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Effective: July 1, 2010 |
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20.25.75ar2 - Gift Income (Archive) |
Archived: June 1, 2011 |
A gift is unearned income. Gift income can be cash or in-kind. It can be received regularly or irregularly. Whether gift income is counted when determining income eligibility depends on what is received, how often it is received, the purpose of the gift, and the health care program the person is receiving or for which the person is applying.
Some gifts may be excluded under another provision. For example, a gift may qualify as a bill paid by a third party or as a reimbursement of a medical expense. See Excluded Income for more information.
See Budgeting Lump Sum Income for information on how to budget gift income.
Gifts of Cash for Tuition or Education.
Gifts of Cash for Prosthetic Devices.
Gifts to Children with Life-Threatening Conditions.
Treat gifts of cash as follows:
l MinnesotaCare.
n Count regular and frequent gift income.
n Exclude irregular or infrequent gift income.
m Gift income is infrequent if it received less than annually.
m Gift income is irregular if it is not possible to anticipate receiving.
Example:
The Brown family receives $10,000 every December from Mrs. Brown's parents.
Action:
Count this money as unearned income because it is received annually.
Example:
Sarah received a $500 gift from her uncle last year. She explains that it was a one-time gift because her uncle sold some stock.
Action:
Exclude this income.
Exception: Follow specific policy provisions for gifts of cash that are payments made by tax-exempt organizations to, or for the benefit of, children with life-threatening conditions
l MA Method A.
n Count gift income the client receives on a regular basis or gift income that exceeds $30 per calendar quarter.
n Exclude irregular cash gift income totaling $30 or less per calendar quarter for each person whose income is counted.
Example:
Martha applies for MA for herself and her children. Her parents give her $25 per month to help with expenses.
Action:
Count this gift as income because Martha receives it regularly and receives over $30 per calendar quarter.
Example:
Jennifer receives MA for herself and her two sons. Jennifer reports that she and the children each received $25 as a birthday gift.
Action:
Exclude this income because it totals less than $30 per person per quarter and is received infrequently.
Exceptions: Follow specific policy provisions for gifts of cash that are for prosthetic devices or payments made by tax-exempt organizations to or for the benefit of children with life-threatening conditions.
l MA Method B, GAMC, MA-EPD and MSP.
n Count regular and frequent gift income.
n Exclude the first $60 of irregular or infrequent gift income.
m Gift income is irregular if a person cannot reasonably expect to receive it.
m Gift income is infrequent regardless of whether or not payments occur in different calendar quarters if:
r a person receives it only once during a calendar quarter from a single source (a person, a household, an organization, or an investment.)
r the person did not receive it in the month immediately preceding that month or in the month immediately following that month,
Note: Gift income need only be irregular or infrequent to qualify for this exclusion. It does not need to be both irregular and infrequent.
Example:
Herman and Sheila receive MA. At renewal they report they received $65 as an anniversary gift from friends in April. Herman received $20 as a birthday gift from his mother in May. They do not expect to receive additional gifts during the calendar quarter.
Action:
Total all the irregular or infrequent unearned income ($85) and exclude the first $60. Count the remaining $25 as unearned income because it exceeds the first $60 in a calendar quarter.
Example:
Alice received $10 from her brother on her birthday. She also received $20 from her mother, and $5 from her nephew.
Action:
Alice received three birthday gifts of cash; the same type of income. However, because each gift was from a different person (source) all of the gifts are considered infrequent income.
Exceptions: Follow specific policy provisions for gifts of cash that are:
r for the specific purpose of paying the person’s tuition or other education-related expenses, or
r payments made by tax-exempt organizations to or for the benefit of children with life-threatening conditions.
l LTC: Count irregular and infrequent gift income.
Gifts of Cash for Tuition or Education
Treat gifts of cash that are for the specific purpose of paying the client’s tuition or other education-related expenses as follows:
Note: These gifts include funds deposited into an account under the Uniform Gifts to Minors Act (UGMA) or the Uniform Transfers to Minors Act (UTMA) by someone other than the client, to which the client does not have access.
Example:
Abigail is a 19 years old college student who lives on her own with her young child. Her father deposited money into an account under the UGMA. These funds are intended for Abigail’s college expenses. Abigail is not able to withdraw these funds until age 21. Her father withdraws funds from this account and pays tuition directly to the college.
Action:
Follow program provisions to determine if these funds are counted.
l MinnesotaCare: Follow Gifts of Cash MinnesotaCare policy.
l MA Method A: Exclude as income.
l MA Method B, GAMC, MA-EPD and MSP: Exclude as income.
l LTC: Count gifts of cash for tuition or education unless the gift of tuition went directly to the institution.
Gifts of Cash for Prosthetic Devices
Treat gifts of cash designated for the purchase of a prosthetic device not covered by insurance, other third-party payers, or medical assistance as follows:
l MinnesotaCare: Follow Gifts of Cash MinnesotaCare policy.
l MA Method A, MA Method B, GAMC, MA-EPD, MSP and LTC: Exclude as income.
Gifts to Children with Life-Threatening Conditions
Payments made by tax-exempt organizations to or for the benefit of children under age 18 with life-threatening conditions are treated differently than other types of gifts when determining income eligibility for some health care programs. These gifts include gifts to the child's parents for the child's benefit and indirect benefits to other family members, such as payment to accompany the child on a trip.
Note: Ask if the organization is a Section 501(c)(3) organization under the Internal Revenue Code of 1986 and is exempt from taxation under Section 501(a) if the tax-exempt status is unclear. Accept the organization's statement that the gift was made based on a child's life-threatening condition.
Treat these gifts as follows for all health care programs:
l Exclude the first $2,000 of total cash payments each year.
l Count as unearned income the amount of total cash payments that exceed $2,000 each year.
Example:
The Make-A-Wish Foundation provides Charlie, who has a terminal illness, with a trip to Florida to meet the Twins baseball players. The foundation pays for Charlie’s portion of the trip and provides the family with $5,000 to spend on their two-week vacation and pay for the parents’ flights.
Action:
Exclude $2,000 of the $5,000 provided to the family. Count the remaining $3,000 as income.
Note: Some gifts of cash to children with life-threatening conditions that exceed $2,000 may be excluded under other provisions. See Excluded Income (reimbursement of a medical expense), Gifts of Cash for Prosthetic Devices, and Lump Sum income.
l Exclude the value of in-kind gifts that are not converted to cash.
l Count the total value of in-kind gifts converted to cash in the month they are converted.
Exception: If the in-kind gift could be excluded under an asset exclusion, such as an automobile exclusion or household goods and personal effects, the cash is not countable as income in the month of conversion, but is a countable resource if retained into the following month.
Treatment of funds raised by a community group or organization depends on whether the funds are under the control of the applicant, enrollee or a responsible relative. Treat these funds as follows for all health care programs:
l Exclude funds that are not under the control of the applicant, enrollee or a responsible relative. Request verification that the funds are not directly accessible. The Request for Information Form (DHS-3271) can be used to request proof that the funds are not directly accessible.
Proof can be a letter from the organization or a bank stating that the funds are not directly accessible to the applicant, enrollee or a responsible relative.
Note: Treat funds as third-party liability and primary to MA if the funds are available to pay the client’s medical expenses. Enter a TPL Resource record with as much information as possible (such as, where bills must be sent).
l Determine whether any funds given directly to an applicant, enrollee or responsible relative are:
n reimbursement of, or payment for a medical expense,
n for a prosthetic device, or
n from a tax-exempt organization for the benefit of a child with a life-threatening illness.
If they are, follow Excluded Income, Gifts of Cash for Prosthetic Devices or Gifts to Children with Life-Threatening Conditions.
If they are not, follow Gifts of Cash.
Example:
The Children’s Organ Transplant Association (COTA) raised funds on behalf of Jenny Jones, who needs a heart transplant. These funds are not directly accessible to Jenny or her parents.
Action:
Request verification that the funds are not directly accessible to Jenny or her parents. Exclude these funds from Jenny’s income. Do not allow medical expenses paid by these funds to be used to meet a spenddown. Treat these funds as a third-party payment.
Follow in-kind income policy for all health care programs.
Exception: Follow specific policy provisions for in-kind gifts that are payments made by tax-exempt organizations to or for the benefit of children with life-threatening conditions.