Post Eligibility Treatment of Income 510-05-85-25

(Revised 10/1/2025 Release 25.16)

(N.D.A.C. Sections 75-02-02.1-34(6) and 75-02-02.1-38.1)

This section prescribes specific financial requirements for determining the treatment of income and application of income to the cost of care for individuals with a certification of need or who are screened as requiring nursing care services, and who are residing in nursing facilities, the state hospital, the Anne Carlsen facility, the Prairie at St. John's center, the Stadter Psychiatric Center, a Psychiatric Residential Treatment Facility (PRTF), intermediate care facilities for the intellectually disabled (ICF-ID), and individuals receiving swing bed care in hospitals.

The following types of income may be disregarded :
1. Occasional small gifts;
2. For so long as 38 U.S.C. 5503 remains effective, ninety dollars ofVeteran's Administration improved pensions paid to a veteran, or asurviving spouse of a veteran, who has neither spouse nor child, and who resides in a Medicaid-approved nursing facility;
3. Payments to certain United States citizens of Japanese ancestry,resident Japanese noncitizens, and eligible Aleuts made under theWartime Relocation of Civilians Reparations Act;
4. Agent Orange payments;
5. German Reparation payments made to survivors of the holocaust, andreparation payments made under sections 500 through 506 of theAustrian General Social Insurance Act;
6. Netherlands Reparation payments based on Nazi, but not Japanese,persecution during World War II, Public Law 103-286;
7. Radiation Exposure Compensation, Public Law 101-426;
8. Interest or dividend income from liquid assets; and
9. From annual countable gross CRP and rental income, an amount equal to the real estate taxes for CRP and rental property that the recipient is responsible for paying on that property.
  
  Example 1: Ed is in the nursing home. He receives rental income on farmland in the amount of $24,000. Ed is responsible to pay the property taxes. The most current tax statement verifies that Ed is responsible for property taxes of $3600. $24,000 - $3600 is his annualized adjusted rental income of $20,400; divided by 12 equals $1700 per month unearned income to Ed.
  
  Example 2: Ralph and Edna are married. Edna is in the nursing home and Ralph is in the community. Their farmstead is leased out in both of their names. They receive annual gross rent of $30,000 and the property taxes for which both are responsible is $6,000. Since they both own and are entitled to the income, it is divided, so each has gross rental income of $15,000. Likewise, the property tax is split between them. When determining Edna’s income, the $15,000 - $3,000, or $12,000 is prorated over the year for $1000 per month. When determining Ralph’s income, the $15,000 is prorated over the year, giving him countable income of $1250 per month. Because only Edna is in a long-term care facility, only she is allowed the property tax disregard.
  
  Example 3: Pete is in the nursing home. He receives land rental income of $12,000 in April and $12,000 in October. His most recent tax statement verifies his responsibility of $4,000 in property taxes. Taking his annual rental income of $24,000 minus his property tax liability of $4000 equals $20,000 countable annual rental income. Dividing this by 12 months gives us a prorated countable monthly unearned rental income of $1,666.67. This would be reviewed in March of the following year to determine if the income or the liability has changed. If they apply after the April payment was received, but prior to receipt of the October payment, only the $12,000 October payment minus half of the allowed property tax liability would be prorated up to the next payment the following April.
10. Income tax refunds are excluded in the month received (they may be a countable asset, see 510-05-70-30(16) for treatment as an asset).
11. Money received by Native Americans from the lease or sale of natural resources, and rent or lease income, resulting from the exercise of federally-protected rights on excluded Indian property, is considered an asset conversion and is therefore not considered as income (even if the money is taken out of the IIM account in the same month it was deposited into the account). This includes distributions of per capita judgment funds or property earnings held in trust for a tribe. This does not Include local Tribal funds that a Tribe distributes to individuals on a per capita basis, but which have not been held in trust by the Secretary of Interior (e.g., tribally managed gaming revenues - which is countable income).
12. Disbursements from The People’s Fund and General Disbursements to members of the Mandan, Hidatsa, Arikara (MHA) Nation also known as Three Affiliated Tribes (TAT) come from natural resources (oil and gas royalties), therefore are disregarded income.
Note: Income received by Native Americans from the sale or lease of natural resources cannot be requested.

The mandatory payroll deductions under FICA and Medicare are allowed from earned income. (This does not include federal or state income tax withholding).
The following deductions are allowed in the following order:

The appropriate nursing care or ICF-ID income level;
Amounts provided to a spouse or family member for maintenance needs (this is the appropriate Medicaid income level for the spouse or family member, NOT alimony or child support);
Medical expenses for necessary medical or remedial care. (See examples of what are and are not considered necessary medical expenses at 510-05-85-35(2)(3)). Each medical or remedial care expense claimed for deduction must be documented in a manner, which describes the service, the date of the service, the amount of cost incurred, and the name of the service provider. An expense may be deducted only if it is:

Incurred in the month for which eligibility is being determined, or was incurred in a prior month but was actually paid in the month for which eligibility is being determined and was not a previous month's client share (recipient liability) or was not previously allowed as a deduction or offset of client share;
Provided by a medical practitioner licensed to furnish the care;
Not subject to payment by any third party, including Medicaid and Medicare;
Not incurred for nursing facility services, swing bed services, or HCBS during a period of ineligibility because of a disqualifying transfer; and
Claimed.

The cost of Medicare and health insurance premiums. A health insurance premium may be deducted from income in the month the premium is paid or may be prorated and deducted from income in the months for which the premium affords coverage. For purposes of this deduction, premiums for health insurance include payments made for insurance, health care plans, or nonprofit health service plan contracts which provide benefits for hospital, surgical, and medical care, but do not include payments made for coverage which is:

Limited to disability or income protection coverage;
Automobile medical payment coverage;
Supplemental to liability insurance;
Designed solely to provide payments on a per diem basis, daily indemnity, or nonexpense-incurred basis; or
Credit accident and health insurance.

The cost of long term care insurance premiums, for insurance carried by the recipient or the recipient’s spouse. The premium may be deducted from income in the month the premium is paid or prorated and deducted from income in the months for which the premium affords coverage.
A deduction of payments made for services of a guardian or conservator may be made, up to a maximum deduction equal to five percent of countable gross monthly income excluding nonrecurring lump sum payments.

Payments from any source, which are or may be received as a result of a medical expense or increased medical need, such as health or long-term care insurance payments, VA Aid and Attendance, VA homebound benefits intended for medical expenses, or VA reimbursements for unusual medical expenses, must be added to the remaining income to determine client share.