Unearned Income 430-05-50-20-10

(Revised 01/01/04 ML 2893)

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Unearned income includes, but is not limited to:

1. Assistance payments such as TANF, SSI, and general assistance;
2. Payments such as:

1. Annuities - including IRAs and Keogh Plans
2. Pensions - retirement or disability
3. Veteran's benefits
4. Workers compensation
5. Unemployment compensation
6. Social Security benefits other than SSI
7. Strike benefits
8. Deemed income from a spouse in a nursing home to the spouse in the community.
9. Adoption subsidies

If child support or taxes are withheld from any of the above benefits, the gross amount must be counted.

 

If an overpayment is withheld from any of the above benefits, the net amount must be counted.

 

If there is a reduction in one income source due to the receipt of another income source, the net amount must be counted.

3. Gross income less the cost of doing business from rental property when a household member does not spend at least 20 hours a week managing the property.
4. Income made available or payments in money that are made directly to a food stamp household by an ineligible or a non-household member.

Examples:

1. Income deemed from a spouse in a nursing home to the spouse in the community.
2. Money put in a checking or savings account by an individual outside of the food stamp household.

Exceptions:

1. Excluded income that is deposited in a joint checking account by an ineligible student is not counted as income.
2. If a household member is identified on an account signature card as an individual who can draw on the account, non-household member funds deposited into that account are not considered available and are excluded as income.

 

5. Payments from Government sponsored programs, dividends, interest, royalties, and all other direct money payments from any source that can be construed as a gain or benefit.

Interest or dividend income must be counted when it is paid directly to a household. Client statement of the household’s interest or dividend income from all sources when it is paid out and is $50 or less per month ($600 or less per year) is acceptable, unless questionable. Interest or dividend income accrued will not be counted. Interest on checking and savings is considered accrued.

 

Verify interest or dividend income paid out from the prior year and annualize it. If the account was just opened, interest or dividend income must be anticipated based on the most current verification available.

6. Monies that are withdrawn that are or could be received by a household from irrevocable trust funds are considered excludable assets. The withdrawal from the trust must be considered income in the month received.

Please submit complete copies of all trust agreements to the Legal Advisory Unit of the Department of Human Services for review along with the following information:

1. Who is applying for benefits and what benefits they are applying for.
2. Verification of all asset(s) owned by the trust including the value of each asset, when the asset was transferred to the trust and who transferred the asset to the trust.
3. Any other documents or information that you think may be relevant.

7. When monies (which are not considered earned income) legally belonging to a household are diverted to a third party for an expense, the vendored payment is counted as unearned income rather than excluded.

Examples:

1. TANF protective payments.
2. A household receives court ordered monthly support payments in the amount of $400. $200 is diverted by the provider and paid directly to a creditor for a household expense. The court ordered payment of $400 is counted as income.

Money diverted from a court ordered payment to a third party for a household expense must be included as income because the payment is taken from money owed to the household.

 

Exception:

Payments specified by a court order to go directly to a third party rather than the household are excluded from income because they are not payable to the household.

8. The amount of a reimbursement that exceeds the actual incurred expense. Reimbursements will not be considered to exceed actual expenses, unless the provider or the household indicates the amount is excessive.
9. Payments to tribal members (residing on or off the reservation) from gaming proceeds. These payments are not per capita payments.
10. All gambling winnings.
11. Cash donations received on a recurring basis.

Exception:

Cash donations based on need received from private non-profit charitable organizations that do not exceed $300 in a quarter.

Example:

A household receives $150 from a private non-profit organization in July, $100 in August, and $100 in September. That household would be entitled to an income exclusion of $150 for July, $100 for August, and $50 for September, for a total of $300.

12. The full amount of child support, spousal support, or any other payments made directly to the household from non-household members.  

Child support payments are shown as income on UNIN in TECS next to the child the payment is intended for.  Spousal support payment are shown as income on UNIN in TECS next to the person the payment is intended for.

 

The worker must verify the following:

1. The amount of the legal obligation.
2. The amount of child support received.

 

Verification can be obtained from:

1. FACSES (can only be used to verify the legal obligation or legally obligated amount of child support)
2. Child support stubs
3. Documented collateral contacts

Federal and state tax intercept payments are a non-recurring lump sum and are not counted as income.  They are not considered part of the payment history.

 

If child support income is received monthly or twice a month, it may be averaged if the household agrees to income averaging.  This must be documented in the casefile.

 

If child support is received as an annual payment, it is prorated over the period of time it is intended to cover (in this instance 12 months).

 

Based on discussion with the household and the verification provided, the worker must document the amount of child support income counted or not counted and why.

 

At initial application, if no child support payments have been received in the month of application or the two months prior to the month of application and the household anticipated receipt of none, no child support income is counted.  This must be documented.

 

If no child support payments have been received in the month of application or the two months prior to the month of application and the household anticipates receipt of child support income, the amount anticipated must be counted.  This must be documented.

 

If the household has received a payment prior to the date of the interview in the application month, it must be counted along with what the household anticipates to receive for the remainder of the application month.  

 

If the household has two consecutive months of income, but no income to date in the application month, the worker must thoroughly explore with the household what they expect to receive and anticipate income based on the most current information available.  This must be thoroughly documented in the casefile.  History in this instance is two months income.  

 

If the household has income in one of the two months prior to the month of application and has received no income in the application month to the date of interview, the worker must thoroughly explore with the household what they expect to receive and anticipate income based on the documented discussion with the household.  

 

If the household received child support income in excess of the legal obligation in the month of application, (excess could include arrearages, interest or income withholding orders for individuals who are paid weekly or bi-weekly), it must be counted along with any anticipated income for the remainder of the month.

 

When processing the second beginning month, if the household has not received child support income in excess of the legal obligation and does not anticipate receiving child support in excess of the legal obligation, the legally obligated amount must be used.  This must be thoroughly documented in the casefile.

 

When processing the second beginning month, if the household has received child support income in excess of the legal obligation and there is a prior payment history (two prior consecutive months which could include the application month and the second beginning month), the child support income in excess of the legal obligation must be counted.

Examples:

A household applies on October 15, and received child support income in excess of the $250 legal obligation in September and October in the amount of $300 each month.  The $300 must be counted as income when calculating eligibility and level of benefits for both October and November as there is a prior payment history.  

 

A household applies on October 15, and is not interviewed until November 12.  At the interview the household reports and verifies child support income in excess of the $250 legal obligation received in October and November in the amount of $300.  The $300 must be counted as income when calculating eligibility and level of benefits for both October and November.

Exception:

 

No two prior consecutive month history of child support payments in excess of the legal obligation is required for households who received child support income in excess of the legal obligation where the Child Support Enforcement Unit has calculated child support payments based on the obligor being paid weekly or biweekly.

 

If child support income is received sporadically, and there is no prior payment history (two prior consecutive months which could include the application month), child support income is not counted unless the household anticipates receipt of this payment.

Example:

A household applies for benefits on October 10, and reports no child support income.  In reviewing the payment history the household has not received any payment since May.  However, the household reports they expect to receive a payment in the amount of $200 yet this month as the obligor found employment and has been working for several weeks.  The $200 the household expects to receive must be counted as income.  

 

If child support income is received sporadically, and there is a prior payment history (two prior consecutive months which could include the application month), the most current child support income received must be counted, unless the household can substantiate that none will be received.

 

For ongoing cases, the two prior consecutive months does not include the processing month.

 

The worker must allow two days mailing time from the date the check was issued by Child Support Enforcement Unit.  

 

If there is a two prior consecutive month history (which does not include the processing month) of child support income in excess of the legal obligation (excess could include arrearages, interest or income withholding orders for individuals who are paid weekly or bi-weekly), the most current child support income including the excess received must be counted.

 

Exception:

No two prior consecutive month history of child support payments in excess of the legal obligation is required for households who received child support income in excess of the legal obligation where the Child Support Enforcement Unit has calculated child support payments based on the obligor being paid weekly or bi-weekly.

 

For households that receive child support income either weekly or bi-weekly, unless the household has a two prior month history (which does not include the processing month) of receiving a payment on the same day each week or every other week, the worker must not anticipated an extra check.

 

For those households that submit a monthly change report form and verification of monthly child support income, if the household is not reporting or anticipating a change in child support income, base month verified child support income is used.  If the base month includes an extra child support check (3rd or 5th), it must be converted back to a non-extra check month (2 or 4).

 

For those households that simply drop off verification of monthly income including child support and do not report any changes, base month verified child support income is used.  If the base month includes an extra child support check (3rd or 5th), it must be converted back to a non-extra check month (2 or 4).

 

If the child support income is received monthly or twice a month and the household submits verification of child support received in the processing month, it must be used.

 

If the household reports a change in child support income and does not provide verification of the change, the worker must send F442 and follow upon the reported change.  Benefits are authorized the same as the previous month if the household does not respond and provide verification.

 

If the household does not have any contact with the worker, the case continues using the last reported and verified amount.

 

If the household reports an anticipated change in the amount of child support they expect to receive that will result in a decrease in benefits, the change must be acted on without verification of it.  Verification must be obtained at the next recertification.

 

If the household reports an anticipated change in the amount of child support they expect to receive and it will result in an increase in benefits, the household must provider verification of the anticipated change before it can be acted on.