Effective: June 1, 2011
21.50.50 - Earned Income Disregard - MA Method A
The MA Method A earned income disregard is a time-limited disregard of 17% of earned income Money received from employment or self-employment. This includes but is not limited to salaries, wages, tips, commissions, vacation, and sick pay.. It applies to certain people who use MA Method A income rules.
Conditions for Use.
Disregard Time Limits.
When to Begin the Disregard.
Applying the Disregard.
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Conditions for Use
The following people are eligible for the Method A earned income disregard when their earned income is used to determine eligibility for themselves or another household member:
Note: Employed people in the same household can be eligible for the earned income disregard concurrently or at different times.
l Children ages 19 and 20.
l Parents and caretakers.
l Children ages two to 19 whose income exceeds 150% FPG after applying the Child work expense deduction and must spenddown to 100% FPG.
Note: Do not use the Method A earned income disregard if income of these children is equal to or less than 150% FPG because the disregard is included in the standard.
l Pregnant women who spend down to 100% FPG because income exceeds 275% FPG plus the Pregnant Women and Infant work expense deduction.
Note: If income of these pregnant women is equal to or less than 275% FPG the Method A earned income disregard cannot be used because the disregard is included in the standard.
l Children from birth through the month of their second birthday who are not an auto newborn A basis of eligibility for a child who receives automatic MA or MCRE eligibility through the month of his or her first birthday. The child's mother must have been enrolled in a Minnesota Health Care Program during the month of birth and the child must continue to live with the mother in Minnesota. who spend down to 100% FPG because income exceeds 280% FPG plus the Pregnant Women and Infant work expense deduction.
Note: If income of these children is equal to or less than 280% FPG the Method A earned income disregard cannot be used because the disregard is included in the standard.
Apply the earned income disregard cycle when there is at least $1 of earned income. Apply the disregard even if the client would be income-eligible without it.
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Disregard Time Limits
Allow the disregard for a maximum of four consecutive months.
The disregard cannot be used again after the four months have been used unless both of these criteria are met:
The wage earner, his or her spouse and child under
21 are off of MA for 12 or more consecutive months and reapply.
Begin counting the 12 continuous months without MA with the month after the last month for which the client's income was used to determine MA eligibility.
l The wage earner’s income is not used to determine the wage earner’s eligibility or deemed to another person to determine that person’s eligibility for 12 or more consecutive months.
Do not consider the following when determining whether or not the disregard may be used again:
l Receipt of MA in another state.
l Disregards used in determining eligibility for a cash program with automatic MA.
l Earned income disregards received in another state.
Sandra applies for MA for herself and her son, Derek, beginning in July. Her husband, Keith, is Derek's stepfather, and is not requesting MA for himself. Keith has earned income.
Due to deeming requirements, use Keith’s earned income to determine Sandra's eligibility. Apply the Method A earned income disregard to Keith’s gross earned income for July, August, September, and October.
Keith's 18-year-old son moves in with the household and Keith requests coverage for him beginning in December.
Do not apply an earned income disregard when deeming Keith's income to his son because Keith used the earned income disregard to determine Sandra's eligibility within the previous 12 months.
Sherry received TYMA from March through the following February. The earned income disregard cycle ended the month before her TYMA began. She requests continued MA when her TYMA ends.
She is not entitled to a new four-month disregard cycle because she has not been without MA for 12 consecutive months.
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When to Begin the Disregard
Begin the earned income disregard cycle when there is at least $1 of earned income to apply to the disregard.
Note: Apply the disregard even if the client would be income eligible without it.
The disregard can be started over in either of these situations:
l There is no earned income to apply the disregard to.
l The person does not receive MA in the second, third or fourth months of the cycle.
Annette applies for MA for herself and her daughter in March. She receives wages in March, but will not receive any earnings in April because her employer has no work for her. She will begin receiving earnings again in May.
Annette is entitled to the earned income disregard in March. Start the cycle over in May since she had no earnings in April.
Do not start the disregard over when a client requests closure of MA to avoid using the disregard. The disregard cycle will not stop in this case.
Note: Clients lose their earned income disregards the month following the month they voluntarily request closure of MA to avoid using the earned income disregard.
Joe applies for MA for himself and his children beginning in June. He is employed. His earnings are below the applicable standard when the earnings disregard is applied, but will exceed the standard when the cycle ends. He requests MA closed for September and then requests to reapply for October to start a new four-month cycle.
Continue to count September as the fourth month of the earned income disregard cycle.
The earned income disregard cycle is running for the following people, even though the actual disregard is not being used in the income calculation:
l When a pregnant woman has earned income and her income is at or below 275% FPG, the disregard cycle begins and follows standard time limit rules, but the disregard is not subtracted from the pregnant woman’s income.
Stella, a pregnant woman with no other children, applies for MA in April. Her child is due July 15. She is employed and is not requesting retroactive MA because the health insurance she has through her employer has covered all her bills to date. Her income is under 275% FPG. Stella begins a maternity leave on June 30 and receives her last pay check on July 7. She returns to work on September 15 and receives her first pay check on September 22.
Because Stella is pregnant and her income is less than 275% FPG, the earned income disregard is not used in her income calculation. However, because Stella received earned income in each of those months, count April, May, June, and July as the four months of the 17% disregard.
l When the spouse's or parent's income is deemed to a pregnant woman, infant under age two or child ages two through 18, the disregard cycle begins, but the disregard is not subtracted from the pregnant woman’s, infant’s, or child’s income.
Note: The earned income disregard does not apply to infants who are eligible as auto newborns A basis of eligibility for a child who receives automatic MA or MCRE eligibility through the month of his or her first birthday. The child's mother must have been enrolled in a Minnesota Health Care Program during the month of birth and the child must continue to live with the mother in Minnesota., because no income is deemed to these infants.
Paula, a pregnant woman, lives with her husband Ron. Paula applies for MA in June. Ron is working full time. Paula began a maternity leave in May because of pregnancy complications. She received her last pay check in May and began receiving payments from a disability insurance policy in June. Household income is under 275% FPG. She is not requesting retroactive coverage.
Because Paula is pregnant with income below 275%, the earned income disregard time limit is running, but the disregard is not subtracted from her earned income.
Ron’s earned income is deemed to Paula to determine her eligibility. Ron’s earned income disregard cycle begins in June and ends in September.
Paula does not have earned income and will not be using her earned income disregard. Begin the cycle when Paula returns to work if she is still receiving or requesting MA.
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Applying the Disregard
Follow these rules when applying the Method A earned income disregard for people meeting the conditions:
l Subtract 17% of a person’s gross earned income.
Note: Do not reduce earned income to less than $0 or use earned income disregards to reduce unearned income.
Jeanna applies for MA for herself and her son Roger, age nine. She is employed part-time earning $200 per month. Her son receives RSDI of $400 per month.
For Jeanna’s eligibility deduct the 17% earned income disregard from her gross income. ($200 - $34 = $166).
Because Roger is a child with income below 150% FPG, he is not eligible for the disregard. Do not subtract the disregard from Jeanna’s income before deeming to Roger. Roger's total net income is ($200 + $400 = $600).
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