E-8100, General Information

Revision 11-3; Effective September 1, 2011

In-kind S/M is unearned income in the form of food or shelter or both. Federal requirements stipulate that S/M, along with other forms of unearned income, be considered when determining Medicaid eligibility.

Do not consider S/M in budgeting for Medicaid Buy-In for Children (MBIC).

Two rules are used to determine the value of S/M a person receives:

• the one-third reduction rule; and
• the one-third reduction + $20 rule.

See Appendix XXXI, Budget Reference Chart.

Base the decision on which rule to use on:

• the person’s living arrangement; and
• whether a person receives:
  • both food and shelter; or
  • either food or shelter.

E-8110 One-Third Reduction Rule

Revision 09-4; Effective December 1, 2009

Reference: Appendix XIV, Chart A

Instead of determining the actual dollar value of in-kind S/M as unearned income, use the one-third reduction rule; that is, count one-third of the federal benefit rate (FBR) as additional income if a person (or a person and the person's eligible spouse):

• live in another person's household for a full calendar month, except for temporary absences; and
• receive both food and shelter from the other person's household.

Example: Bess Black lives in her son's home. There are no other household members. Monthly household expenses total $650 ($325 pro-rata share). Mrs. Black contributes nothing toward household expenses. Count one-third of the FBR as S/M.

The one-third reduction rule applies in full or not at all. If a person lives in another person's household, and the one-third reduction rule applies, do not apply any income exclusions to the reduction amount. However, do apply appropriate exclusions to any other earned or unearned income received.

If the one-third reduction rule applies, do not count any other in-kind S/M received.

E-8120 One-Third Reduction + $20 Rule

Revision 13-4; Effective December 1, 2013

If a person receives in-kind S/M and the one-third reduction rule is not applicable, use the one-third reduction + $20 rule. Instead of determining the actual dollar value of any food or shelter a person receives, presume that it is worth a maximum value. This presumed maximum value is one-third of the federal benefit rate (FBR), plus the amount of the general income exclusion ($20).

The one-third reduction + $20 rule allows a person to show that the S/M is not equal to the presumed maximum value. Do not use the one-third reduction + $20 rule if the person shows that:

• the current market value of any food or shelter the person receives, minus any payment the person makes for them, is lower than the presumed maximum value; or
• the actual amount someone else pays for the person’s food or shelter is lower than the presumed maximum value.

Use the one-third reduction + $20 rule as part of the unearned income if either:

• the person chooses not to question the use of the presumed maximum value, or
• the presumed maximum value is less than the actual value of the food or shelter the person receives.

Use the actual value of the food or shelter received as part of the unearned income if the person shows that the presumed maximum value is higher than the actual value of the food or shelter the person receives.

Note: A religious order has an express obligation to provide full support and maintenance for members of the order who have taken a vow of poverty. Due to this express obligation, in-kind support and maintenance subject to the one-third FBR + $20 must be developed. Income turned over by a member to the religious order is considered to be in fulfillment of the vow of poverty and is not considered a contribution toward the food and shelter received from the order.

E-8121 Community Attendant Services

Revision 09-4; Effective December 1, 2009

Reminder: If a person receives S/M and the one-third reduction + $20 rule applies, count the presumed maximum amount, that is, 1/3 federal benefit rate (FBR) + $20. If the person is income-eligible, no further development is required. If counting 1/3 FBR + $20 results in ineligibility, prior to denial the person must be offered an opportunity to rebut and show that the actual value of the S/M is less.

If a person is applying for or receiving Community Attendant Services (CAS), count 1/3 FBR + $20 as S/M. If the person is income-eligible, no further development is required. If counting 1/3 FBR + $20 results in ineligibility, prior to denial the person must be given an opportunity to rebut and show that the actual value is less.

Example: Jim Morgan, a CAS applicant, lives in his sister's home. The sister's husband and their child also live there. Mr. Morgan does not pay his pro-rata share of household expenses. Count 1/3 FBR + $20 as S/M. If Mr. Morgan is income-eligible, no further development is needed. If counting 1/3 FBR + $20 results in ineligibility, prior to denial Mr. Morgan must be given an opportunity to rebut and show that the actual value is less. Monthly household expenses total $1,050 ($262.50 pro-rata share). Mr. Morgan contributes $200 per month toward general household expenses. The actual value is $62.50 ($262.50 pro-rata share − $200 client's contribution = $62.50).

Note: No S/M for Home and Community-Based Services waivers.

E-8130 Support and Maintenance (S/M) Items

Revision 09-4; Effective December 1, 2009

E-8140 Exceptions to Counting Support and Maintenance (S/M) Income

Revision 18-1; Effective March 1, 2018

The general rule is to count S/M to a person when he or she receives food or shelter, regardless of who is liable for payment of the cost of the food or shelter item received.

There are numerous exceptions to the general rule. When an exception applies, the food or shelter a person receives is not countable S/M. Some of these exceptions result from federal statutory exclusions that specifically exclude from income the value of food or shelter received. Other exceptions result from situations in which the food or shelter received does not constitute income in accordance with regulations.

Do not count S/M if a person receives food or shelter that:

• is specifically excluded by federal law (for example, the Disaster Relief and Emergency Assistance Act) (see Section E-2000, Exempt Income);
• meets the criteria for exclusion of infrequent or irregular unearned income (see Section E-9000, Infrequent or Irregular Income);
• has no current market value;
• is provided under a governmental (federal, state or local) medical or social service program (see Section E-1700, Things That Are Not Income);
• is assistance based on need from a state or one of its political subdivisions (see Section E-2000, Exempt Income);
• is provided by someone living in the same household whose income is subject to deeming to the person;
• is food or shelter received at school by a child under age 22, not subject to deeming, who receives food or shelter only at school while temporarily absent from his parental household;
• is food or shelter received during a temporary absence;
• is received as a replacement of a lost, damaged or stolen resource (this includes temporary housing) (see Section E-1740, Miscellaneous Things That May Not Be Income, and Section E-2000, Exempt Income);
• is excluded under an approved plan for self-support;
• is received because of payments made under the terms of a credit life or credit disability policy (see Section E-1740); or
• is received during medical confinement in an institution.

Support and maintenance are not included as income in the eligibility budget if the person:

• is in an institutional setting and eligibility is being tested for a Home and Community-Based Services waiver program (Note: Community Attendant Services is not a Home and Community-Based Services waiver program); or
• is in an institutional setting for the month, but entered after the first of the month.

Example: Mr. John Bono lives in his own home. His daughter reports that she pays Mr. Bono's garbage removal bill directly to the vendor each calendar quarter, which amounts to no more than $20. Because S/M meets the definition of infrequent or irregular income, it is not counted in the eligibility budget.

Support and maintenance are also not included as income in the eligibility budget if the person:

• lives with a deemor (ineligible spouse/parent) and there are no non-deemors in the household;
• lives in a commercial room-and-board establishment;
• is placed in personal care, adult foster care or supervised living by a public agency, such as Adult Protective Services (APS) or HHSC; or
• pays his pro-rata share of all household expenses.

Example: Alice Beckman lives with her son in his home. Monthly household food and shelter expenses total $350 ($175 pro-rata share). Ms. Beckman contributes $185 per month toward general household expenses. Because Ms. Beckman pays more than her pro-rata share of general household expenses, there is no S/M.

Support and maintenance are also not included as income in the eligibility budget if the person:

• lives in a public assistance household, defined as one in which each member receives cash or vendor payments from one of the following:
  • Temporary Assistance for Needy Families (TANF);
  • SSI;
  • Refugee Assistance Act of 1980;
  • a Bureau of Indian Affairs (BIA) general assistance program;
  • payments based on need provided by a state/local government income maintenance program;
  • Veterans Affairs (VA) pension for veterans or widows;
  • VA dependency and indemnity compensation (DIC) for parents; or
  • payments under the Disaster Relief Act of 1974; or
• is receiving free use of land on which the shelter the person owns is located, or free use of shelter situated on land the person owns.

Example: Marcie Bennett lives in her own mobile home on property owned by her daughter. The daughter charges her no rent for use of the land. Ms. Bennett pays all of her food and utility expenses. There is no S/M because the use of land alone is not a shelter cost.

Example: Janet Smith lives in a mobile home owned by her daughter. The mobile home is situated on a lot owned by Ms. Smith. The daughter does not charge Ms. Smith rent for use of the mobile home. There is no S/M because the use of shelter alone (but not the land) is not a shelter cost.

E-8150 Food, Clothing or Shelter as Wages

Revision 09-4; Effective December 1, 2009

If a person receives food, clothing or shelter that constitutes wages or remuneration for work, this is earned income valued at its current market value (CMV) or current market rental value (CMRV).

In this situation, the principles of S/M do not apply; however, the earned income exclusions of $65 and one-half the remainder do apply, unless eligibility is being determined under the institutional income limit.

Example: Joe Ball works as an apartment manager. His employer pays him $300 per month in cash wages and provides a free room, which has a monthly rental value of $200. Because provision of the room by Mr. Ball's employer constitutes wages, Mr. Ball receives $500 in earned income each month. This in-kind earned income in the form of shelter is valued at its CMRV ($200), and the one-third reduction rule and the one-third reduction + $20 rule do not apply. The earned income exclusions of $65 and one-half the remainder apply to Mr. Ball's total earnings of $500 ($300 cash wages + $200 free room), unless eligibility is being determined under the institutional income limit.

E-8160 Living Arrangement

Revision 09-4; Effective December 1, 2009

Use a person’s living arrangement to determine if S/M is being received and whether the S/M is to be valued under the one-third reduction rule or under the one-third reduction + $20 rule. Some common living arrangements are:

• noninstitutional care;
• home ownership;
• rental liability, including flat fee for room and board;
• public assistance (PA) households (that is, presumed sharing);
• separate consumption;
• separate purchase of food;
• sharing;
• earmarked sharing; and
• home of another.