Medical Assistance for People Who Are Age 65 or Older and People Who Are Blind or Have a Disability
2.3.3.3.2.2 Disregards and Deductions
Disregards and deductions reduce the household income of a person under Medical Assistance for People Who Are Age 65 or Older and People Who Are Blind or Have a Disability (MA-ABD).
This section provides information on disregards and deductions and the conditions that must be met to apply them.
Unearned Income Deductions
The following list are the disregards and deductions that are deducted from the specific unearned income:
The following disregards and deductions are then deducted in the specific order listed:
Earned Income Deductions
This section provides information on the disregards and deductions that are deducted from specific earned income:
The following disregards and deductions are then deducted in the specific order listed:
Blind Work Expenses
Blind Work Expenses (BWE) that are reasonably attributable to earning income are excluded from earned income.
BWEs can be excluded if the blind person:
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is younger than age 65; or
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is age 65 or older and received Supplemental Security Income (SSI) payments due to blindness for the month before attaining age 65.
The BWEs are excluded from earned income after applying all other earned income exclusions except for PASS.
Work-related items paid by a blind person may be excluded as BWE regardless of:
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any non-work benefit that may be derived from the item; or
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the item’s relationship to the person’s blindness.
BWEs include, but are not limited to:
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Attendant care services in the:
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Home, if related to preparing to go to work or assistance immediately upon returning home from work
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Process of assisting a person making the trip to and from work
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Work setting
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Drugs and medical services which are essential to enable the person to work
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Expendable medical supplies including bandages, catheters, etc.
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Federal, State and local income taxes
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Social Security and Medicare taxes
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Service dog, including cost of dog and associated expenses
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Fees, including licenses, professional association dues, union dues, etc.
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Mandatory contributions, including pensions, disability insurance, etc.
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Meals during work hours
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Medical devices including wheelchairs, braces, etc.
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Non-medical equipment and services including child care, uniforms etc.
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Other work-related equipment and services including job coaching, vision and sensory aids, etc.
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Physical therapy
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Prosthesis
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Structural modifications to the person’s home to create a work space or to allow the person to get to and from work
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Training reasonably attributable to work. General education courses are not included.
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Transportation to and from work
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Vehicle modification
The following items cannot be excluded as BWE:
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In-kind payments
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Expenses deducted under other provisions (e.g., PASS)
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Expenses which will be reimbursed
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Life maintenance expenses, including, but not limited to:
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meals consumed outside of work hours;
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self-care items (including items of cosmetic rather than work-related nature);
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general educational development;
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savings plans (e.g., Individual Retirement Accounts (IRAs) or voluntary pensions); and
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life and health insurance premiums
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Items furnished by others that are needed in order to work (the value of such items is not income)
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Expenses claimed on a self-employment tax return
Child Support Payments Exclusion
Child support payments are unearned income to the child and one-third of the amount is excluded. Any in-kind child support is not income.
Dependent RSDI Benefit Exclusion
RSDI dependent benefits for children who receive MA under the Tax Equity and Fiscal Responsibility Act (TEFRA) option or receive services through a Brain Injury (BI), Community Alternative Care (CAC), Community Access for Disability Inclusion (CADI), or Developmental Disabilities (DD) waiver are excluded.
Disabled Adult Child Disregard
The Disabled Adult Child Disregard allows for the disregard of Disabled Adult Child RSDI benefits.
To qualify for the Disabled Adult Child Disregard, a person must meet all of the following conditions:
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Is currently age 18 or older
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Became blind or disabled before reaching the age of 22
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Received SSI benefits on the basis of blindness or disability
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Lost eligibility for SSI on or after July 1, 1987, due to entitlement to RSDI Disabled Adult Child benefits, or increased RSDI Disabled Adult Child benefits based on disability, retirement or death of a parent
For people who meet the qualifications for the disregard, the Disabled Adult Child RSDI benefits are not counted.
People who receive Disabled Adult Child benefits as defined by the Social Security Administration (SSA), but do not meet the criteria above, are not eligible for the Disabled Adult Child Disregard.
Do not use the disregard on any other income, including RSDI benefits the person receives on their own account.
Disabled Widow and Widower Disregard
The Disabled Widow and Widower Disregard allows for the disregard of RSDI benefits.
To qualify for the Disabled Widow and Widower Disregard, a person must meet all of the following conditions:
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Is currently receiving either:
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RSDI Disabled Widow or Widower benefits
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Disabled Surviving Divorced Spouse benefits
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Is age 50 but not yet 60 and is certified disabled, or is age 60 but has not yet reached full retirement age
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Received SSI or Minnesota Supplemental Aid (MSA) benefits the month before the month they began receiving RSDI Disabled Widow or Widower or Disabled Surviving Divorced Spouse benefits
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Lost SSI or MSA eligibility on or after January 1, 1991, due to the SSI requirement to apply for and receive RSDI Disabled Widow or Widower or Disabled Surviving Divorced Spouse benefits
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Remaining income would be at or below the current SSI or MSA benefit rate if RSDI income is disregarded
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Is not entitled to Medicare Part A
Eligibility for the disregard ends the first full month a person is eligible for Medicare Part A.
Earned Income Disregard
The Earned Income Disregard allows for the disregard of a person’s first $65 of earned income, including income that deems to the person.
Earned Lump Sum Income Disregard
The first $30 of irregular or infrequent earned lump sum, non-gift, income from an employer, trade or business is disregarded.
Impairment-Related Work Expense Deduction
The Impairment-Related Work Expense (IRWE) Deduction allows for the deduction of certain expenses incurred during the course of earning income. It applies to people who are certified disabled and under age 65, or people who received SSI or MSA as a disabled person the month before attaining age 65.
An IRWE is an expense for items or services that directly enable a person with a disability to work, and are incurred because of a physical or mental impairment.
IRWEs are deducted if all of the following are true:
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The severity of the impairment requires the person to purchase or rent items and services in order to work.
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The expense is reasonable.
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The person pays the cost and is not reimbursed from another source, such as Medicare or private insurance.
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One of the following occurs:
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The person pays the expense in the month he or she receives the earned income, and the income is for work they did in the same month as using the item or service.
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The person is working but pays the expense before receiving the earned income.
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The IRWEs are excluded from earned income after applying one-half of the remaining earned income deduction. See Earned Income Disregard for more information.
IRWEs include, but are not limited to:
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Attendant care services in the:
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Home, if related to preparing to go to work or assistance immediately upon returning home from work
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Process of assisting a person making the trip to and from work
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Work setting
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Drugs and medical services which are essential to enable the person to work
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Expendable medical supplies including bandages, catheters, etc.
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Service dog, including cost of dog and associated expenses
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Medical devices including wheelchairs, braces, etc.
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Non-medical equipment and services directly related to the impairment
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Other work-related equipment and services including job coaching, vision and sensory aids, etc.
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Physical therapy
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Prosthesis
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Structural modifications to the person’s home to create a work space or to allow the person to get to and from work
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Training reasonably attributable to work. General education courses are not included.
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Transportation to and from work
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Vehicle modification
Expenses for a transportation method also used by people who are not disabled, such as a bus or unmodified vehicle, is not deductible.
Plan to Achieve Self Support (PASS) Deduction
The Plan to Achieve Self Support (PASS) deduction allows for the deduction of earned and unearned income set aside under an approved PASS plan. The PASS exclusion is not available for people age 65 and older, unless they were receiving SSI payments for the month before they became 65. The PASS plan can only be approved by SSA. For this deduction the PASS plan must be verified.
Pickle Disregard
The Pickle Disregard allows for the disregard of RSDI cost of living adjustment (COLA) amounts.
To qualify for the Pickle Disregard, a person must:
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Currently receive or is entitled to receive RSDI benefits
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Have been eligible for 1619(b) or was eligible for and received SSI, MSA or 1619(a) benefits while concurrently entitled to or receiving RSDI in any month since April 1, 1977
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Lost eligibility for SSI, MSA, 1619(a) or 1619(b) for any reason
If a person meets the above requirements, they are referred to as a “potential Pickle.” The Pickle threshold date must then be determined. A person’s Pickle threshold date is the more recent of the following two dates:
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April 1, 1977; or
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The last month the person was eligible for and received at least one of the following benefits at the same time the person received RSDI benefits or was entitled to RSDI benefits:
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1619(a) or 1619(b),
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MSA, or
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SSI
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After determining the Pickle threshold date, the amount of the RSDI benefit the person received on the threshold date must be determined. All RSDI COLA increases received back to the Pickle threshold date are excluded.
A person who meets all of the conditions listed must have a net income, with the Pickle Disregard and all applicable earned and unearned income disregards, that is less than the current SSI payment amount. If the person’s net income is greater than the SSI payment amount, they may still receive the Pickle Disregard if their net income is less than the MSA standard.
When a person eligible for the Pickle Disregard also has a spouse or parent that is eligible for the Pickle Disregard, the disregard is applied when deeming income.
RSDI COLA Disregard
The RSDI COLA Disregard allows for the disregard of the annual RSDI COLA increase. The COLA increase amount for RSDI benefits is excluded from January 1 through June 30 of each calendar year. Beginning each July 1, all gross RSDI benefits are counted.
The RSDI COLA Disregard is not available to applicants or enrollees who did not receive RSDI in the previous calendar year. The RSDI COLA Disregard is not applied in the long-term care (LTC) income calculation.
Remaining Earned Income Disregard
One-half of the remaining earned income is excluded.
Student Earned Income Exclusion
The student earned income exclusion allows for the limited disregard of a student’s earned income. There is a cap on how much of a student’s earned income is excluded for MA-ABD eligibility in a calendar year. The amount changes annually. See Appendix F Standards and Guidelines for the current cap amount.
To qualify for the student earned income exclusion a person must:
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Have earned income
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Be younger than age 22
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Be certified as blind or disabled by the SSA or State Medical Review Team (SMRT)
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Regularly attend school by taking one or more courses of study and attend classes:
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in a college or university for at least eight hours per week under a semester or quarter system
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in grades 7–12 for at least 12 hours per week
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in a course of training to prepare for a paying job at least 15 hours per week if the course involves shop practice, or 12 hours per week if it does not involve shop practice
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for less than the required time for reasons beyond the student’s control, such as illness, if the circumstances justify the reduced credit load or attendance
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A person must meet the following additional requirements in these situations:
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Homeschooled students must:
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be in grades 7–12, and
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follow Minnesota home school laws
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Homebound students must:
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stay home because of a disability;
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study a course or courses given by a school in grades 7–12, college, university, or government agency; and
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have a home visitor or tutor from school who directs the studying or training.
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Online students must:
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study a course or courses given by a school in grades 7–12, college, university, or government agency; and
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enroll in an online school authorized by the laws of the state in which the online school is located.
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A person maintains status as a student while classes are out on a standard school break if the student attended classes regularly prior to the break and intends to resume classes regularly when school reopens.
Unearned Lump Sum Income Disregard
The first $60 of irregular or infrequent unearned lump sum income is disregarded.
Widow and Widower Disregard
The Widow and Widower’s Disregard allows for the disregard of RSDI COLA increases. To qualify for the disregard, a person must:
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Currently receive RSDI
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Have filed an MA application before July 1,1988
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Has been entitled to receive RSDI continuously since December 1983
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Have been a disabled widow or widower in January 1984
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Established a right to receive RSDI benefits before age 60
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Have been eligible for SSI or MSA benefits before application of the revised actuarial reduction formula
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Lost eligibility for SSI or MSA benefits as a result of the change in the actuarial reduction formula
If a person meets the above requirements, all RSDI COLA increases effective on and after January 1, 1984 are excluded.
Legal Citations
Code of Federal Regulations, title 42, section 435.135
Code of Federal Regulations, title 42, section 435.137