A-1310, General Policy

Revision 21-2; Effective April 1, 2021

All Programs

Income is any type of payment that is of gain or benefit to a household and is either counted or exempted from the budgeting process. Earned income is related to employment. Except for MAGI medical programs, earned income entitles a household to deductions not allowed for unearned income. Unearned income is income received without performing work-related activities and includes benefits from other programs. Factors specific to the source of income and the distance it travels through the mail (weekends and holidays) may be used to determine the date income can reasonably be anticipated.


Retirement, Survivors, and Disability Income (RSDI), Supplemental Security Income (SSI), Veterans Affairs (VA) benefits, or other such funds legally obligated to a beneficiary are not counted if a payee who is not a member of the household:

  • receives the funds; and
  • does not make the money available to the beneficiary.

In the beneficiary’s Eligibility Determination Group (EDG), the total amount of the legally obligated funds the payee makes available to the beneficiary in cash, by way of vendor payment or through items purchased for the beneficiary using the beneficiary's money (includes payments made by the payee to a third party on behalf of the beneficiary) is counted as unearned income. Any portion of the funds the payee keeps for the payee's own use is counted as unearned income in the payee's EDG.


The income of the following people must be considered for Temporary Assistance for Needy Families (TANF):

  • any person in the certified or budget group, or EDG member, including disqualified members;
  • any person living in the home who is not included in the certified or budget group but who is legally responsible for a member of the certified group; and
  • an alien's sponsor.

For TANF, if the income is not made available to the beneficiary, the person must follow the requirements for pursuing legally obligated income.


The income of the following people must be considered for the Supplemental Nutrition Assistance Program (SNAP):

  • any member of the SNAP household, including disqualified members; and
  • an alien's sponsor.

Medical Programs

Modified Adjusted Gross Income (MAGI) rules are based on Internal Revenue Service (IRS) rules for counting income and are used to determine financial eligibility for medical programs and federal insurance affordability programs.

To determine financial eligibility, the following items must be identified for each person within the MAGI household composition:

  • earned income, excluding any pre-tax contributions;
  • unearned income;
  • self-employment income;
  • American Indian (AI)/Alaska Native (AN) disbursements;
  • overpayments; and
  • expenses.

The income of the following people must be considered for medical programs:

  • any person who is included in the person’s MAGI household composition; and
  • an alien's sponsor (if applicable).

Note: Household composition for medical programs is determined for each applicant or recipient. The income of certain people may be exempt from an applicant’s or recipient’s MAGI household income as explained in A-1341, Income Limits and Eligibility Tests, Medical Programs, Step 3.

TP 40

If a pregnant woman is determined to be eligible, the EDG must not be denied if the pregnant woman’s MAGI household composition income increases above the income limit. The budget should be adjusted to reflect the new income.

TP 45

Income is not an eligibility factor for TP 45.

Related Policy

Requirement to Pursue Income, A-1311 
Income Limits and Eligibility Tests, A-1341 
Alien Sponsor’s Income, A-1361 
Eligibility Criteria, B-471 
Special Provisions for Households with Elderly Members or Members with a Disability, B-433 
Categorically Eligible Households, B-470


A—1311 Requirement to Pursue Income

Revision 22-1; Effective January 1, 2022

TANF and Medical Programs

Applicants and recipients are required to pursue and accept all legally entitled income. Inform applicants and recipients of this requirement and develop a plan to pursue the potential income. Allow reasonable time (at least three months) to pursue the income and do not consider the income available during this time. Inform recipients of their obligation to pursue potential income and include the allowable time to pursue the income in the comments section of Form TF0001, Notice of Case Action.

Exception: The recipient does not have to pursue income if it would be unreasonable. Consider a situation unreasonable if:

  • the cost to pursue the income exceeds the potential income or causes financial hardship; 
  • pursuing the income would endanger the recipient’s health or safety; or
  • legal action is required, but a private attorney or legal services refuses to accept the case. The recipient must make a reasonable effort to obtain legal assistance.

TANF and TP 08

Document the plan and the time allowed to pursue income. If the household refuses or fails to follow the agreed plan without good cause, deny the EDG. 

Set a special review if the anticipated change in income will occur before the next periodic redetermination. 

Related Policy  

Documentation Requirements, A-1380


A—1311.1 Requirement to Pursue SSI or RSDI

Revision 23-2; Effective April 1, 2023


Staff must provide and explain Form H1859, Social Security Administration Benefits for People with Disabilities Receiving TANF, to households claiming a disability or caring for a child with disabilities. Staff must also document that Form H1859 was provided and explained to the  recipient.

Staff are not required to set a special review when referring recipients for Social Security benefits. At the next periodic redetermination, the household must provide verification that the recipient with disabilities applied for SSI or RSDI benefits.

In the comments section of Form TF0001, Notice of Case Action, staff must inform recipients of their obligation to pursue potential income and include the time allowed for pursuing income. Staff must include the following appropriate statement for households claiming a disability or caring for a child with disabilities: 

  • English – "You must apply for assistance with the Social Security 
    Administration and provide proof of the application at your next TANF interview."
  • Spanish – "Tiene que solicitar asistencia de la Administración del Seguro 
    Social y presentar prueba de la solicitud en su próxima entrevista de TANF."

Deny the EDG if the household fails to apply for SSI or RSDI, without good cause. If the household chooses to no longer claim the Choices exemption, staff should update the exemption code and document the decision. The recipient may not claim the Choices exemption if the person reapplies within 12 months from the denial date. If the person claims the exemption before the 12 months, pend the EDG and give the person the opportunity to provide verification that they applied for SSI or RSDI benefits.


A—1311.1.1 SSI/RSDI Application Assistance

Revision 15-4; Effective October 1, 2015


State office has an automated process that identifies TANF recipients with a Choices exemption for caring for a child with disabilities and unable to work due to mental or physical disability and sends referrals to the contractor who administers the Social Security Outreach Application Program (SSOAP). SSOAP outreaches the TANF household, provides information, and answers questions about the Social Security Administration (SSA) process.

If an individual states that the household applied for SSI/RSDI, but does not have verification available, the advisor should refer to the Wire Third-Party Query (WTPY)/State Online Query (SOLQ) system. If the WTPY/SOLQ system does not show that the individual applied for benefits, the advisor should request that the individual provide verification.

The EDG should not be denied if:

  • the individual is physically or mentally unable to complete the SSI/RSDI application process; and
  • SSOAP and SSA fail or are unable to provide assistance needed to complete the SSI/RSDI application process.


A—1311.1.2 Social Security Administration (SSA) Definitions and Guidelines

Revision 15-4; Effective October 1, 2015

TANF and Medical Programs

The SSA administers two programs that provide benefits based on disability:

  • RSDI provides disability benefits to individuals, and to their dependents with disabilities under certain conditions.
  • SSI provides benefits to individuals with disabilities (including children under age 18) who have limited income and resources.

The Social Security Act and SSA's regulations provide a definition of disability:

  • For all individuals applying for RSDI and adults applying for SSI, the definition of disability is the same. The law defines disability as the inability to engage in substantial gainful activity because of physical or mental impairment(s) which may result in death, or which has lasted or is expected to last for a continuous period of not less than 12 months.
  • For children under age 18 applying for SSI, the law defines disability as a physical or mental impairment(s) which results in marked and severe functional limitations, and which may result in death, or which has lasted or is expected to last for a continuous period of not less than 12 months.

Advisors should refer the individual to SSI if one of the following conditions is met:

  • Psychological/psychiatric problems:
    • Actual clinical diagnosis or medical documentation that indicates the individual is unable to work,
    • Odd and/or inappropriate behavior, or
    • Inability of a long-time TANF individual to get or keep a job for more than 30 days because of a mental impairment.
  • Obesity combined with any other physical problems such as arthritis, high blood pressure, heart failure, respiratory disease, or vascular disease.
  • Low intelligence:
    • Former special education student,
    • Inability to read or write even though person has been to school,
    • Basis test scores below 200,
    • Failure to comprehend even the simplest directions, or
    • Down's syndrome.
  • Serious substance abuse when combined with other related health problems.
  • Serious health problems:
    • Multiple sclerosis, cancer, stroke, multiple surgeries for the same problem, multiple trauma and other situations;
    • Chronic health problems; or
    • Newborns with low birth weight (1200 grams or less within the first few days after birth).
  • Age 50 or over with health problems, especially if combined with limited education and limited work history.

Note: A claimant, including a child, applying for SSI based on disability or blindness may receive up to six months of payments before the final determination of disability or blindness if the claimant is determined to presumptively have a disability or be blind and meets all other eligibility requirements.

Related Policy

Definition of Disability, B-432 
Social Security's Criteria for Disability, B-432.1 
Form H1859, Social Security Administration Benefits for People with Disabilities Receiving TANF


A—1320 Types of Income

Revision 15-4; Effective October 1, 2015

All Programs

There are differences between TANF, Medical Programs and SNAP in countable and exempt income.


Income that is not specifically listed in this section must be counted.


A—1321 Disability Benefits

Revision 13-2; Effective April 1, 2013


A—1321.1 Agent Orange Settlement Payments

Revision 15-4; Effective October 1, 2015

All Programs

Agent Orange Settlement Payments disbursed by AETNA Insurance Company and paid to the following individuals are exempt:

  • veterans with disabilities exposed to Agent Orange while in Vietnam who suffer from total disabilities caused by any disease, and
  • survivors of these deceased veterans.

These veterans receive yearly payments. Survivors of these deceased veterans receive a lump-sum settlement payment.


VA payments are counted as unearned income, including benefits paid to veterans with service-connected disabilities resulting from exposure to Agent Orange. See A-1324.20, Veterans Benefits.

Related Policy

Lump-Sum Payments, A-1331