Medi-Cal Handbook
page 25-1
Non-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
Medi-Cal Handbook
page 25-2
Non-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
Medi-Cal Handbook
page 25-3
Non-MAGI MC Income
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.
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-4
Non-MAGI MC Income
• 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.
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-5
Non-MAGI MC Income
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:
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-6
Non-MAGI MC Income
• 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
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-7
Non-MAGI MC Income
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.
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-8
Non-MAGI MC Income
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).
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-9
Non-MAGI MC Income
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:
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-10
Non-MAGI MC Income
• 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.
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-11
Non-MAGI MC Income
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.
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-12
Non-MAGI MC Income
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
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-13
Non-MAGI MC Income
• 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.
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-14
Non-MAGI MC Income
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
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-15
Non-MAGI MC Income
• 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:
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-16
Non-MAGI MC Income
• 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.
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-17
Non-MAGI MC Income
• 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.
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-18
Non-MAGI MC Income
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:
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-19
Non-MAGI MC Income
• 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.
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-20
Non-MAGI MC Income
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.
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-21
Non-MAGI MC 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.
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-22
Non-MAGI MC Income
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.]
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-23
Non-MAGI MC Income
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.]
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-24
Non-MAGI MC Income
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.
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-25
Non-MAGI MC Income
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.
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-26
Non-MAGI MC Income
If
Then
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.
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:
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-27
Non-MAGI MC Income
• 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
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-28
Non-MAGI MC Income
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.
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-29
Non-MAGI MC Income
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.
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-30
Non-MAGI MC Income
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.
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-31
Non-MAGI MC Income
• 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.
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-32
Non-MAGI MC Income
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
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-33
Non-MAGI MC Income
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.
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-34
Non-MAGI MC Income
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.
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
25.50.1
page 25-35
Non-MAGI MC Income
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:
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-36
Non-MAGI MC Income
• 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.
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-37
Non-MAGI MC Income
• 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.
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-38
Non-MAGI MC Income
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.]
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-39
Non-MAGI MC Income
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.
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-40
Non-MAGI MC Income
• 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.
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-41
Non-MAGI MC Income
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.
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-42
Non-MAGI MC Income
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
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-43
Non-MAGI MC Income
For Year
Monthly Exclusion
Maximum Exclusion for Calendar Year
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
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.
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-44
Non-MAGI MC 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.
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.
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-45
Non-MAGI MC Income
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.
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-46
Non-MAGI MC Income
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.
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-47
Non-MAGI MC Income
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.
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-48
Non-MAGI MC Income
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.
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-49
Non-MAGI MC Income
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:
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-50
Non-MAGI MC Income
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:
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-51
Non-MAGI MC Income
• 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.
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-52
Non-MAGI MC Income
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
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-53
Non-MAGI MC 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.
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-54
Non-MAGI MC Income
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.
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-55
Non-MAGI MC Income
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.
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-56
Non-MAGI MC Income
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.
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-57
Non-MAGI MC Income
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.
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-58
Non-MAGI MC Income
Example:
The following example illustrates the difference between personal and
business expense.
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.
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:
Gross Income
$400
Less Expenses
$53
96
20
Net Profit
Revised: 10/06/16
9
-178
-----
----$222
Update # 16-17
Medi-Cal Handbook
page 25-59
Non-MAGI MC Income
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
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-60
Non-MAGI MC Income
(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
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-61
Non-MAGI MC Income
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:
Rent
Utilities
$250
50
Food
200
Total
$500
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
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-62
Non-MAGI MC Income
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:
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-63
Non-MAGI MC Income
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
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-64
Non-MAGI MC Income
• 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.
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-65
Non-MAGI MC Income
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.
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-66
Non-MAGI MC Income
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.
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-67
Non-MAGI MC Income
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.
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-68
Non-MAGI MC 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
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-69
Non-MAGI MC Income
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.
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-70
Non-MAGI MC Income
“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
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-71
Non-MAGI MC Income
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.
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-72
Non-MAGI MC Income
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.
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
25.60.4
page 25-73
Non-MAGI MC Income
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.
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-74
Non-MAGI MC Income
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
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-75
Non-MAGI MC Income
• 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]
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-76
Non-MAGI MC Income
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.
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-77
Non-MAGI MC Income
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.
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-78
Non-MAGI MC Income
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:
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-79
Non-MAGI MC Income
• 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).
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-80
Non-MAGI MC Income
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.
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-81
Non-MAGI MC 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.
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-82
Non-MAGI MC 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).
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-83
Non-MAGI MC Income
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:
•
•
•
•
•
25.62.3
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.
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.
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-84
Non-MAGI MC Income
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.
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-85
Non-MAGI MC Income
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
1956
66 and 4 months
1957
66 and 6 months
1958
66 and 8 months
1959
66 and 10 months
1960 and later
67
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-86
Non-MAGI MC Income
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:
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-87
Non-MAGI MC Income
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.
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-88
Non-MAGI MC Income
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
Revised: 10/06/16
Update # 16-17
Medi-Cal Handbook
page 25-89
Non-MAGI MC Income
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.
Update # 16-17
Revised: 10/06/16
Medi-Cal Handbook
page 25-90
Non-MAGI MC Income
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.
Revised: 10/06/16
Update # 16-17