Current through September 24, 2024
A. The amount
of unearned income which must be counted in determining eligibility for
Medicaid is the gross amount due the client; however, the gross amount of
unearned income may be reduced by certain expenses that are an essential factor
in obtaining a particular payment(s).
B. Unearned income does not include that part
of a payment that is for an essential expense incurred in getting the payment.
For example:
1. From a payment received for
damages in connection with an accident, subtract legal, medical and other
expenses connected with the accident; or
2. From a retroactive check from a benefit
program other than SSI, subtract legal fees connected with that
claim.
C. The following
fees are considered essential to obtaining income and are allowed as
deductions:
1. Document fees to acquire
documentation to establish that an individual has a right to certain income are
an essential expense and reduce the amount of unearned income which is
countable.
a) Examples include fees for
obtaining birth or death certificates, legal papers, medical examinations,
filing fees, etc.
2.
Guardianship fees are essential expense only if the presence of a guardian is a
requirement for receiving the income.
D. The following criteria must be used when
deducting expenses essential to obtaining the unearned income:
1. Expenses are deducted from the first and
any subsequent amount(s) of related income until the expense is completely
offset.
2. Excludable expenses can
be offset against the income when it is actually or constructively
received.
3. Allow any verified
expenses which were paid by the recipient prior to the receipt of the income
(e.g., a partial payment to an attorney made from an individual's savings
account) as long as they are essential to obtaining the income.
4. Proof of having incurred the expense
(bills, canceled checks, money orders, etc.) is required. If an expense has
been incurred, but not paid, assume the individual will pay the
expense.
5. The remainder is
unearned income subject to the general rules pertaining to income and income
exclusions.
Social Security Act
§1902 (r)(2); 42 CFR §435.601(b) (Rev
1994).
