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Effective: March 1, 2009 |
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20.25.50ar3 - Interest and Dividends (Archive) |
Archived: June 1, 2011 |
Interest income is:
l Money paid to the holder of a bank account, loan, or other investment. Interest may be credited to the account or paid directly to the owner, or
l Money charged as a borrower's fee on a loan.
Dividend income is:
l The amount of the profit distribution a shareholder receives, or
l The amount of the surplus distribution a policyholder of an insurance policy receives.
MA Method B, MA-EPD, Medicare Savings Programs, and GAMC.
Count as unearned income interest and dividends paid or credited directly to the household at least annually.
Count as earned income dividends earned as part of a self-employment operation, such as dividends from ownership interest in a C-Corporation.
Note: The HCAPP asks applicants and enrollees to report any interest and dividend income. Interest and dividend payments are also shown on tax forms when tax forms are used to verify income.
Example:
The Jones family has a savings account with a balance of $5,000. Interest of $60 is credited to the account each quarter. It is not paid directly to the family. The bank reports the interest annually to the Internal Revenue Service and it is included on the family's tax forms.
Action:
Count the interest as unearned income.
Example:
John owns stock in ABC Corporation. He is not an employee of the corporation. He receives a dividend check every three months that is reported on his tax return.
Action:
Count the dividend payment as unearned income.
Example:
Susie is a minor child. A trust fund of $50,000 was set up on her behalf as a result of an auto accident. She and her parents cannot gain access to the trust principal without court approval. However, her parents report that they receive a monthly check representing interest earned by the trust.
Action:
Count the monthly payment as unearned income.
Example:
George has ownership interest in a C-corporation. He is also an officer of the corporation and receives wages. His share of corporate dividends is reported yearly and included on his tax return.
Action:
Count the dividends as part of his annual self-employment income.
Note: Counted interest or dividends may be excluded as irregular or infrequent income. See lump sum policy for more information.
Exclude as income any interest or dividends from assets, including amounts accrued on the asset, which when combined with other assets are within and counted toward the asset limit.
Count all other interest or dividends as unearned income, including the interest portion received in payments on contracts for deed, promissory notes, and loans.
Example:
Al lives with his infant son and receives MA. He has a savings account with $9,500, which is within his $20,000 asset limit. At the time of his annual recertification, he reports that $75 in interest has been credited to the account in the past year.
Action:
Exclude the interest as income because the total account balance remains within the asset limit.
Note: Counted interest or dividends may be excluded as irregular or infrequent income. See lump sum policy for more information.
MA Method B, MA-EPD, Medicare Savings Programs, and GAMC
Exclude as income interest or dividends earned on assets (except as noted later in this section). This includes interest accrued on an asset that is designated as a burial fund, as long as it remains in the fund.
Count as unearned income interest or dividends earned on the following assets:
l Unspent tax refunds related to an Earned Income Tax Credit (EITC) or Child Tax Credit (CTC).
l Unspent federal relocation assistance payments.
l Payments to replace lost, damaged or destroyed assets which are no longer excluded assets.
l Payments to replace lost, damaged, or destroyed assets if the payment is no longer an excluded asset.
l Gifts to children with life-threatening conditions under section 1613 (a) (13) of the Social Security Act.
l Victim’s compensation payments.
l Financial aid which is neither Title IV nor issued by the Bureau of Indian Affairs (BIA) program. Such aid includes any of the following:
n Grants.
n Scholarships.
n Fellowships.
n Gifts used or intended to pay tuition, fees, or other necessary educational expenses at an educational institution, including vocational or technical education.
l Life insurance policies which pay interest on dividend accumulations.
l Proceeds from the sale of a home which are excluded as an asset.
l The principal portion of loan repayments owed to the client, including payments received on contracts for deed and promissory notes.
Note: Counted interest or dividends may be excluded as irregular or infrequent income. See Lump Sum Income for more information.
Count interest and dividends as unearned income in the month received when using a LTC income calculation.
Exception: Exclude interest accrued on an asset that is designated as a burial fund as long as it remains in the fund.
Note: Counted interest or dividends may be excluded as irregular or infrequent income. See Lump Sum Income for more information.