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Effective: December 1, 2006 |
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21.50.45ar1 - Work Expense Deduction (Archive) |
Archived: April 1, 2009 |
The work expense deduction applies only to the MA program. The deduction is not available for MinnesotaCare or GAMC.
Conditions for Use - MA Method A.
Applying the Work Expense Deduction - MA Method A.
Applying the Pregnant Woman and Infant Work Expense Deduction - MA Method A.
Conditions for Use - MA Method B.
Applying the Work Expense Deduction - MA Method B.
Conditions for Use - MA Method A
The work expense deduction is applied to children ages 2-18 when determining if the 150% FPG income standard is met. See Applying the Work Expense Deduction - MA Method A.
Note: If the child does not meet the 150% FPG standard, do not allow the work expense deduction when determining whether the child can spend down to the 100% FPG standard.
Example:
Daniel applies for MA for his 10-year-old daughter Diana. Daniel earns $4500/month.
Action:
Deduct the work expense deduction from Daniel’s earned income. Daniel’s net income is deemed to Diana, and it exceeds the 150% FPG standard.
Determine if Diana can meet a spenddown using the 100% FPG standard. The work expense deduction is not used to calculate income for the 100% FPG standard.
A different work expense deduction is applied when determining if the following are less than the listed FPG income standard. See Applying the Pregnant Woman and Infant Work Expense Deduction - MA Method A.
Note: Do not allow any other deductions in the income calculation.
l Pregnant women - 275% FPG income standard.
l Infants through the month of their second birthday who are not eligible as an auto newborn - 280% FPG income standard.
Note: If income for the pregnant woman or infant exceeds the applicable standard, when determining whether the client can spend down to the 100% FPG standard, do not allow the work expense deduction (allow other applicable deductions).
Applying the Work Expense Deduction - MA Method A
For children ages 2-18 subtract the first $90 of the gross income from each of the following:
Note: Do not reduce income to less than 0.
l The of the child.
l The earned income of each person whose income is deemed to the child, regardless of whether the person is an applicant or enrollee.
Example:
Tracy applies for MA for her four-year-old son, Alex. Tracy earns $1500 per month. Alex earns $80 per month as a child model.
Action:
Subtract $90 from Tracy's income, and $90 from Alex’ income, leaving $1410. Count $0 earned income for Alex.
Applying the Pregnant Woman and Infant Work Expense Deduction - MA Method A
For pregnant women and infants who meet the Conditions for Use - MA Method A subtract the amount for the household size below from earned income.
Note: Deduct the special work expense once from the total combined gross earnings of the client and income deemed to them.
|
Household Size |
Work Expense Deduction |
|
1 |
$136 |
|
2 |
$140 |
|
3 |
$145 |
|
4 |
$149 |
|
5 |
$156 |
|
6 |
$161 |
|
7 |
$165 |
|
8 |
$170 |
|
9 |
$177 |
|
10 |
$181 |
|
Each Additional Person |
$5 |
Example:
Jamal and Sheila, a married couple, apply for MA for their one-year-old son Alex. Both Jamal and Sheila are employed and have day care expenses. No one in the household has received MA before.
Action:
First deduct $145 from the combined gross earnings. If income after the deduction is equal to or less than 280% FPG, Alex is eligible for MA without a spenddown. If income after the deduction exceeds 280% of FPG standard, Alex must spend down to the 100% of FPG standard. Recompute Jamal and Sheila's income without the $145 work expense deduction. Allow the dependent care deduction and the 17% earned income disregard.
Conditions for Use - MA Method B
Clients who use an eligibility basis based on age (65 or older) are not allowed a work expense deduction.
Note: This deduction is also used to determine eligibility for the Medicare Savings Programs.
Do not allow work expense deductions for items reimbursable or paid for by another source.
Note: When an expense qualifies both as a work expense and a Plan to Achieve Self-Support (PASS) deduction, the client must choose whether to allow the expense as a PASS disregard or a work expense deduction.
Applying the Work Expense Deduction - MA Method B
There is difference between what work expenses can be deducted for clients who use a disabled basis of eligibility and those who use a blind basis of eligibility.
l Disabled eligibility basis used.
n Allow actual impairment related work expenses as a deduction when both of the following apply:
m The client can reasonably show that a work expense is directly related to the disability.
m The work expense is necessary to produce earned income.
Example:
Jerry needs a special attachment for his prosthetic arm in order to perform his job. He is responsible to purchase it.
Action:
Allow the cost of the attachment as a work expense deduction.
n These work expenses are deducted after the $65 earned income disregard and before deducting one-half of the remaining earned income.
n Do not allow expenses for a transportation method also used by non-disabled people such as a bus or unmodified vehicle.
Example:
Jolene takes the metro bus to work because she cannot drive due to her disability.
Action:
Do not allow the cost of the bus as a work expense. Jolene would have to pay to ride the bus to work if she was not disabled.
n If transportation expenses are allowed, such as for a modified vehicle, and the client is using mileage as a deduction, use the same rate allowed as a flat rate deduction for self-employed people. See Transportation.
l Blind eligibility basis used.
n Allow any work expense as a deduction when a client can reasonably show it relates directly to producing earned income.
n Allow a deduction for income or FICA taxes withheld from earnings.
n If transportation expenses are allowed, use the same rate allowed as a flat rate deduction for self-employed people.
n These work expenses are deducted after the entire earned income disregard.