2400, Income

Revision 20-0; Effective November 2019

2410 General Principles

Revision 20-0; Effective November 2019

A household must pursue and accept all income to which the household is legally entitled, unless it is unreasonable to pursue the income. Reasonable time (at least three months) must be allowed for the household to pursue the income, which is not considered accessible during this time.

  • The income of all CIHCP household members is considered.
  • Income is either countable or exempt.
  • If attempts to verify income are unsuccessful because the payer fails or refuses to provide information and other proof is not available, the household’s statement is used as best available information.
  • Income of disqualified and non-household members is excluded but may be included if processing an application for a sponsored alien.

2420 Definitions

Revision 20-0; Effective November 2019

Alien Sponsor – A person who signed an affidavit of support (namely, INS Form I-864 or I-864-A) on or after Dec. 19, 1997, agreeing to support an alien as a condition of the alien’s entry into the United States.

Budgeting – The method used to determine eligibility by calculating income and deductions using the best estimate of the household’s current and future circumstances and income.

Earned Income – Income a person receives for a certain degree of activity or work. Earned income is related to employment and, therefore, entitles the person to work-related deductions not allowed for unearned income.

Gross Income – Income before deductions.

Income – Any type of payment that is of gain or benefit to a household.

Net Income – Gross income minus allowable deductions.

Real Property – Land and any improvements on it.

Sponsored Alien – A person who has been lawfully admitted to the United States for permanent residence under the Immigration and Nationality Act (8 U.S.C. Section 1101 et seq.) and who, as a condition of admission, was sponsored by a person who executed an affidavit of support on behalf of the person.

Tip Income – Income earned in addition to wages that is paid by patrons to people employed in service-related occupations, such as beauticians, waiters, valets, pizza delivery staff, etc.

Unearned Income – Payments received without performing work-related activities.

2430 Countable Income and Exemptions

Revision 20-0; Effective November 2019

Adoption Payments Adoption Payments– Exempt.

Alien Sponsor’s Income – If an entity chooses to include the income of a person who executed an affidavit of support on behalf of a sponsored alien and the income of the person’s spouse, the entity shall adopt written procedures for processing the income of the sponsor and the sponsor’s spouse.

Cash Gifts and Contributions – Count as unearned income unless they are made by a private, nonprofit organization on the basis of need and total $300 or less per household in a federal fiscal quarter. The federal fiscal quarters are January - March, April - June, July - September and October-December. If these contributions exceed $300 in a quarter, count the excess amount as income in the month received.

Exempt any cash contribution for common household expenses, such as food, rent, utilities, and items for home maintenance, if it is received from a non-certified household member who:

  • Lives in the home with the certified household member;
  • Shares household expenses with the certified household member; and
  • No landlord/tenant relationship exists.

If a noncertified household member makes additional payments for use by a certified member, it is a contribution.

Child’s Earned Income – Exempt a child’s earned income if the child, who is under age 18 and not an emancipated minor, is a full-time student (including a home-schooled child) or a part-time student employed less than 30 hours a week.

Child Support Payments – Count as unearned income after deducting up to $75 from the total monthly child support payments the household receives. Count payments as child support if a court ordered the support or the child’s caretaker or the person making the payment states the purpose of the payment is to support the child. Count ongoing child support income as income to the child even if someone else living in the home receives it. Count child support arrears as income to the caretaker. Exempt child support payments as income if the child support is intended for a child who receives Medicaid, even though the parent actually receives the child support.

  • Child Support Received for a Nonmember – If a caretaker receives ongoing child support for a nonmember (or a member who is no longer in the home) but uses the money for personal or household needs, count it as unearned income. Do not count the amount actually used for or provided to the nonmember for whom it is intended to cover.
  • Lump-Sum Child Support Payments – Count lump-sum child support payments (on child support arrears or on current child support) received, or anticipated to be received more often than once a year, as unearned income in the month received. Consider lump-sum child support payments received once a year or less frequently as a resource in the month received.
  • Returning Parent – If an absent parent is making child support payments but moves back into the home of the caretaker and child, process the household change.

Crime Victim’s Compensation Payments – Exempt. These are payments from the funds authorized by state legislation to assist a person who has been a victim of a violent crime, was the spouse, parent, sibling or adult child of a victim who died as a result of a violent crime, or is the guardian of a victim of a violent crime. The payments are distributed by the Office of the Attorney General in monthly payments or in a lump sum.

Disability Insurance Payments – Count disability payments as unearned income, including Social Security Disability Insurance (SSDI) payments and disability insurance payments issued for non-medical expenses. Exception: Exempt Supplemental Security Income (SSI) payments.

Dividends and Royalties – Count dividends as unearned income. Exception: Exempt dividends from insurance policies as income. Count royalties as unearned income, minus any amount deducted for production expenses and severance taxes.

Educational Assistance – Exempt educational assistance, including educational loans, regardless of source.  Educational assistance also includes college work study.

Energy Assistance – Exempt the following types of energy assistance payments:

  • Assistance from federally funded, state or locally administered programs, including HEAP, weatherization, Energy Crisis, and one-time emergency repairs of a heating or cooling device (down payment and final payment);
  • Energy assistance received through Housing and Urban Development (HUD), United States Department of Agriculture’s Rural Housing Service (RHS) or Farmer’s Home Administration (FmHA); and
  • Assistance from private, nonprofit or governmental agencies based on need.

If an energy assistance payment is combined with other payments of assistance, exempt only the energy assistance portion from income (if applicable).

Foster Care Payments – Exempt.

Government Disaster Payments – Exempt federal disaster payments and comparable disaster assistance provided by states, local governments and disaster assistance organizations if the household is subject to legal penalties when the funds are not used as intended. Examples: Payments by the Individual and Family Grant Program, Small Business Administration and/or Federal Emergency Management Agency (FEMA).

In-Kind Income – Exempt. An in-kind contribution is any gain or benefit to a person that is not in the form of money or check, payable directly to the household, such as clothing, public housing or food.

Interest – Count as unearned income.

Job Training – Exempt all payments made under the Workforce Investment Act (WIA). Exempt portions of non-WIA job training payments earmarked as reimbursements for training-related expenses. Count any excess as earned income. Exempt on-the-job training (OJT) payments received by a child who is under age 19 and under parental control of another household member.

Loans (Non-educational) – Count as unearned income unless there is an understanding that the money will be repaid and the person can reasonably explain how he will repay it.

Lump-Sum Payments – Count as income in the month received if the person receives it or expects to receive it more often than once a year. Consider retroactive or restored payments to be lump-sum payments and count as a resource. Separate any portion that is ongoing income from a lump-sum amount and count it as income. Exempt lump sums received once a year or less, unless specifically listed as income. Count them as a resource in the month received. Effective Jan. 1, 2013, exempt federal tax refunds permanently as income and resources for 12 months after receipt. Exempt the Earned Income Credit (EIC) for a period of 12 months after receipt through Dec. 31, 2018. If a lump sum reimburses a household for burial, legal or health care bills, or damaged/lost possessions, reduce the countable amount of the lump sum by the amount earmarked for these items.

Military Pay – Count military pay and allowances for housing, food, base pay and flight pay as earned income, minus pay withheld to fund education under the G.I. Bill.

Mineral Rights – Count payments for mineral rights as unearned income.

Pensions – Count as unearned income. A pension is any benefit derived from former employment, such as retirement benefits or disability pensions.

Reimbursement – Exempt a reimbursement (not to exceed the individual's expense) provided specifically for a past or future expense. If the reimbursement exceeds the individual's expenses, count any excess as unearned income. Do not consider a reimbursement to exceed the individual's expenses unless the individual or provider indicates the amount is excessive. Exempt a reimbursement for future expenses only if the household plans to use it as intended.

Retirement, Survivors and Disability Insurance (RSDI) Payments – Count as unearned income the benefit amount including the deduction for the Medicare premium, minus any amount that is being recouped for a prior RSDI overpayment. If a person receives an RSDI check and a Supplemental Security Income (SSI) check, exempt both checks since the person is a disqualified household member. If an adult receives a Social Security survivor's benefit check for a child, this check is considered the child's income.

Self-Employment Income – Count as earned income, minus the allowable costs of producing the self- employment income. Self-employment income is earned or unearned income available from one’s own business, trade or profession rather than from an employer. However, some individuals may have an employer and receive a regular salary. If an employer does not withhold Federal Insurance Contributions Act (FICA) or income taxes, even if required to do so by law, the person is considered self-employed.

Types of self-employment include:

  • Odd jobs, such as mowing lawns, babysitting and cleaning houses;
  • Owning a private business, such as a beauty salon or auto mechanic shop;
  • Farm income; and
  • Income from property, which may be from renting, leasing or selling property on an installment plan. Property includes equipment, vehicles and real property.

If the person sells the property on an installment plan, count the payments as income. Exempt the balance of the note as an inaccessible resource.

Supplemental Security Income (SSI) Payments – Exempt. A person receiving any amount of SSI benefits also receives Medicaid and is, therefore, a disqualified household member.

Temporary Assistance for Needy Families (TANF) Benefits – Exempt.

Terminated Income – Count terminated income in the month received. Use actual income and do not use conversion factors if terminated income is less than a full month’s income. Income is terminated if it will not be received in the next usual payment cycle.

Income is not terminated if:

  • Someone changes jobs while working for the same employer;
  • An employee of a temporary agency is temporarily not assigned;
  • A self-employed person changes contracts or has different customers without having a break in normal income cycle; or
  • Someone received regular contributions, but the contributions are from different sources.

Third-Party Payments – Exempt the money received that is intended and used for the maintenance of a person who is not a member of the household. If a single payment is received for more than one beneficiary, exclude the amount actually used for the nonmember up to the nonmember's identifiable portion or prorated portion, if the portion is not identifiable.

Tip Income – Count the actual (not taxable) gross amount of tips as earned income. Add tip income to wages before applying conversion factors. Tip income is income earned in addition to wages paid by patrons to people employed in service-related occupations, such as beauticians, waiters, valets, pizza delivery staff, etc. Do not consider tips as self-employment income unless related to a self-employment enterprise.

Trust Fund – Count as unearned income trust fund withdrawals or dividends that the household can receive from a trust fund that is exempt from resources.

Unemployment Compensation Payments – Count as unearned income the gross benefit less any amount being recouped for an Unemployment Insurance Benefits (UIB) overpayment. Count the cash value of UIB in a UIB debit account, less amounts deposited in the current month, as a resource. Account inquiry is accessible to a UIB recipient online at www.chase.com or at any Chase Bank automated teller machine free of charge. Exception: Count the gross amount if the household agreed to repay a food stamp overpayment through voluntary garnishment.

Veterans Affairs (VA) Payments – Count the gross VA payment as unearned income, minus any amount being recouped for a VA overpayment. Exempt VA special needs payments, such as annual clothing allowances or monthly payments for an attendant for disabled veterans.

Vacation Pay – If an individual receives vacation pay:

  • During or before termination of employment, consider it earned income.
  • After termination of employment in one lump sum, consider it a liquid resource in the month received.
  • After termination of employment in multiple checks, consider it unearned income.

Vendor Payments – Exempt vendor payments if made by a person or organization outside the household directly to the household's creditor or person providing the service. Exception: Count as income money that is legally obligated to the household, but which the payer makes to a third party for a household expense.

Wages, Salaries, Commissions – Count the actual (not taxable) gross amount as earned income. If a person asks his employer to hold his wages or the person’s wages are garnished, count this money as income in the month the person would otherwise have been paid. If, however, an employer holds his employee’s wages as a general practice, count this money as income in the month it is paid. Count an advance in the month the person receives it.

Workers’ Compensation Payments – Count the gross payment as unearned income, minus any amount being recouped for a prior worker’s compensation overpayment or paid for attorney’s fees. Note: The Texas Workforce Commission (TWC) or a court sets the amount of the attorney’s fee to be paid. Do not allow a deduction from the gross benefit for court-ordered child support payments. Exception: Exclude workers’ compensation benefits paid to the household for out-of-pocket health care expenses. Consider these payments as reimbursements.

Other Types of Benefits and Payments – Exempt benefits and payments from the following programs:

  • AmeriCorps;
  • Child Nutrition Act of 1966;
  • Food Stamp Program or Supplemental Nutrition Assistance Program (SNAP);
  • Foster Grandparents;
  • Funds distributed or held in trust by the Indian Claims Commission for Indian tribe members under Public Laws 92-254 or 93-135;
  • Learn and Serve;
  • National School Lunch Act;
  • National Senior Service Corps (Senior Corps);
  • Nutrition Program for the Elderly (Title III, Older American Act of 1965);
  • Retired and Senior Volunteer Program (RSVP);
  • Senior Companion Program;
  • Tax-exempt portions of payments made under the Alaska Native Claims Settlement Act;
  • Uniform Relocation Assistance and Real Property Acquisitions Act (Title II);
  • Volunteers in Service to America (VISTA); and
  • Women, Infants and Children (WIC) Program.

2440 Verifying Income

Revision 20-0; Effective November 2019

Verify countable income, including recently terminated income, at initial application and when changes are reported. Proof may include, but is not limited to:

  • Pay stubs;
  • Statements from employers;
  • W-2 forms;
  • Notes for cash contributions;
  • Business records;
  • Award letters;
  • Court orders or public decrees (support documents);
  • Sales records;
  • Income tax returns; and
  • Statements completed, signed and dated by the self-employed person.

2450 Documenting Income

Revision 20-0; Effective November 2019

On Form 3065, Worksheet, document exempt income and the reason it is exempt, and unearned income, including the following items:

  • Date income is verified;
  • Type of income;
  • Check or document seen;
  • Amount recorded on check or document;
  • Frequency of receipt; and
  • Calculations used.

For self-employment income, include the following items:

  • The allowable costs for producing the self-employment income; and
  • Other factors used to determine the income amount;

For earned income, include the following items:

  • Payer’s name and address;
  • Dates of each wage statement or pay stub used;
  • Date paycheck is received;
  • Gross income amount;
  • Frequency of receipt;
  • Calculations used; and
  • Allowable deductions.