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Effective: December 1, 2006 |
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23.40.05ar1 - LTC Income (Archive) |
Archived: December 1, 2007 |
This section provides policy detail for counting different types of income in the LTC income calculation.
Do not average or annualize income of the LTC client. Count the income the client receives in a month following the policy outlined in this section.
Note: Estimate future income as accurately as possible.
Follow policy established in Availability of Income when determining if an income source could be counted. When specific program provisions are listed follow MA Method B.
If the client is employed count the following types of gross earned income:
l Net self-employment income.
Allow self-employment business expenses as a deduction from the total business gross income to arrive at the net self-employment income.
See Self-Employment Income - MA and GAMC for information on what business expenses may be deducted.
l Other earned income.
Exception: If the client meets all of the following conditions, a Special Personal Allowance deduction from gross earned income is allowed:
m Certified disabled by the Social Security Administration (SSA) or the State Medical Review Team (SMRT).
m Employed under an Individual Plan of Rehabilitation.
m Lives in a long term care facility (LTCF).
An Individual Plan of Rehabilitation is developed with a social worker or an employment counselor. An example of such a plan is a sheltered workshop.
Allow the Special Personal Allowance for the specific gross earned income covered under the plan. Do not reduce the earned income to less than $0 The Special Personal Allowance includes the following deductions which must be deducted in the order listed:
m The first $80 of the earned income. This is intended to cover meals and other miscellaneous expenses.
m Actual FICA withheld.
m Actual transportation costs.
m Actual employment expenses, such as tools or uniforms.
m State and Federal taxes, but only when the person is not exempt from withholding.
Count gross unearned income in the month it is received.
Note: Some unearned income which is excluded for other MA income calculations is counted in the LTC income calculation.
l Count types of unearned income including but not limited to:
n Spousal Maintenance or Alimony.
n Annuity payments.
n Retired, Survivors and Disability Income (RSDI) payments.
n Supplemental Security Income (SSI) payments.
n Railroad Retirement Benefits.
n Minnesota Supplemental Aid (MSA) cash grants.
n Gifts and other infrequent income.
n Interest and dividends received by or available to the client.
Exception: Do not count interest earned on a liquid asset if it remains with the asset.
n The interest portion of a contract for deed payment.
n Cost of Living Adjustment (COLA) increases.
Note: Do not wait to count the increased amount until July as you would for MA Method B community income calculations. See RSDI Cost of Living Adjustment Disregard for further details.
n Retirement Fund or Pension payments.
n Lump Sum Income.
Count all gross lump sum income for the month of receipt.
Exception: When a veteran receives an initial Veteran's Improved Pension benefit it may include retroactive months. Recalculate the income for each month covered by the lump sum, adjusting the LTC Needs Allowance accordingly.
Note: Adjustments to the LTC income calculation must be made retroactively if the lump sum could not be anticipated.
Allow the following deductions from some lump sum income when appropriate:
m Costs associated with getting the lump sum, such as attorney's fees.
m Any portion of the lump sum earmarked for and used to pay medical expenses not covered by insurance or any Minnesota health care program.
m Any portion of the lump sum recovered by Benefit Recovery Section (BRS).
m Any portion of the lump sum earmarked for and used to pay funeral and burial costs.
n LTC Insurance Payments if the insurance is not considered third-party liability.
Note: Policies determined to be third-party liability by the DHS Benefit Recovery Section are considered to be insurance.
n Tribal Land Settlement and Trust payments.
l Exclude the following unearned income from the gross unearned income total:
n Group Residential Housing (GRH) cash grants.
n Interest earned on a burial account if it is used for the burial fund exclusion.
n Income tax refunds.
n Property tax refunds for homeowners or renters.
n Earned Income Credit.
Some clients have taxes withheld from income, such as pension funds, etc.
l State and Federal taxes are not allowable deductions for monthly LTC budgeting because a client may not have a tax obligation at the end of a year due to high medical expenses.
l If the client does have a tax obligation for the current tax year, allow the expense in the month the client pays it as long as it is paid in the current tax year.
Note: Allow payments made until April 15th.
l Do not allow the expense of tax preparation as a deduction from income.
l Do not allow the deduction of tax obligations for earlier years.
Count a sponsor’s gross income as unearned income in the client’s LTC income calculation.
Exception: If the sponsor is the community spouse, do not count the income in the LTC income calculation. For more information on when to consider a community spouse’s:
m Assets. See Asset Assessments.
m Income. See Community Spouse Allocation.
Verify the income for the following situations following the policy provided:
l Application and Renewal.
Verify all earned and unearned income used in a client’s LTC income calculation, or used to determine an allocation amount.
l Monthly.
Verify varying income. A client who has earned income of more than $80 per month must report and verify the income monthly using the Household Report Form (DHS-2120).