated Business

The prorated share of rent/mortgage payment for a room in the recipient's home is not allowed as a deduction unless specifically built or purchased for the business. If the recipient has rented a home or apartment which has extra space specifically intended to be used for their self-employment, a prorated share of the rent may be an allowable deduction.

25.56.8 Non-allowable Business Expense

A list of non-allowable expenses is added in the handbook. Certain expenses, although connected to business activities, are not considered to be directly related to the production of goods or services, and cannot be subtracted from business income for purposes of determining net business income. These non-allowable expenses include:

• Entertainment costs

• Depreciation

• Funds used to purchase business equipment/tools

• Expenditures to purchase a capital equipment

• Payments on the principal of loans that were used to purchase capital or durable goods NOTE: These are NOT allowable for MN program, but allowable for Section 1931b program.

• Personal expenses such as income tax payments, meals and transportation to and from work.

Note:An expense is considered personal when it is incurred outside direct operation of the business.



Example:The following example illustrates the difference between personal and business expense.

25.56.9 Documenting Income Determination

Thoroughly document in the case record, the method of income determination and show computations.

Allow any other appropriate earned income deductions.

Example:Mary Jane Moore does sewing and alterations in her home. She earned $400 in 2/07. Her expenses were: $53 for thread, buttons, and zippers, $96 for material, $20 for sewing machine repair and $9 for advertising in local paper. She has never filed a tax return and operates on a very informal basis. The following calculation would be done to arrive at net profit:

Personal Expense Business Expense

Client is managing his own recycling center. He buys recyclables from his customers that come to his recycling center. His daily transportation expense (from his home to his recycling center) is considered a personal expense.

Client is into recycling business. He goes from place to place to pick up recyclables (cans, papers, etc.). Since his transportation expense (i.e., gas) is directly related to doing his recycling business, it is considered a business expense.

The transportation expense that a realtor incurs from his home to his office is a personal expense.

The transportation expense that a realtor incurs to show the different homes for sale on his listings to a prospective buyer is considered a business expense.

Gross Income $400

Less Expenses $53

96

20

9 -178

----- -----

Net Profit $222



25.56.10 Net Income From Property [50515, Procedures 10G]

1. Net income from property shall be used in budget computations and shall be computed as follows on the MC 176P, Property Worksheet:

a. If the income is from the rental of real property, subtract the following expenses, as limited by (B), from the gross income:

(1) Taxes and assessments

(2) Interest on encumbrances (the principal portion is not an allowable deduction)

(3) Insurance

(4) Utilities

(5) Upkeep and repairs, using the greater of:

• The actual amount expended during the month (not a yearly average), or• Fifteen percent of the gross monthly rental plus $4.17 per month.

b. To determine whether utilization requirements are met, only the actual amount expended for upkeep and repairs during the month shall be deducted.

Note:[Refer to “Treatment of Property,” page 45-1.]

2. If the income is from the rental of a multiple unit dwelling or other dwellings on property that is exempt as the principal residence and the applicant or beneficiary is living in a portion of the property, the expenses specified in (A) above which are common to the property as a whole shall be prorated as follows:

a. Determine the number of rooms in the building. If more than one building, determine the total number of rooms. Include any room other than:

(1) Bathroom

(2) Hallway

(3) Closet



(4) Unfinished basement, loft, or attic

b. Determine the number of rooms producing the rental income.

c. Based upon the number of rooms, determine the percentage of the property which is producing the rental income.

d. Apply the percentage determined in (3) to the expenses specified in A (1), which are common to the property as a whole. This is the amount which shall be subtracted from the gross income.

3. Income received for rental of rooms, room and board, or board and care shall be determined by one of the following methods.

a. Ten percent of gross: This method is used when:

(1) A business license is not required, and

(2) The individual who receives the income routinely provides lodging, board, etc. to non-family members for additional income.

Example:Mr. and Mrs. A are Medi-Cal applicants. They live near a college and routinely rent their spare room to students. They do not have a business license and do not report the income as self-employment. At time of application, however, their adult daughter (considered to be not a family member under the Medi-Cal eligibility determinations) is using the room and is paying them $80 per month. The A's state that if the daughter were to leave, they would try to find someone else to rent the room. The net monthly income in this instance is $8.00 (10 percent of $80).

b. Net profit from self-employment: This method, which will probably be rare, is used when:

(1) The individual who receives the income has a business license, or

(2) The individual reports the income for tax purposes as self-employed, or considers the income as income from self-employment.

Example:Mrs. B has converted her house into a boarding home. She has a business license, but her yearly total income is so low that she has never bothered completing an income tax return. Her annual gross receipt from the boarding



home is $7,000; her annual allowable expenditures are $5,800. The net monthly income in this instance is $100 ($7,000 - $5,800 = $1,200/12).

c. Income in excess of contributor's share of actual costs. This method is used when:

(1) A business license is not required, and

(2) The individual who receives the income does not routinely provide lodging, board, etc., to non-family members for additional income.

Example:Mr. and Mrs. C apply for Medi-Cal on behalf of themselves and their one minor child. Mr. C's mother lives with them and gives Mr. C $100 per month to use toward meeting those household costs which directly benefit her. If the mother were not in the home, the C's would not seek another person to move into the home. The C's monthly costs are as follows:

Since there are four persons in the home, the mother's share of the actual costs is $125 ($500/4). Since her $100 contribution is less than her share of the actual costs, there is no net income to the C's. If she instead were contributing $130 per month, then the net income to the C's would be $5. If the mother lived in a room with its own kitchen, and bought and prepared all her own food, then the mother's share of actual costs would be 1/4 of $300 (rent and utilities) or $75. If the mother were contributing $100/month to the C's, the C's net income would be $25.

(3) Regardless of the method applicable to a specific case, the EW should explain to the clients the manner through which the net income is derived.

4. If the income is from a deed of trust or a mortgage:

a. The principal portion shall be treated as property, and

Rent $250

Utilities 50

Food 200

Total $500



b. The interest portion shall be unearned income.

5. The net income is the amount actually received if the income is from:

a. Property in which the person holds a life estate.

b. Personal property.

25.57Unearned Income

25.58Nonexempt Unearned Income [50507]

Nonexempt unearned income includes:

1. Retirement, Survivors, and Disability Insurance (RSDI) payments from the Social Security Administration.

2. Annuities; an amount received at regular intervals (usually monthly or quarterly) based upon an initial investment by the beneficiary.

Example:The client invests $8,986.00 with a brokerage firm. In return she will receive $70.81 per month for the remainder of her life. This amount ($70.81) shall be considered unearned income.

Reminder:The annuity must be evaluated for a property determination. [Refer to “Trusts and Annuities [Article 9J],” page 47-1 for more complete information.]

3. Pensions and Retirement Payments.

Note:The gross amount of monthly unearned income shall be budgeted. There is no deduction allowed for federal or state taxes.

4. Veteran's payments, including:



a. Pensions based on need

Note:The flat $90 pension benefits of a single veteran or their surviving spouse in long-term care (LTC) is exempt income.

b. Compensation payments

c. Aid and Attendance (A&A) payments to persons residing in long-term care facilities.

Exception:A&A payments to a veteran NOT residing in LTC are exempt. [Refer to “$90 VA Pension, Veteran in LTC,” page 11-86.] The entire A&A payment to a veteran in LTC who has a spouse and/or minor child(ren) at home is exempt. [Refer to “Post 9/11 GI Bill Books and Supplies Stipend,” page 54-14.] Only the first $90 of an A&A payment to a veteran in LTC who does NOT have a spouse and/or minor child(ren) at home is exempt. [Refer to “Post 9/11 GI Bill Books and Supplies Stipend,” page 54-14.]

d. Educational assistance, except for the veteran's contribution to the Veterans' Educational Assistance Plan. [Refer to “Veterans Educational Benefits,” page 25-79.]

e. The monthly housing allowance paid under the Post 9/11 GI Bill. [Refer to “Veterans Educational Benefits,” page 25-79.]

25.58.1 Workers’ Compensation

Permanent Workers’ Compensation is considered to be unearned income.

Temporary Workers’ Compensation (TWC) and Temporary Disability Indemnity (TDI) become unearned income when the EW discovers that:

• The person receiving TWC/TDI was notified in writing by the employer that they will no longer be able to offer employment to that person or that employment was being terminated, or

• The person notified the employer, orally or in writing, that the person does not intend to resume employment with that employer, or



• There is other evidence indicating that the employer-employee relationship no longer exists, or

• The TWC/TDI becomes Permanent Workers’ Compensation. Otherwise, TWC/TDI are considered earned income. [Refer to “Nonexempt Earned Income,” page 56-1.]

25.58.2 Unavailable Workers’ Compensation

The portion of Workers’ Compensation that is designated for:

• Medical expenses,• Legal or other such expenses, or• Is not controlled by the applicant, beneficiary, or person acting on their behalf,

Is considered to be unavailable income.

25.58.3 State Disability Insurance

DIB is considered unearned income for ABD-MN persons only.

Note:DIB is considered earned income [Refer to “State Disability Insurance,” page 25-64] for AFDC-MN/MI persons. When there is both an AFDC-MN/MI person and an ABD-MN person in the MFBU, the EW must look at the linkage of the person who is receiving the benefit to determine if the DIB is earned or unearned.

25.58.4 Disability Benefits Other than State

Disability payments from any source, other than State Disability Insurance Benefits (SDI/DIB) are to be considered unearned income. Some examples of this are private disability plans, Social Security benefits, etc.

25.58.5 Other Unearned Income

1. Railroad Retirement and any other payments made by the Railroad Retirement Board.

2. Unemployment Insurance Benefits. Note: Disaster Unemployment Insurance Benefit is exempt for Medi-Cal.



3. Proceeds from a life insurance policy in excess of the lesser of:

a. $1,500, or

b. The amount expended on the insured person's last illness and burial expense.

4. Loans which require no repayment must be counted as unearned income. [Refer to “Exempt Income,” page 54-1 for listing of exempt loans.]

5. Gifts.

6. Nonexempt child/spousal support, whether provided voluntarily or by court order.

7. Inheritances which are in the form of cash, securities or other liquid assets.

8. Contributions from any source.

9. Prizes and awards.

10. Net income from the rental of real property which does not meet the definition of earned income.

Example:Beneficiary rents three units of her four-plex. After subtracting allowable expenses, the remainder would be considered unearned income. Use the MC l76 P for calculation. An example of this computation is given. [Refer to “Treatment of Property,” page 45-1.]

25.58.6 Personal Property

Net income from personal property which does not meet the definition of earned income; for example, the interest portion of income from a deed of trust.

25.58.7 Dividends

Dividends paid to the owner of a life insurance policy shall be treated as unearned income. Dividends accruing to the policy shall be counted in the cash surrender value of the policy.



25.58.8 Interest

Interest payments from any source; for example, interest bearing checking and savings accounts, trust deeds, sales contracts, and so on, UNLESS it can be exempted as Irregular or Infrequent Income. [Refer to “Irregular/Infrequent,” page 25-67.]

[Refer to “Budgeting,” page 61-1 for apportionment information, if nonexempt.] For example: A client receives $75 quarterly in interest. His monthly unearned income is $25 ($75 divided by 3).

25.58.9 Royalties

Royalties which include, but are not limited to, payments received by:

• The owner of a patent or a copyright.• A person for the use of their invention.• The owner of a mine, oil well, or other similar holdings, for the extraction of the

product or other use.

25.58.10 Public Assistance

The portion of a Public Assistance recipient's income which in NOT used to determine their own grant.

25.58.11 Workforce Incentive Act (WIA)

That portion of incentive payments or training allowances made to an adult under WIA which exceeds actual training expenses.

25.58.12 Lump Sum

Any of the items listed previously in this section if received in a lump sum.

25.58.13 Other

Any other income which is available to meet current needs; for example, VOLAG payments and so on.



25.59Exempt Unearned Income [50542]

25.59.1 Irregular/Infrequent

The first $60 of casual or inconsequential unearned income per calendar quarter shall be exempt if EITHER of the following conditions are met:

• The income is received not more than twice per quarter, OR• The income cannot be reasonably anticipated.

[Refer to “Exempt Income,” page 54-1 for a complete list of the types of exempt income.]

25.59.2 Interest

Interest income from any source, including the client's checking or savings account can usually be estimated and anticipated. However, EWs can exempt the first $60 of interest which is not received more than twice per quarter.

Use the following chart to determine the treatment of certain interest payments:

IF Interest is: THEN:

Paid monthly (any amount) Include in budget as unearned income.

Less than $60 per quarter and received quarterly

Exempt the entire interest payment as “Irregular or Infrequent” income.

More than $60 per quarter and received quarterly

Exempt the first $60 of interest as “Irregular or Infrequent” income. Divide the remainder by 3 and include in the monthly budget as unearned income.



25.60Deductions from Unearned Income

25.60.1 Educational Expenses [50547]

1. Expenses incurred by an individual attending college or a similar training course shall be deducted from:

a. Any income received for educational purposes, including but not limited to:

(1) Exempt student loans, grants, scholarships or fellowships.

(2) Nonexempt student loans, grants, or fellowships which do not require repayment.

(3) Payments to a child attending school which are based on a deceased or disabled parent's entitlement (i.e., Social Security, Veterans' Benefits).

(4) Veterans' Educational Assistance Plan payments or the GI Bill.

b. Any loans received for educational purposes which require repayment and are not exempt loans, grants, scholarships or fellowships. [Refer to “Exempt Income,” page 54-1 for list of exempt loans, grants, scholarships, and fellowship.]

2. These verified educational expenses shall be apportioned over the period of time they are intended to cover to determine the monthly deduction.

Example 1:Client attends San Jose State University, which is on the semester system. He paid $475 in verified educational expenses, for the entire semester, which lasts from 8/06 through 12/06. His monthly deduction would be $475 /5 = $95 monthly.

Example 2:Client attends De Anza College, which is on the quarter system. She paid $183 in verified educational expenses for the Winter quarter from 1/07 through 3/07. Her monthly deduction would be $183/3 = $61 monthly.

3. Educational expenses include any of the following items or services necessary for school attendance:

a. Tuition



b. Books

c. Fees

d. Equipment and supplies

e. Special clothing needs

f. Child care services

g. Transportation costs to and from school.

Note:Costs of transportation to and from school shall be deducted based on the mode most economically available and feasible in the particular circumstances. If it is determined that a personal car meets this criteria, all actual transportation costs will be prorated based on the percentage of miles driven to and from school, compared to the total miles driven each month. Allowable transportation costs include, but are not limited to car payments, car insurance, vehicle registration and gasoline.

4. The verified educational expenses shall first be deducted from any totally exempt loans or grants. [Refer to “Exempt Income,” page 54-1 for a complete list.] Any remaining educational expense shall next be deducted from other educational loans which require repayment and are not exempt, and finally from other income received for educational purposes.

25.60.2 MFBUs Which Include Aged, Blind, or Disabled MN Persons [50549]

These deductions shall be subtracted from the nonexempt income of MFBUs which include aged, blind or disabled MN persons. These deductions are applied only if a member of the MFBU applied and is found eligible as aged, blind, or disabled. Each deduction shall apply only to the income specified. [Refer to “Budgeting,” page 61-1 for budget examples showing the following deductions]:

Support Payment from an Absent Parent [50549.1]

One-third of any payment made by an absent parent for the support of a disabled or blind child shall be deducted from the total payment.



“Any Income” Deduction—Unearned Income [50549.2]

1. Twenty dollars shall be deducted from the combined nonexempt unearned income of all aged, blind or disabled MN persons and the spouse or parents of these persons.

2. Any portion of the twenty dollar deduction which may remain after the subtraction above shall then be subtracted from the combined nonexempt earned income.

Example:Mr. Abbott is disabled and receives $15 monthly in Veteran's Benefits. He is also employed and earns $930 monthly. He would receive the $20 deduction on the VA Benefits and the $5 remaining ($20-$15) would then be deducted from his earned income.

Court-Ordered Spousal or Child Support [50554]

1. Court-ordered spousal or child support, or child support paid pursuant to an agreement with the district attorney, shall be deducted from the income of an MFBU which includes an ABD-MN beneficiary when it is actually paid by someone in the MFBU.

2. The amount deducted shall be the lesser of the amount:

a. Actually paid.

b. Specified in the court order or agreement with the district attorney.

c. Voluntary support payments are not an allowable deduction.

Income Necessary to Achieve Self-Support [50551.5]

1. This deduction applies only to a blind or disabled person's earned or unearned income. [Refer to “Earned Income,” page 56-1, for a complete discussion of this deduction, including verifications required.]

2. Deduct all the earned or unearned income if the plan for self-support:

a. Is in writing, and

b. Was initiated and approved while the person was receiving SSI/SSP, and



c. Has not been subsequently abandoned.

Cost of In-Home Supportive Services—ABD MN and Activity Disabled (SGA) Substantial Gainful Activity [50551.6]

1. The amount actually paid for in-home supportive services provided to any ABD-MN person or to a SGA-disabled person shall be deducted from the combined nonexempt income of the SGA-disabled or ABD-MN person.

2. The cost of in-home supportive services shall be a deduction only when the services are:

a. Provided by a person other than a family member living in the home and,

b. Determined to be necessary pursuant to an IHSS needs assessment.

3. In-home supportive services means those services which may be provided under the IHSS program.

4. For ABD-MN persons, the provisions of this section shall be limited to persons who, without in-home supportive services, would require 24-hour-a-day care in a health facility or community care facility verified by a signed physician's statement.

Note:[Refer to “Income/General,” page 53-1 for a thorough discussion of eligibility requirements necessary to allow this cost as a deduction.]

Guardian and Conservator Fees [50549.3]

Fees paid to a court-appointed guardian or conservator are allowable deductions from unearned income provided all the following conditions are met:

1. The fees are paid to a court-appointed guardian or conservator of an individual who has been declared by a court to be incapable of handling his/her own financial affairs and then only to the extent that the fees are actually owed in the month in which the payment is made.

2. A court-appointed guardian or conservator is required by the agency/entity paying the unearned income as a condition of rendering payment to incompetent persons.



3. The guardian or conservator provides a signed statement from the agency/entity making such payment verifying the requirement as set forth in (2) above.

Example:Mr. Singh is a comatose, disabled individual. His representative applies for retirement benefits from ABC Corporation on Mr. Singh’s behalf. The ABC Corporation requires a court-appointed conservator prior to awarding the benefits to Mr. Singh’s representative. Mr. Singh’s representative also applies for Medi-Cal benefits on Mr. Singh’s behalf. He provides our Agency with a letter from ABC Corporation stating the requirement of a court-appointed conservator. If the representative is appointed as Mr. Singh’s conservator by the court, and monthly fees are charged, these fees would be allowed.

Example:Santa Clara County Public Guardian’s Office is the court-appointed conservator of an individual who receives Medi-Cal benefits under the Aged, Blind and Disabled Program. This individual also receives Social Security Title II disability benefits payable to the Public Guardian. The Public Guardian collects a monthly conservator fee. As the Social Security Administration does not require a court-appointed guardian or conservator as a condition to pay disability benefits, these fees would not be allowed as a deduction.

The guardian or conservator must be informed of the above requirements when submitting guardian/conservator fees for processing.

25.60.3 AFDC-MN, MI, or Ineligible Members of the MFBU [50554]

Court-ordered spousal or child support, or child support paid pursuant to an agreement with the district attorney, shall be deducted from the income of an AFDC-MN or MI beneficiary when it is actually paid by that beneficiary. The amount deducted shall be the lesser of:

1. The amount actually paid.

2. The amount specified in the court order or agreement with the district attorney.

Note:Voluntary support payments are NOT an allowable deduction.



25.60.4 All MN or MI Programs [50555]

The following deductions shall be subtracted from any nonexempt income that remains after the application of all preceding exemptions and deductions.

Income of an MN or MI Person Used to Determine Public Assistance Eligibility of Another Family Member [50555.1]

1. That portion of income of an MN or MI person or a person responsible for the MFBU, which is counted in determining the eligibility of a spouse, parent, or child as a public assistance (PA) or other PA recipient shall be deducted.

2. Income of a stepparent and the value of income in-kind provided by a stepparent which is counted in determining the eligibility of a spouse or stepchildren as PA or other PA recipients shall be deducted.

Note:This computation must also be done when one or more family member receives an SSI/SSP grant or IHSS. These persons are not included in the MFBU, but the computation must be done to determine how much of the family's income was used to compute their SSI/SSP grant or IHSS eligibility. This amount of income is called an “Allocation to SSI/SSP or IHSS recipient” and is deducted from the nonexempt income of the MFBU. The actual computation is completed on the MC 176 W, Part II.

Health Insurance Premiums [50555.2]

1. When verified, health insurance premiums shall be deducted if paid by and purchased for any family member.

2. If the premium is paid less often than monthly it shall be averaged on a monthly basis.

Example:$66.00 premium paid quarterly $66.00 /3 = $22.00 per month is the allowable deduction.

3. Health insurance premiums paid for by a nonfamily member (e.g.,absent parent) are not an allowable deduction.



4. Medicare Premium, Part B, shall be deducted when actually paid by the client. Note: CalWIN will only allow Medicare Premium Part B deduction for two consecutive months. Refer to BENDS 2005-27 to continue to allow the premium deduction for certain individuals who don’t qualify for the State Buy-In.

Allocation to Excluded Children [50558]

The rules for allocation income deduction to excluded children apply to any Medi-Cal program including the Section 1931b.

1. This deduction is applied only when children who have separate income and/or property have been excluded from the MFBU.

2. The amount of the deduction is equivalent to the difference in the maintenance need with the children in or out of the MFBU, minus any income of the excluded child/children. Example: The family consists of a stepfather, his wife and wife’s two separate children. The family decides to exclude the eldest child from the MFBU because the child receives $165 gift from his natural father each month. The Section 1931b income standard for 4 is $1571 and $1306 for 3 (excluding the eldest child). The difference ($265) less the child’s own income of $165 is equal to the child’s unmet need of $100, which is allowed as an “income allocation deduction for the excluded child, towards the MFBU’s budget.

3. If the children have enough income to meet their own needs based on this computation there is no allocation.

25.61Veterans’ Benefits

25.61.1 Background

The County Veterans Service Office (CVSO) provides information and assistance for filing with the Veterans Administration claims for:

• Pension• Compensation• Educational benefits• Aid and Attendance



• Payments for Unusual Medical Expense (UME)

Note:War time service is needed for certain types of veterans benefits.

25.61.2 Aid and Attendance

Aid and Attendance (A&A) is of particular importance as it is provided to veterans and their dependents who are in long-term care or who are unable to care for themselves at home. These benefits include:

• Cash benefits• Medical devices• Medical equipment

A&A does not provide health coverage.

Treatment of A&A Income

1. A&A cash benefits received by a veteran NOT in LTC are:

• NOT treated as income in the month of receipt.• Non-exempt property if retained after the month of receipt.

25.61.3 Payments for Unusual Medical Expense

Veterans may apply for and be eligible to receive payments for Unusual Medical Expense (UME).

Treatment

Payments for UME are not treated as income for the purpose of determining income eligibility for Medi-Cal, regardless of the living situation, or place of residence, of the individual who receives such payment.

Verification

Verification of UME may include a VA award letter issued at the time the UME are awarded or by completing the MC 05 Procedures. See [“MC 05 Procedures,” page 25-77]



25.61.4 Definitions

Veteran

An individual who has:

• Been on “active duty” in the military, naval or air service. (This includes National Guard only if called up for active duty.)

Note:“Wartime duty” is needed for certain veteran benefits.

• A service connected disability and has been discharged or separated from active duty.

• Died while in the military.

Note:If an individual is currently on active duty he/she will not be eligible for Veteran’s Benefits.

Veteran’s Dependent

Any of the following are considered to be a veteran’s dependent:

• Spouse of veteran, if:

• Currently married or separated, but not divorced.• Divorced, but not remarried.• Legally married at the time of the veteran’s death.• Divorced from veteran and any subsequent marriage(s) were terminated prior

to the veteran’s death.

• Parents.

• Natural or legally adopted child(ren) or stepchild(ren).

25.61.5 Client Responsibility

The applicant or beneficiary must cooperate by responding to the County Veterans Service Office (CVSO) when necessary.



If the individual fails to apply for these benefits, there is no Medi-Cal eligibility for the person. They would be denied/discontinued for failure to apply for unconditionally available income.

25.61.6 EW Responsibility

The EW must:

1. Review the Statement of Facts (MC 210) to determine if there may be potential eligibility for Veteran’s benefits.

2. Complete a “Military Verification and Referral Form” (MC 05) when:

• The client indicates they may be eligible for or have applied for veteran’s payments.

• The veteran or veteran’s dependent enters long term care.

Note: The MC 05 can be found in the DEBS Forms Library and CalWIN.

25.61.7 MC 05 Procedures

Medi-Cal eligibility must be granted while the MC 05 is being processed, as long as the client meets all other eligibility requirements. When the MC 05 is returned from the CVSO, eligibility can be re-evaluated as necessary.

Distribution and Filing of the MC 05:

1. The EW must manually generate the MC 05 in CalWIN from the Print a Form/Other Correspondence Manually window.

2. The EW will email the MC 05 to the CVSO at [email protected] with the subject “MC 05”and send a copy to IDM. The MC 05 must no longer be faxed, mailed, or hand-delivered.

3. The CVSO will use VA resources or contact the veteran to confirm VA benefit eligibility (if any), complete Section B of the MC 05 and email it to the verifications inbox ([email protected]).

4. Designated staff will monitor the verifications inbox and will create a TMT for processing when the CVSO returns the MC 05.



5. The EW will review the form to determine Medi-Cal eligibility. Any income reported should be budgeted and the Share of Cost (SOC) should be adjusted, if applicable.

If the MC 05 has not been returned by the time the case is transferred out of Intake, the Continuing worker will be responsible for processing once the form is received from the CVSO. If the form is not returned, it must be sent again during the client’s MC Redetermination.

25.61.8 Follow-Up Procedures When A Claim Has Been Initiated

1. If the original copy is returned by the CVSO indicating a claim has been initiated, the EW must follow-up within 90 days.

2. If at the end of 90 days the second copy has not been received indicating the disposition of the claim, the EW will:

a. Contact the CVSO to determine what, if any, communication has been received from the Veterans Administration regarding the claim, or

b. If the CVSO has no information regarding the claim, contact the recipient to determine if they have received a determination from the Veterans Administration.

3. If there is evidence that the client had not complied with the Veterans Administration in providing necessary information or verification, then the client must be denied or discontinued due to failure to apply for unconditional income until the necessary action has been completed.

4. If neither the CVSO or the recipient has received any information regarding the claim, set up a case alert for follow-up again in 30 days.

5. Repeat the steps in this section as often as necessary until a decision has been received.

6. Once the decision on the claim has been received, verified and documented on the Maintain Case Comments window, the Eligibility Worker can take appropriate action.

25.61.9 When an MC 05 Referral is Not Necessary

The MC 05 does not have to be completed when:



• The person is currently on active duty in the Armed Forces, or if his/her only service was in the Merchant Marine or National Guard.

• The divorced spouse does not have the veteran’s legal dependent in his/her custody.

• The veteran’s Social Security Number and date of birth, Military Serial Number or Veterans Administration Claim Number is not available.

• There is no legal relationship between the claimant and the veteran, and it has been determined that paternity cannot be established.

Note:California is not a “common-law” state. An alleged wife must produce a marriage certificate to support her claim. An alleged widow who does not have a marriage certificate must provide evidence that a marriage was established in a “common law” state. An illegitimate child can be recognized as a dependent or surviving child of a veteran only if the veteran acknowledged paternity in writing or if paternity was established by a court order. In the case of a deceased veteran, paternity can be established by secondary evidence. A referral to CVSO for assistance in developing secondary evidence should be completed.

25.61.10 Budgeting Information

1. A retroactive payment (except A&A) is considered a nonrecurring lump sum social insurance payment and shall be included in the property reserve.

2. Recurring monthly payments are unearned income and shall be treated as such.

3. Aid and Attendance payments are treated differently depending on the veterans’ situation. [Refer to “Aid and Attendance,” page 25-75.]

25.61.11 Veterans Educational Benefits

The Veterans Administration (VA) currently provides educational benefits under three educational assistance programs; GI Bill, the Post 9/11 GI Bill and Veterans Educational Assistance Program (VEAP).



GI Bill

Veterans who served on active military duty prior to 1/1/77 may receive up to 45 months of educational assistance through the GI Bill.

Educational benefits received through the GI Bill are treated as unearned income for educational purposes. The educational expense deduction may be applied. [Refer to “Educational Expenses [50547],” page 25-68.]

Post 9/11 GI Bill

Veterans who served on active duty after 09/10/01 are eligible for the Post-9/11 GI Bill if the veteran:

• Served for a cumulative period of at least 90 days.• Served at least 30 continuous days and received a disability discharge.

There are three payments associated with the Post 9/11 GI Bill:

• Tuition and Fees • Monthly Housing Allowance • Annual Books and Supplies Stipend of $1,000.

Treatment of Post 9/11 Payments

Tuition and fees are paid directly to the educational institution and, therefore, these payments are not counted as income to the veteran. This treatment applies to all Medi-Cal programs.

The monthly housing allowance is paid directly to the veteran on a monthly basis. The monthly housing allowance is treated as unearned income for all Medi-Cal programs.

The annual books and supplies stipend of $1,000 is paid directly to the veteran on a proportional basis based on enrolled units. Two different treatments apply:

• If the client is eligible for Aid to Families with Dependent Children Medically Needy (AFDC MN) or 1931(b), the annual books stipend used for educational expenses other than tuition is excluded as income. [Refer to “Educational Expenses [50547],” page 25-68]

• If the client is eligible for Aged Blind and Disabled Medically Needy program (ABD MN), the annual books stipend is excluded as income.



Verification

The VA award letter identifies such payments as VA-CH 33. This letter is an acceptable evidence to be used to document type, amount, and frequency of payments.

Veterans’ Educational Assistance Program (VEAP)

Veterans who have voluntarily contributed to the VEAP educational fund while on active duty after 12/31/76 may receive up to 36 months of educational assistance.

• The VA contributes $2 for every $1 previously contributed by the veteran.

Benefits received from VEAP are treated as follows:

• The portion of VEAP benefits provided by the VA (two-thirds of the benefit) is unearned income for educational purposes (educational expenses may be deducted). [Refer to “Educational Expenses [50547],” page 25-68.]

• The portion of VEAP benefits contributed by the veteran (one-third) of the benefit) is exempt income.

Note:These regulations apply while the veteran is pursuing an education, even if the veteran is not currently in school or training.

• The veteran may elect to withdraw his/her contribution, and forfeit entitlement to matching funds from the VA. The veteran’s contribution to VEAP is considered non-exempt property upon withdrawal.

25.62Unemployment Insurance Benefits/Disability Insurance Benefits

25.62.1 Client Responsibility (Unconditionally Available Income)

Unemployment Insurance Benefits (UIB) and Disability Insurance Benefits (DIB) are both considered unconditionally available income.



The client:

1. Must apply for and accept UIB/DIB.

2. Is not eligible for Medi-Cal if he/she does not cooperate in the process.

a. If the person who does not cooperate is the only member of the MFBU, the entire case is denied/discontinued.

b. If there are other persons in the MFBU, the person who does not cooperate becomes an Ineligible Member of the MFBU. [Refer to “Budgeting,” page 61-1 for an example of treatment of the Ineligible member of the MFBU.]

25.62.2 Eligibility Worker Responsibility

The EW shall follow these procedures:

1. Explain to the client that failure to apply for and accept UIB/DIB, will result in their ineligibility for Medi-Cal. [Refer to Note on following page for exceptions to EDD referrals.]

2. Refer for UIB, all persons who:

a. Have a work history in the past 19 months, and

b. Are currently unemployed, and

c. Earned at least $1200 in a 12-month base period, or at least $900 if accumulated in at least 8 separate weeks of at least $20 each.

3. Refer for DIB, all persons who:

a. Have a work history in the last 19 months, and

b. Are currently disabled or unable to work due to pregnancy/childbirth, and

c. Earned at least $300 in a 12-month base period.

4. Do not refer to UIB/DIB an individual who:

a. Is currently receiving UIB/DIB.

b. Has exhausted their benefits for current claim period (must be verified).



Reminder:EW must refer an individual if there is a new claim period and they have sufficient earnings.

c. Is currently employed full-time.

d. Has not worked in employment covered by the UI Compensation Law in the last 19 months.

Note:Being fired from or quitting a job does not necessarily mean ineligibility for UIB.

e. Is requesting restricted Medi-Cal benefits.

Note:Pending appeal of the Crespin lawsuit, applicants seeking restricted Medi-Cal benefits shall not be referred to EDD. This is because the Crespin court order prohibits the Medi-Cal program from requiring applicants for restricted benefits to provide a Social Security Number. Additionally, any ineligible person in the MFBU (e.g., an undocumented parent applying for full benefits for a citizen child), who would only be eligible for restricted benefits if he/she were to apply, shall not be referred to EDD. Persons with SSNs who are receiving restricted benefits shall not be referred to EDD. However, they may choose to file for UI/DI benefits.

5. Verify an application for UIB/DIB by viewing:

• Notice of Computation.• Denial of Benefits Letter.• Current benefit check.• Letter from UI/DI office stating client has pending application.• Any other communication from the appropriate UI/DI office showing the

application status.

25.62.3 Budgeting Information

1. Eligible UI claimants should receive one week's benefit approximately 21 days after filing and biweekly payments thereafter:

a. Verify benefit amount initially, and anytime thereafter, that the benefit amount or the interval of receipt changes.

b. Out-of-state claims take approximately six (6) weeks to be processed.


c. The receipt of UIB shall be anticipated and the income shall be counted in the budget if it is reasonable to assume the client will actually receive the benefits. [Refer to Common-Place Handbook, “Telephone Verification Policy,” page 7-1 and use the table to anticipate the amount.]

d. To compute monthly income use the weekly benefit amount (WBA) x 2 x 2.167 (i.e., WBA $30 x 2 = $60 x 2.167 = $130.02 monthly income).

2. Eligible DI claimants receive biweekly payments beginning approximately 11 days after the physician submits the DI claim form.



25.63Retirement Survivors Disability Insurance (RSDI)

Retirement, Survivors, Disability Insurance (RSDI) is only available from the Social Security Administration to persons with the required work history and/or their dependents. These may be in the form of primary benefits for the wage earner, or auxiliary and survivors benefits available to the dependent. There is also a burial benefit paid upon the death of the primary wage earner, if there is a surviving spouse and/or a dependent or disabled child.

Public Law 98-21 made a change to RSDI. One such change gradually increases the age of eligibility for retirement benefits from 65 to 67 years old. As a result of this change, beginning 2003, individuals subject to this change have had a significant loss of income when filing for retirement benefits. Although Medi-Cal applicants/beneficiaries may file for RSDI retirement as early as 62 years of age, benefits are reduced. These individuals must do more than simply claim and accept RSDI retirement benefits. They must also agree to a significant reduction in benefits during their remaining years of their life.

Below is a chart delineating when an individual can apply for full retirement benefits:

If born in year...Will receive unreduced benefits at age...

1943 - 1954 66

1955 66 and 2 months





1960 and later 67



25.63.1 Client Responsibility (Unconditionally Available Income)

RSDI (not SSI/SSP) is considered to be a source of unconditionally available income. The client:

1. Must apply for and, if eligible, accept any RSDI payments.

Note:Applicants/recipients are not required to apply for RSDI retirement benefits until they reach their full retirement age.

2. Is not eligible for Medi-Cal if they do not cooperate with the Social Security Administration in processing the application.

a. If the person who does not cooperate is the only member of the MFBU, the entire case is denied/discontinued.

b. If there are other persons in the MFBU, the person who does not cooperate becomes an Ineligible Member of the MFBU. [Refer to “Budgeting,” page 61-1 for treatment of ineligible members.]

25.63.2 EW Responsibility

The EW shall:

1. Review pertinent information with the client and if there appears to be potential eligibility for RSDI benefits, refer the client to the nearest Social Security Office.

2. Explain to the client that failure to apply for and accept RSDI will result in their ineligibility for Medi-Cal.

3. Complete the “Social Security Information Request and Referral” (SCD 1955) when referring persons to apply for potential RSDI benefits. Two copies shall be given to the client. The client will be given a copy of the SCD 1955 completed by the Social Security Office showing an application for RSDI benefits was made.

4. The SSA information can also be viewed on the MEDS INQT screen.

5. The SCD 1955 is also used when:



a. Information is needed for a specific period of time, over 12 months prior to the current date.

b. Information is needed immediately (sooner than three to five working days).

Note:The client will hand-carry the SCD 1955 to the Social Security office.

c. Information is needed concerning a disability onset date or a disability reexamination date.

6. Verify the application for RSDI by viewing a:

a. SCD 1955 completed by the Social Security Administration (SSA).

b. Current RSDI benefit check.

c. Letter from SSA stating client has a pending application.

d. Notice for Approval or Denial of RSDI benefits.

e. MEDS INQT screen.

f. Computerized Transaction Summary from the Public Guardian's Banking Institution.

g. Any other communication from SSA showing the status of the RSDI application.

25.63.3 General Benefit Information

1. RSDI benefits are received monthly. They are usually received on the 3rd of each month. The client may have the amount automatically deposited in an account with a financial institution. Recurring monthly payments are unearned income and shall be treated as such.

2. A nonrecurring RSDI lump sum payment shall be treated as exempt property for a period of nine (9) months following the month of initial receipt for Pickle, DAC, DW and MN/MI programs.

3. An RSDI overpayment adjustment amount is to be treated as unavailable income in the financial eligibility determinations. The figure to be used is the net benefit payment.



4. An individual may be employed and still receive RSDI. The maximum yearly earnings amount varies depending upon the age of the recipient. SSA should be contacted when more information or clarification is needed.

25.64Supplemental Security Income (SSI)

25.64.1 Who Is Eligible for SSI

An individual may be eligible for SSI if they are:

1. Age 65 or older, or

2. Legally blind at any age, or

3. Disabled at any age when the impairment:

a. Is expected to last at least 12 months and prevents any substantial work, or

b. Is expected to result in death.

25.64.2 Who Must Apply for SSI

A Medi-Cal applicant/beneficiary is NOT required to apply for SSI as a condition of eligibility. However, if an individual appears to be eligible for SSI and does not refuse to apply for that program, the EW shall:

1. Refer the person to the nearest Social Security Office using an SC 169, Referral for SSI. Complete in triplicate, giving two to the client.

2. Document the referral in the Maintain Case Comments window.

3. Determine Medi-Cal eligibility under any other program pending the SSI determination.

25.64.3 Verification of SSI

Receipt of SSI may be verified by:

1. The award letter, or



2. SDX, microfiche, or

3. A statement from financial institution clearly indicating SSI direct deposit.

4. Return of SCD 169, or

5. MEDS inquiry screen showing client receiving SSI Medi-Cal.

25.64.4 Other Information on SSI

1. SSI checks are received on the first of each month, and the payment is separate from RSDI.

2. A Medi-Cal card is issued automatically if a client is SSI eligible.

3. If the client receives an SSI payment of less than the maximum for an individual with these living arrangements, this indicates:

a. Other income, or

b. An overpayment adjustment.

Note:EW should follow-up regarding reason why SSI, of less than the maximum amount based on the particular living situation, is authorized.

4. Retroactive SSI lump sum payments shall be considered exempt for a period of nine (9) months following the month of initial receipt for Pickle, Disabled Adult Child (DAC), and Disabled Widow(er)s (DW) programs.

5. Retroactive SSI lump sum payments shall be exempt without a time limit and not considered income or property for Medically Needy/Medically Indigent (MN/MI) programs and other programs following MN/MI rules.



25.65Annual COLAS for Government Pensions

Note:The EW shall use this COLA information as a guideline to verify increases in pension income. Often beneficiaries do not report this information until their annual redetermination. The EW shall set up a case alert for the month prior to the annual COLA (or quarterly adjustment) to verify the increase.

25.65.1 Public Employees Retirement System (PERS)

1. The annual cost of living increase is received in May.

2. Quarterly pension adjustments.

a. Some individuals are eligible for quarterly pension adjustments.

b. Quarterly pension adjustments are received in January, April, July and October.

25.65.2 State Teachers Retirement System (STRS)

1. The annual cost-of-living increase is received in October.

2. Quarterly pension adjustments.

a. Some individuals are eligible for quarterly pension adjustments.

b. Quarterly pension adjustment are received in January, April, July and October. (Amounts vary.)

25.65.3 Civil Service Annuities (CSA)

The annual cost-of-living increase is received in April.


Medi-Cal Handbook Non-MAGI MC Income 25. Non …Update # 16-17 Revised: 10/06/16 Medi-Cal Handbook...

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Transcript of Medi-Cal Handbook Non-MAGI MC Income 25. Non …Update # 16-17 Revised: 10/06/16 Medi-Cal Handbook...