Nebraska Administrative Code
Topic - HEALTH AND HUMAN SERVICES SYSTEM
Title 477 - MEDICAID ELIGIBILITY
Chapter 22 - INCOME FOR NON-MODIFIED ADJUSTED GROSS INCOME (NON-MAGI) PROGRAMS
Section 477-22-004 - UNEARNED INCOME

Universal Citation: 477 NE Admin Rules and Regs ch 22 ยง 004

Current through March 20, 2024

004.01 DEFINITION. Unearned income is any cash benefit that is not the direct result of labor or services performed by the individual as an employee or a self-employed person. Unearned income includes, but is not limited to:

(A) Retirement, Survivors, and Disability Insurance (RSDI) benifits;

(B) Railroad retirement benefits;

(C) Child, cash, and medical support;

(D) Military service benefits;

(E) Veteran's Affairs (VA) benefits;

(F) Civil service benefits;

(G) Unemployment compensation;

(H) Gifts or inheritance;

(I) Disability insurance benefits;

(J) Workers' compensation payments;

(K) Disability benefits, other than sick leave, paid by an employer;

(L) Returns from certain investments;

(M) Payments from an annuitized annuity; or

(N) Income from a life estate in real property.

004.02 PRORATION OF PERIODIC INCOME. When income is received annually, semi-annually, quarterly, or bi-monthly, the amount is prorated on a monthly basis.

004.02(A) PERIODIC INCOME PRIOR TO APPLICATION. If the most recent periodic payment has been received and spent before the initial application, then the income may be considered unavailable and is not counted. If the application is approved, the client must report the receipt of the next payment within ten days. All payments received after the application is approved are prorated on a monthly basis and used for eligibility.

004.03 POTENTIAL BENEFITS. Applicants and recipients of Medicaid must take all necessary steps to obtain any annuities, pensions, retirement, and disability benefits to which they are entitled, unless there is good cause shown for not doing so. Annuities, pensions, retirement, and disability benefits include, but are not limited to, veterans' compensation and pensions; retirement, survivors, and disability insurance (RSDI) benefits; railroad retirement benefits; unemployment compensation; and employer sponsored retirement benefits.

004.03(A) ELIGIBILITY DETERMINATION. If a client is otherwise eligible for Medicaid, then eligibility may be determined. The client will be notified that continued eligibility for Medicaid depends on their application for the potential benefit. A client has 60 days from the date of the notice to apply for a potential benefit.

004.03(B) REINSTATEMENT OF BENEFITS.

If a Medicaid client loses eligibility for a pre-existing benefit, then continued eligibility is dependent upon taking all necessary steps to reinstate the benefit. A client has 30 days to apply to reinstate the benefit.

004.04 SPECIFIC TYPES OF UNEARNED INCOME. Certain types of unearned income have specific rules which apply. These may be an exception to the general rule, a result from the application of other program rules, or may apply to only certain eligibility groups governed by this chapter.

004.04(A) CHILD OR SPOUSAL SUPPORT. Child, spousal, and cash medical support received by the individual is considered unearned income. If payment has been irregular or is less than the court ordered amount, then a three month average is used. If a portion of the payment has been retained by the Department to satisfy a debt to the state, then no more than the court-ordered amount will be used. When child support is paid to a child who is not in the home of the assistance unit, the payment is considered income of the child only when it is provided to the child.

004.04(B) CONTRIBUTIONS. Contributions are verified gifts, payments, or in-kind assistance given to members of the assistance unit by a third party. Contributions are considered unearned income subject to the exceptions below:
(i) A self-supporting individual who resides with the client pays the client for a portion of the shelter expenses or shares expenses with the client. This includes situations where more that one assistance unit resides at the same address;

(ii) An individual makes payments directly to a vendor on behalf of a client for items which are not food or shelter;

(iii) A client who has no income receives shelter from another individual due to a crisis situation and has made arrangement to pay the individual providing shelter when the client has income;

(iv) Contributions made directly to an alternate living arrangement for a Medicaid client in order for the client to have a private room in the facility; or

(v) Payment directly to a medical provider for services which are not covered by Medicaid.

004.04(C) INHERITENCE AND GIFTS. Gifts or inheritance received by a client are considered unearned income in the month of receipt or report and are counted in the first possible month considering adequate and timely notice. Any unspent remainder is considered a resource in the month after it is countable as income.

004.04(D) INSURANCE BENEFITS. Insurance settlements, benefits, and payments are countable as income depending on the type of payment made according to the rules below.
004.04(D)(i) INCOME PRODUCING. Payments from an income producing or income replacement policy are countable as unearned income. An income producing policy pays the beneficiary based upon the triggering of a specific event without regard to costs incurred or medical procedures which may be necessary.

004.04(D)(ii) REPLACEMENT. Payments made to replace or restore damaged property are not counted as income.

004.04(D)(iii) LIFE INSURANCE. Life insurance benefits paid are countable as unearned income. Any verified payments of debts or obligations of the deceased are subtracted from the countable amount.

004.04(D)(iv) SETTLEMENTS. Insurance payments received from a legal settlement are counted as unearned income. Any costs related to the cause of the settlement, including attorney fees, that the client is obligated to pay is deducted from the settlement amount.

004.04(E) CONTRACT PAYMENTS. If the client has sold property on contract and the contract is not a countable resource, then the full amount of the payment received is countable as unearned income. If the contract is a countable resource, and the client remains eligible, then only the interest portion of the payment is countable as unearned income.

004.04(F) LIFE ESTATE INCOME. Net income from property retained as a life estate when a client is the life tenant is countable as unearned income. The net income is determined by deducting payments for the cost of maintaining, repairing, or restoring property; and taxes due on the property from the gross amount received. Examples are available in the appendix to this chapter.

004.04(G) LUMP SUM PAYMENTS. Lump sum payments are considered income in the first possible month considering adequate and timely notice requirements. Any unspent remainder is considered a resource in the month after the lump sum is counted as income.
004.04(G)(i) BENEFIT EXCEPTION. Any lump sum received as the result of a retroactive determination of eligibility for retirement, survivors, and disability insurance (RSDI); supplemental security income (SSI); veterans' assistance (VA) benefits; or other entitlement benefit programs are not considered income when received.

004.04(H) MEDICAL PAYMENTS. Income received from a liable third party that pays the client directly is disregarded if it is refunded to the provider or the Department as reimbursement for a specific service. If the client fails or refuses to refund a payment due, then the payment is counted as unearned income in the first possible month, considering adequate and timely notice requirements.

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