Unearned Income 510-05-85-15

(Revised 7/1/2025 ML #3935)

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(N.D.A.C. Section 75-02-02.1-37)

 

Unearned income is income that is not earned. Unearned income which is received in a fixed amount each month shall be applied in the month in which it is normally received. For example, Social Security benefits received in January will be applied against January need.

 

Child Support payments made via Direct Deposit or Electronic Payment Card are considered received on the third (3rd) working day from the 'Check Date' field on the FACSES ledger, unless the applicant or recipient verifies that the payment is received otherwise. The 'Check Date' will be considered the first day when determining the three (3) working days. Any fees deducted from child support received by the State Disbursement Unit are not counted as child support income (nor may it be subtracted from the child support paid amount when determining the allowable child support deduction).

 

  1. Recurring unearned lump sum payments received after application for Medicaid are prorated over the number of months the payment is intended to cover. When a payment is received and prorated in an ongoing case, or after a period of Medicaid or Healthy Steps eligibility, and the case closes and then reopens during the prorated period, or within the following proration period, the lump sum payment must continue to be used. This prevents cases from being closed temporarily to avoid using the lump sum income. All other recurring unearned lump sum payments received before application for Medicaid or Healthy Steps are considered income in the month received and are not prorated.
  2. All nonrecurring unearned lump sum payments, except medical payments of health or long-term care insurance payments, Veteran's Administration aid and attendance, Veteran's Administration reimbursements for unusual medical expenses, and Veteran’s Administration homebound benefits intended for medical expenses, must be considered as income in the month received and assets thereafter.

Lump sum retroactive adjustment payments from the SSA due to changes in the individual’s earning record are considered nonrecurring lump sums.

  1. If an individual has a life insurance policy that allows him or her to receive the death benefit while living and the individual meets the insurance company's requirements for receiving such proceeds, the individual will not be required to file for such proceeds. If, however, the individual does file for and receive the benefits, the payment will be considered income in the month it is received and available as an asset if held into following months.
  2. Income only becomes an asset in the month following the month it is counted as income.

Example 1: An annual recurring lump sum payment of $6000 is received in January and is prorated at $500 per month. In January, none of the $6000 is considered an asset. In February, if any portion of the $500 of January income is retained, it becomes an asset, but the remaining $5500 is not. In March, only $5000 is not an asset, and so on.

Example 2: A nonrecurring lump sum payment of $5000 is received in May, and is considered May income. Any amount of the $5000 that remains in June is an asset because it has already been counted as income.

  1. Types of unearned income include but are not limited to:

    1. Income from pension and benefit programs, such as Social Security, Railroad Retirement, veteran’s pension or compensation, veteran's vocational rehabilitation subsistence payments, unemployment compensation, employee or individual pension plans and annuities, union compensation during strikes, Workforce Safety & Insurance, public or private disability payments for an individual, etc.

       

      These benefits are to be considered in the full amount awarded within the Medicaid unit. However, when a mandatory deduction for taxes is withheld, the benefit is reduced by those deductions (see 05-85-05(1) for policy on how to treat Social Security overpayments);

       

    2. Voluntary cash contributions from others;

       

    3. The net amount of court ordered or voluntary support payments and alimony. The net amount of the payment is the amount after fees are deducted from child support payments received by the State Disbursement Unit;

       

    4. Income from a life estate;

       

    5. Income from rental of rooms, apartments, or other property except that income from room rentals is considered "earned" if the recipient is actively engaged in the venture by such means as making the bed, changing linens, cleaning the room, etc. The first $25 of income from each roomer is exempt to defray any associated expenses;

       

    6. Student income received from the Veterans Administration through the GI Bill or Reserve Education Assistance Program (REAP), except that verified out of pocket school expenses (tuition, books and fees) may be deducted. Such expenses may not be deducted from benefits specifically earmarked for housing or personal needs or from Veteran's vocational rehabilitation subsistence payments;

       

    7. Money received by the Medicaid unit as a result of a benefit or fundraiser. (Money that is received and disbursed by a third party for the benefit of the Medicaid Unit is considered an in-kind contribution);

       

    8. Mineral lease income (If a lump sum, count as income in the month received. If recurring, prorate over the period it is to cover);

       

    9. Royalty income less mandatory production taxes withheld prior to distribution (income taxes withheld are not allowed to reduce the royalty payment);

       

    10.  Conservation Reserve Program (CRP) program payments, less expenses, such as seeding and spraying necessary to maintain the CRP land in accordance with the CRP contract;

       

    11. Cooperative payments;

       

    12. Interest payments received as a result of converting an asset (i.e. contractual right to receive money payments);

       

    13. Stipends received to attend an educational facility or training (other than those stipends specifically excluded for victims of domestic violence in 05-85-30, subsection 30);

       

    14. Payment of proceeds or profits to enrolled tribal members from tribal gaming/gambling establishments (the payments are to be annualized and prorated over 12 months).

       

      Exception: MHA (TAT) does not pay out monies from casino gambling. See Disregarded Income 510-05-85-30.

       

    15. Clothing allowance payments received by a volunteer in the AmeriCorps program;

       

    16. Sisseton-Wahpeton Oyate Lake Traverse Reservation Food Distribution Program casino cash payments to the elderly is a recurring lump sum payment to be prorated over the period it is intended to cover; and

       

    17. Spirit Lake Nation payments for grades are considered non-recurring lump sums.