Income Disregards and Deductions for the Family Coverage Group 510-05-45-35

(Revised 10/01 ML #2716)

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Medically needy income disregards and deductions are allowed for the Family Coverage group except as specified in this section.

1. The following medically needy deductions are not allowed:

1. The $30 work training allowance; and
2. The earned income deductions available to applicants and recipients who are not aged, blind, and disabled.

2. The following disregards and deductions are allowed from earned income:

1. An employment expense allowance equal to the greater of $180 or 27% of earned income is deducted from the gross earned income of each employed member of the Medicaid unit;
2. For each employed member of the unit, a time-limited disregard equal to 50% of the balance of earned income (after deducting the employment expense allowance) is disregarded for six consecutive months. Then, for each of the next additional three months, 35% of the balance of earned income is disregarded.

If the employed individual does not receive the 50% disregard for four consecutive months, the six-month period starts over with the next month in which the individual has earnings to which the disregard can be applied.

Once the employed individual has received at least four consecutive months of the 50% disregard, the remaining months of the 50% disregard and the months of the 35% disregard continue to count regardless of earnings or whether the individual remains eligible for Medicaid.

Once an individual has received these time-limited income disregards, the individual is not allowed to receive them again regardless of whether the individual remains on assistance or reapplies at a later date.

An applicant who has not previously received at least four consecutive months of the 50% disregard, and who has earned income in the three prior months, can receive the 50% disregard in each of the prior months and the prior months do not count as one of the four or six consecutive months. An applicant, however, who has previously received the four consecutive months and is reapplying for Medicaid can only receive the time-limited disregard if still within the time-limited period.

To count as one of the first four consecutive months, there must be earnings remaining after deducting the $180 employment expense allowance; and

• An earned income disregard of 25% of the balance of earned income (after deducting the employment expense allowance) is allowed for any employed member of the unit who does not receive one of the time-limited income disregards.

3. The following additional deductions are allowed from earned or unearned income:

• The cost of an essential service considered necessary for the well-being of a family is allowed as a deduction as needed. The service must be of such nature that the family, because of infirmity, illness, or other extenuating circumstance, cannot perform independently. An essential service is intended to refer to such needs as housekeeping duties or child care during a parent’s illness or hospitalization, attendant services, and extraordinary costs of accompanying a member of the family unit to a distant medical or rehabilitation facility, etc. This deduction is not allowed if any third party, including TANF, pays it; and
• When the case includes a stepparent who is not eligible, or when a caretaker who is under age 18 lives at home with both parents and the parents are not eligible under the Family Coverage group, a deduction is allowed for amounts actually being paid by the stepparent/parents to any other persons not living in the home who are, or could be, claimed by the stepparent/parents as dependents for federal income tax purposes.