Medical Assistance for People Who Are Age 65 or Older and People Who Are Blind or Have a Disability

2.3.3.3.2.1 Countable Income

This policy provides information on types of income that must be counted when calculating a person’s income for Medical Assistance (MA) for People Who Are Age 65 or Older and People Who Are Blind or Have a Disability (MA-ABD) and Medicare Savings Programs (MSP). With some exceptions, MA-ABD uses the methodology of the Social Security Income (SSI) program to determine countable income. Some of these types of income are subject to disregards and deductions; see the MA-ABD Disregards and Deductions policy for more information. See the MSP chapter for more information.

Income is counted in the month it is received.

What is not Income

Some items received by a person are not counted as income in the month received. See MA-ABD Countable Assets and MA-ABD Excluded Assets for more information on how these items are treated if retained after the month of receipt. Items that are not income include, but are not limited to:

  • Amounts withheld from unearned income, if both of the following conditions are met:

    • The income is being reduced to repay a prior overpayment from the same source; and

    • The overpaid amount was previously counted as unearned income for MA eligibility.

  • Bona fide loans, including student loans, because of the obligation to repay

  • Conversion of assets. This includes, but is not limited to, cash received from the sale of assets, money withdrawn from savings accounts or other liquid assets, reverse mortgages, etc.

  • Distributions from a Health Flexible Spending Arrangement (FSA), A Health Reimbursement Arrangement (HRA), or a Health Savings Account (HSA)

  • Free rent in exchange for caretaking duties. If the caretaker receives a paycheck with an amount for rent deducted, the gross earnings are earned income, not in-kind income.

  • Interest on countable assets

  • In-kind benefits or payments

  • Rebates, refunds, or other return of money that has already been counted.

Earned Income

Earned income is cash people receive in exchange for work or service, including employment and self-employment. See Appendix B Types of Income for descriptions of the different types of income. The following types of earned income is counted:

  • Employee income, including, but not limited to:

    • Cash payments to clergy for housing

    • Commissions

    • Severance pay, based on accrued leave time

    • Tips

    • Vacation donation compensation

    • Wages

  • Irregular or infrequent earned lump sum, non-gift, or income from an employer, trade or business. See MA-ABD Disregards and Deductions, earned lump sum income, for more information.

  • Net earnings from self-employment, which is the gross income minus all expenses the Internal Revenue Service (IRS) allows as a self-employment expense. Self-employment income losses are deducted from other household earned income.

  • Net rental income, which is the gross rental income minus verified rental and repair expenses, when the person spends an average of at least 10 hours per week maintaining or managing the property. See Rental Income for more information.  

  • Other income received in exchange for work or service, including, but not limited to:

    • Jury duty pay

    • Picket duty pay

    • Blood and blood plasma sales

    • Royalties and honoraria

Unearned Income

Unearned income is cash that people receive without being required to perform work or service. The following types of unearned income is counted in a person’s income calculation:

  • Annuity payments

  • Child support and arrearage payments made for a deceased child are counted for the person who receives the payment.

  • Child support and arrearage payments are unearned income for the child, excluding:

    • Court ordered medical support

    • Payments to reimburse the custodial parent for medical expenses

    • Child support and arrearage payments received and retained by the county child support enforcement agency on behalf of a child enrolled in the Minnesota Family Investment Program (MFIP) or foster care

    • Child support payments received by or on behalf of children who:

      • Receive services through the Brain Injury (BI), Community Alternative Care (CAC), Community Access for Disability Inclusion (CADI) or Developmental Disabilities (DD) waiver

      • Are enrolled in MA under the TEFRA option

  • Disability payments that are part of the employer’s benefit package

  • Extended income support payments through the Trade Adjustment Reform Act (TAA)

  • Interest and dividends earned on excluded assets, unless otherwise excluded. See MA-ABD Countable Assets and MA-ABD Excluded Assets for more information on how these items are treated.

  • Irregular or infrequent unearned lump sum income from an individual, organization, or investment. See MA-ABD Disregards and Deductions, unearned lump sum income, for more information.

  • Net rental income, which is the rental income minus verified rental and repair expenses, when the person spends an average of less than 10 hours per week maintaining or managing the property. See Rental Income for more information. 

  • Regular and frequent gift income

  • Retirement, Survivor's, and Disability Insurance (RSDI). See MA-ABD Disregards and Deductions, dependent RSDI benefits, for more information.

  • RSDI or Veterans Benefits for the Elderly reissued because an individual representative payee of 15 or more beneficiaries or an organization representative payee misused benefits is counted as income in the month received only if the original payment was not used to determine eligibility

  • Retroactive RSDI lump sum payments are counted in the month received

  • Pension or retirement benefits from public or private sources

  • Severance pay that is not based on accrued leave time

  • Spousal maintenance

  • Student financial aid, in the following situations:

    • Earnings through the Federal Work Study program are counted for MA for Employed Persons with Disabilities (MA-EPD) if:

      • Average gross monthly earnings exceed $65

      • Social Security and Medicare taxes are withheld

    • Non-Title IV of the Higher Education Act (HEA) and Non-Bureau of Indian Affairs (BIA) grants, scholarships, fellowships and other non-loan financial aid not used for or set aside for educational expenses.

    • Distributions from a Coverdell Educational Savings Accounts (ESA) not used for or set aside for educational expenses.

  • Tribal per capita payments from casinos

  • Unemployment Insurance

  • Veteran's Administration (VA) benefits

  • Workers' Compensation

Availability of Income

For MA-ABD and MSP, income is available when the person has a legal interest and the ability to use that income for support and maintenance. Available income is counted unless it is excluded under another policy; income that is not available is not counted toward a person’s income limit. See MA-ABD Excluded Income and MA-ABD Disregards and Deductions for more information about other excluded income provisions. Income is usually available in the following situations:

  • The person receives the income

  • Someone else receives the income on the person’s behalf

  • The employer or other payer owes the person money, but withholds the income at the person or the court’s request

  • Income is withheld from payments due to a garnishment or to pay a legal debt or obligation

For MA-ABD and MSP, income is unavailable when the person:

  • Cannot gain access to the income

  • Receives money to cover someone else’s expenses and then uses that money to pay those expenses

  • Receives benefits under credit life and disability insurance coverage. Payments under these policies cover payments on loans, mortgages, etc. in the event of death or disability. These insurance payments are sent directly to the loan or mortgage company and are not available to the person.

A person must try to gain access to potentially available income.

Rental Income

Rental income is any payment received for the use or occupation of real property. These policies apply to both earned and unearned rental income.

  • Net rental income is the gross rental income minus verified rental and repair expenses (allowable expenses).

    • When allowable expenses paid in a month exceed the gross rental income in the same month, the excess expenses can be subtracted from the next month's gross rental income.

  • Security or other deposits held for the tenant are not income while subject to return to the tenant. At the time any amount is used or no longer held for the tenant, it is income.

Prorating Rental Income

If expenses are incurred, but only a portion of those expenses apply to the property that is for rent, then the following prorating policies apply:

  • In multiple family residences:

    • If the units in the building are of approximately equal size, allowable expenses must be prorated on the number of units designated for rent compared to the total number of units.

    • If the units are not of approximately equal size, allowable expenses must be prorated based on the number of rooms in the rental units compared to the total number of rooms in the building. (The rooms do not have to be occupied).

    • Any expenses strictly related to a particular rental unit are deduced in total from the rent for that unit. Those expenses are not prorated.

  • In rooms in a single residence:

    • Allowable expenses must be prorated based on the number of rooms designated for rent compared to the number of rooms in the house.

    • Bathrooms do not count as rooms in the house. Basements and attics only count if they have been converted to living spaces (e.g., recreation rooms).

    • Any expenses strictly related to a particular rental room are deducted in total from the rent for that room. Those expenses are not prorated.

  • On Land:

    • Expenses are prorated based on the percentage of total acres for rent.

Legal Citations

Code of Federal Regulations, title 42, section 435.631

Code of Federal Regulations, title 42, section 435.831

Minnesota Statutes, section 256B.056, subdivision 4

Published: December 1, 2022

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