G-4100, Income Exclusions

Revision 09-4; Effective December 1, 2009

After granting the applicable exemptions, apply appropriate exclusions to the remaining income of the person, including any income that is deemed as unearned income. See Section G-2000, Income Treatment, for exempt, variable and deemed income treatment.

An exclusion is not an exemption. An exclusion is applied to a type of income that would otherwise be counted in the eligibility determination. Income that is excluded in the eligibility test generally is considered when determining the amount that the person must pay for his care in a medical facility (see Chapter H, Co-Payment Budget.

G-4110 Twenty-Dollar General Exclusion

Revision 11-3; Effective September 1, 2011

For each month, the first $20 of unearned or earned income is excluded. This exclusion is applied first to unearned income, then to earned income if the unearned income is less than $20.

If no unearned income exists, the entire $20-exclusion is applied to the earned income.

See Section E-3000, Earned and Unearned Income.

Exceptions are as follows:

  • Although this exclusion does not apply to VA pensions and parents' dependency and indemnity compensation (DIC), it does apply to VA compensation and insurance. If, however, a person receives income from a VA pension and another source, he retains the general exclusion.
  • In the case of an eligible couple, only one $20-general exclusion is applied to the couple's combined income.
  • The $20-general exclusion does not apply when determining eligibility for Community Attendant Services.
  • The $20-general exclusion does not apply when determining eligibility for Medicaid Buy-In for Children (MBIC). See Section N-6320, MBIC Income Exclusion.

Example: The person receives $15 a month as a contribution from a relative. He also has $80 a month as gross earned income. The entire amount of the contribution is excluded because it is less than $20. The remaining $5 is then subtracted from the $80 gross earned income.

See Section E-4315, VA Aid and Attendance and Housebound Payments. Do not consider these payments in the eligibility budget.

G-4120 Earned Income Exclusion

Revision 18-4; Effective December 1, 2018

After applying the $20 general exclusion, exclude $65 of the remaining earned income plus one-half of the remaining earnings. In the case of an eligible couple, allow only one earned income exclusion for the couple's combined earned income.

Exceptions:

  • The earned income exclusion does not apply when determining eligibility for Community Attendant Services.
  • The earned income exclusion does not apply when determining eligibility for the Medicaid Buy-In for Children (MBIC) program.

Note: Do not apply the earned income exclusion when eligibility is determined using the special income limit.

Related Policy

MBIC Income Exclusion, N-6320
Institutional Eligibility Budget Steps, G-6300

G-4121 Examples of the Earned Income Exclusion

Revision 09-4; Effective December 1, 2009

  • Bob Evans' monthly income is $350 in wages and $100 in pension payments.
     

    DescriptionAmount
    Unearned income$100.00
    General income exclusion– $20.00
    Remaining unearned income$80.00
    Earned income exclusion: 
    Gross earned income$350.00
    First $65.00– $65.00
    Remaining$285.00
    One-half of remaining$142.50
    Countable unearned income$80.00
    Countable earned income+ $142.50
    Total countable income$222.50
  • Ralph and Mary Teague are both receiving disability Social Security and SSI benefits. They were in an automobile accident in June, the month before they applied for SSI. Mr. and Mrs. Teague have applied for retroactive Medicaid to help with the payment of their hospital bills in June. In the month under consideration, Ralph received wages from the Senior Citizens' Center for preparing meals. Mary did part-time piecework sewing by hand at home for a local clothing manufacturer. She had no work-related expenses because the company supplied the materials.
     

    DescriptionAmount
    Unearned income 
    Ralph's Social Security benefits$200.00
    Mary's Social Security benefits+ $100.00
    Gross unearned benefits for the couple$300.00
    General income exclusion (only one allowed) – $20.00
    Remaining unearned income$280.00
    Earned income: 
    Ralph's wages$306.40
    Mary's wages+ $109.90
    Total gross earned income$416.30
    Earned income exclusion (only one allowed): 
    First $65.00$65.00
    Remaining$351.30
    One-half of remaining$175.65
    Countable unearned income$280.00
    Countable earned income+ $175.65
    Total countable income for the couple$455.65