Computation of Parental Fees (Archive)

The Department of Human Services (DHS) uses the following formula to compute parental fees for disabled children. Counties may use this formula to assess parental fees for social services costs but are not required to do so.

Computation Steps and Fee Schedule.

Variance for Undue Hardship.

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Computation Steps and Fee Schedule

1. Begin with the parent's adjusted gross income (AGI) as reported on the previous year's Federal Tax Form 1040 (line 37) or 1040A (line 21). Do not include income of stepparents.

For example, use the AGI from the parent’s 2009 tax form to calculate parental fees for state fiscal year A 12-month accounting period. The DHS fiscal year begins July 1 and ends June 30. The fiscal year is designated by the calendar year in which it ends. For example, fiscal year 2009 is the year that begins July 1, 2008, and ends June 30, 2009. 2011.

2. If the child lives with the parent, subtract $2,400 from the AGI of the parent with whom the child lives.

3. If the parents live apart, subtract any court-ordered child support paid for the child receiving services from the AGI of the parent paying the support.

Note:  Subtract only current court-ordered child support payments; do not subtract arrearages Payments of child support which were due for a prior period..

4. Compare the result to the federal poverty guidelines for the household size. Count the child receiving MA services in the household size. Also count parents and dependents. Do not count stepparents or stepchildren in the household size.

The parental fee schedule effective July 1, 2010 is:

5. Divide annual fees by 12 to arrive at a monthly fee for billing purposes. Increase the monthly fee by 5% if the parents fail to obtain health insurance coverage for the child that is available through an employer at an annual cost to the parent of no more than 5% of the household's federal adjusted gross income.

Once the fee has been calculated, parents receive a determination order that indicates what their fee will be for the fiscal year A 12-month accounting period. The DHS fiscal year begins July 1 and ends June 30. The fiscal year is designated by the calendar year in which it ends. For example, fiscal year 2009 is the year that begins July 1, 2008, and ends June 30, 2009.. The fee will be annualized to assist parents in making monthly payments.

Parental fee amounts can change each fiscal year due to annual changes in the FPG or changes in AGI or family size. Parents are obligated to notify DHS when there is a change in household size or when there is a loss or gain in income from one month to another in excess of 10%. Parents can do this by sending a letter to:

Department of Human Services

Financial Operations Division

PO Box 64171

St. Paul, MN  55164-0171

Details of this process are included in the determination order.

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Variance for Undue Hardship

DHS determines if a variance may be granted. Parents may request a variance of the parental fee when they incur any of the following expenses listed below that are not reimbursed by any public or private sector by sending a letter to DHS:

1. Payments for medical expenses not covered by Medical Assistance or health insurance, but that would be allowable under the Internal Revenue Code.

2. Expenditures for adaptations to the parents’ vehicle that are necessary to accommodate the child’s medical needs and are a type that would be allowable as a federal tax deduction under the Internal Revenue Code.

3. Expenditures for physical adaptations to the child’s home that are necessary to accommodate the child’s physical, behavioral, or sensory needs and are a type that would be allowable as a deductible medical expense under Internal Revenue Code.

4. Unexpected, sudden or unusual expenditures by the parents since the last renewal or within the past 12 months that are not reimbursed by any type of insurance or civil action and which are a type allowable as a casualty loss deduction under the Internal Revenue Code.

5. Peculiar tax status. A variance may be requested if parents can show that, as a result of the parents’ peculiar tax status, there is a gross disparity between the amount of income allocated to the parents and the amount of the cash distributions made to the parents. This variance must adversely affect the parents’ ability to pay the fee.

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