A-1320, Types of Income

Body

Revision 15-4; Effective October 1, 2015

All Programs

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

TANF and SNAP

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.

TANF and SNAP

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

 

 

A—1321.2 Disability Insurance Benefits

Revision 16-4; Effective October 1, 2016

All Programs

Disability insurance benefits are normally paid to an individual who has suffered injury or impairment. These payments may be from an employer, insurance provider, or other public or private fund.
Advisors must determine the source of the benefit.

  • If the source is covered by an income type listed in A-1320, Income Types, such as RSDI [see A-1324.16, Retirement, Survivors and Disability Insurance (RSDI)], the procedures for that benefit must be used.
  • If the source is not covered by another income type listed in A-1320, the policy listed below must be used.

TANF and SNAP

Count as unearned income.

Medical Programs

Disability insurance benefits are exempt.

 

 

A—1321.3 Radiation Exposure Compensation Act Payments

Revision 15-4; Effective October 1, 2015

All Programs

Payments from the Radiation Exposure Compensation Act (the “Act”), Public Law 101-426, are exempt.

The Act established a program to pay damages to individuals for injuries or deaths caused by exposure to radiation from nuclear testing and uranium mining. When the affected individual is deceased, the surviving spouse, children, parents, grandchildren, or grandparents receive the payments.

 

 

A—1321.4 Worker's Compensation

Revision 15-4; Effective October 1, 2015

TANF and SNAP

The gross benefit is counted as unearned income, less amounts:

  • recouped for a prior worker's compensation overpayment; or
  • paid for attorney's fees. Note: The Texas Workers' Compensation Commission (TWCC) or a court sets the amount of the attorney's fee to be paid.

A deduction from the gross benefit for court-ordered child support payments is not allowed.

Exception: Worker's compensation benefits paid to the individual for out-of-pocket medical expenses are considered as reimbursements.

Medical Programs

All workers’ compensation payments are exempt.

 

 

A—1322 Education and Training

Revision 13-2; Effective April 1, 2013

 

 

A—1322.1 Educational Assistance

Revision 15-4; Effective October 1, 2015

All Programs

Educational assistance, including educational loans, scholarships, fellowships, grant monies, and work study, are exempt, regardless of the source. Loans for education, including loans from relatives or other people, are considered as educational assistance only if payment is deferred.

Educational assistance is:

  • any financial aid for vocational or educational courses from:
    • an organization (such as fraternal, alumni, etc.); or
    • a government program or agency (such as the U.S. Office of Education, Department of Veterans Affairs, or Texas Department of Assistive and Rehabilitative Services).
  • provided to students who are enrolled in a:
    • program that provides for completion of a secondary high school diploma or the equivalent (such as a general equivalency diploma [GED]);
    • school for people with intellectual or physical disabilities; or
    • post-secondary institution.

    Note: "Post-secondary" includes institutions of higher education and others not requiring a high school diploma (such as community colleges and vocational educational programs) authorized by the state to provide educational or training programs beyond secondary education.

The U.S. Office of Education under Title IV of the Higher Education Act administers most educational assistance programs. A few examples of the most common Title IV educational assistance grants include:

  • Pell Grants,
  • Stafford Loan Program,
  • Parent Loans for Students (PLUS Loans),
  • Supplemental Educational Opportunity Grants,
  • College Work Study, and
  • Carl D. Perkins Loans (Title IV, Part E) (formerly National Direct Student Loans).

The National Community Services Act (NCSA) program also provides educational assistance. Individuals are awarded from $1,000 to $4,000 per year of completed services to apply toward past or future educational expenses. The educational award is not counted, as it is always made payable directly to the financial institution or institution of higher learning.

The Department of Veterans Affairs administers education programs designed for veterans, reservists, members of the National Guard, and their widows and orphans. These include:

  • Montgomery GI Bill (MGIB) Active Duty Educational Assistance Program,
  • Vocational Rehabilitation,
  • Post-Vietnam Era Veterans' Educational Assistance Program (VEAP),
  • Survivor's and Dependent's Educational Assistance (DEA), and
  • MGIB - Selected Reserve Educational Assistance Program.

Related Policy

Educational Assistance, A-1239

 

 

A—1322.2 Job Training

Revision 03-7; Effective October 1, 2003

 

 

A—1322.2.1 Workforce Innovation and Opportunity Act (WIOA)

Revision 15-4; Effective October 1, 2015

All Programs

Temporary employment of six months or less for disaster-related work, paid under the Workforce Innovation and Opportunity Act and funded by the National Emergency Grant, is exempt.

TANF and Medical Programs

All WIOA payments are exempt.

SNAP

All WIOA payments are exempt except on-the-job training (OJT) payments funded under the Workforce Innovation and Opportunity Act. OJT payments are counted as earned income for adults.

OJT payments are exempt if received by a child who is under:

Related Policy

Government Disaster Payments, A-1324.3

 

 

A—1322.2.2 Other Job Training and Training Allowances

Revision 15-4; Effective October 1, 2015

All Programs

Portions of payments earmarked as reimbursements for training-related expenses are exempt, and any excess is counted as earned income.

 

 

A—1323 Employment and Self-Employment Income

Revision 13-2; Effective April 1, 2013

 

 

A—1323.1 Children's Earned Income

Revision 20-2; Effective April 1, 2020

TANF

A dependent child's earned income is counted unless the child (as defined in A-221, Who Is Included) is a:

  • full-time student, including a home-schooled child; or
  • part-time student employed less than 30 hours a week.

Exception: See A-1322.2.1, Workforce Innovation and Opportunity Act (WIOA).

SNAP

A child's earned income is counted unless the child:

  • is under age 18;
  • attends elementary, middle, or high school, including home schooling; or
  • attends general equivalency diploma (GED) classes; and
  • lives with natural or adoptive parents, stepparent or is under parental control of another household member.

Exception: See A-1322.2.1, Workforce Innovation and Opportunity Act (WIOA).

TANF and SNAP

Breaks in school attendance, such as summer vacation and holidays, do not change the student status of a child. Ensure that the child's enrollment will continue following the break.

If the child's earnings cannot be separated from other household members' earnings, divide the total earnings equally by the number of working members.

Medical Programs

A child's earned income may be exempted from the MAGI household income as explained in A-1341, Income Limits and Eligibility Tests, Medical Programs, Step 3.

 

 

A—1323.2 Contractual Earnings

Revision 05-5; Effective October 1, 2005

All Programs

Contractual earnings are wages and salaries only. Self-employment income, unearned income, or income received on an hourly or piecework basis are not included. The two basic types of contractual earnings are:

  • Seasonal employment — available only during certain months of the year and recurs each year. Examples: school-related employment, certain types of farm work, and summer or winter employment. Divide seasonal employment that is a household's annual means of support over 12 months. If the income supports the household for only a portion of the year and the household has income from other sources the rest of the year, average the earnings over the time they are intended to cover.
  • Contractual employment — nonseasonal employment that is contracted for a specific time and does not recur. Divide earnings over the time covered by the contract.

 

 

A—1323.2.1 Monthly Budgeting of Contractual Earnings

Revision 20-2; Effective April 1, 2020

All Programs

Budget contractual earnings monthly by:

  • dividing the total gross amount earned under the contract by the number of months the contract covers or by 12 months, whichever is applicable; and
  • adding this amount to any other income, and budgeting according to usual procedures.

    Note: If the person does not receive the income agreed to in the contract, or if income is interrupted because of participation as a striker in a work slow-down or stoppage, do not budget the contractual earnings using the steps above since the person cannot reasonably anticipate receiving the contractual income. For strikers, follow policy in A-1367.1 . If the person's employment situation changes and contractual earnings resume:
     
  • recalculate the income or adjust the benefits accordingly; and
  • document all the facts that caused the recalculation or adjustment.

Related Policy

How to Project Income, A-1355
Strikers, A-1367
Eligibility of Strikers, A-1367.1

 

 

A—1323.3 Military Pay Allotments and Allowances

Revision 15-4; Effective October 1, 2015

All Programs

Military pay and allowances for housing, food, base pay, and flight pay is counted as earned income less pay withheld to fund education under the G.I. Bill.

An allotment is a specified amount of money from each paycheck of the military wage earner that is designated to go to someone else. Military allotments are counted as unearned income.

 

 

A—1323.3.1 Family Subsistence Supplemental Allowance (FSSA)

Revision 15-4; Effective October 1, 2015

TANF and SNAP

The Family Subsistence Supplemental Allowance is a monthly payment made to certain low-income service members and their families so they will not have to depend on SNAP to meet their needs. The service members' pay statements usually include the FSSA and are counted as earned income.

Medical Programs

FSSA payments are exempt.

 

 

A—1323.3.2 Combat (Hazardous Duty) Payments

Revision 15-4; Effective October 1, 2015

TANF

All of the combat payments, also known as hazardous duty payments, received by a legal parent who is a member of the U.S. military, absent solely because the individual has been deployed to a combat zone, are counted.

SNAP

Any portion of military pay identified as combat pay, including any portion of combat pay contributed to a household from military personnel deployed to a combat zone, is excluded.

The advisor must determine whether any funds contributed to the household by military personnel, such as through joint bank accounts or military allotments, are considered combat pay. Any portion identified as combat pay is exempt from income. The following steps should be used to determine the amount of military income to exclude as combat pay:

Steps Action
1. Verify the monthly amount of combat pay received, as required in A-1370, Verification Requirements.
2.

Determine the amount of military pay the deployed individual was making available to the household before deployment to the combat zone.

If the deployed person was:

  • a household member before deployment, the amount would be the individual's net military pay.
  • not part of the household before deployment, then consider any amount made available from the individual's pay before deployment.
3. Determine the amount of military pay the deployed individual is making available to the household after deployment to the combat zone.
4. If the amount of contribution the household receives from the military personnel after deployment:
  • is equal to or less than the amount the household was receiving before deployment, then none of that contribution would be considered combat pay. Count the full amount of the contribution as unearned income.
  • exceeds the amount received before deployment, exclude the excess as combat pay (not to exceed the verified monthly amount of combat pay) and count the remainder (if any) as unearned income.

Medical Programs

Combat (hazardous duty) payments are exempt.

Related Policy

Who Is Included, A-241.1
Verification Requirements, A-1370
Glossary, Combat Pay and Combat Zone

 

 

A—1323.4 Self-Employment

Revision 12-4; Effective October 1, 2012

All Programs

Self-employment income is usually income 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 income taxes or FICA, even if required to do so by law, the person is considered self-employed.

Advisors must inform households in writing to keep self-employment records and receipts for verification purposes for future recertifications. Form TF0001, Notice of Case Action, contains the self-employment information.

Note: If a household has self-employment income and meets the streamlined reporting criteria, assign a six-month certification period.

 

 

A—1323.4.1 Types of Self-Employment Income

Revision 15-4; Effective October 1, 2015

All Programs

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;
  • income from property; and
  • independent contracting.

 

 

A—1323.4.2 Property Income

Revision 15-4; Effective October 1, 2015

All Programs

Income from renting, leasing, or selling property on an installment plan is self-employment income. Property includes equipment, vehicles, and real property.

TANF and SNAP

Income from property is counted as:

  • earned if the:
    • person spends an average of at least 20 hours a week in management or maintenance activities; or
    • income is from noncommercial boarding situations.
  • unearned if the person spends an average of less than 20 hours a week in management or maintenance activities.

Work-related expenses are allowed for earned income. For unearned income, only the expenses associated with producing the income should be deducted.

If the individual sells property on an installment plan, the payments are counted as income. The balance of the note is exempted as an inaccessible resource.

Medical Programs

Income from renting, leasing, or selling property on an installment plan is counted as self-employment income.

 

 

A—1323.4.3 Noncommercial Roomer/Boarder Payments

Revision 15-4; Effective October 1, 2015

TANF and SNAP

The noncommercial roomer/boarder policy is used if a noncertified household member makes payments to a certified member under a formal or informal landlord/tenant relationship. Payments made by boarders for room, meals, and other shelter expenses are counted. Payments made by roomers for room and other shelter expenses are counted.

See A-1323.4.5, Allowable Costs of Producing Income, to determine the countable amount of noncommercial roomer/boarder payments. If there is not a formal or informal landlord/tenant relationship, the policy in A-1326.1, Cash Gifts and Contributions, applies.

TANF

Roomer/boarder status should not be given to:

  • anyone whose income can be applied to the certified group; or
  • a dependent child who is an ineligible alien.

SNAP

To be considered a boarder, a person residing with the household must pay reasonable compensation for meals and lodging. Reasonable compensation is:

  • the amount of the full allotment for the number of boarders if the boarders eat an average of more than two meals a day with the household; or
  • two-thirds of the full allotment for the number of boarders if the boarders eat an average of two meals a day or less with the household.

In determining "reasonable compensation," only the amount paid for meals is counted if it can be separated from lodging.

If the individual chooses to include a boarder as a household member:

  • all of the boarder's income, resources and deductions are counted; but
  • the payment from the boarder is not counted as income since it is transferred between household members.

If the individual chooses not to include a boarder as a household member:

  • the boarder's income, resources, or deductions are not included in the household; but
  • the payment from the boarder is counted as self-employment income for the household.

Medical Programs

The noncommercial roomer/boarder policy is used when an individual in the MAGI household composition receives payments from someone in their physical household under a formal or informal landlord/tenant relationship. Payments made by boarders for room, meals, and other shelter expenses are counted as self-employment income. Payments made by roomers for room and other shelter expenses are counted as self-employment income.

See A-1323.4.5, Allowable Costs of Producing Income, to determine the countable amount of noncommercial roomer/boarder payments. If there is not a formal or informal landlord/tenant relationship, the policy in A-1326.1, Cash Gifts and Contributions, applies.

Related Policy

Nonmembers, A-232.1

 

 

A—1323.4.4 Determining the Amount of Self-Employment Income

Revision 16-4; Effective October 1, 2016

All Programs

If the household receives self-employment income monthly or more often (such as semi-monthly, bi-weekly, weekly or daily), recent self-employment pay amounts may be used to project income.

If the household had self-employment income for the past year that was received less often than monthly, the income figures from the previous year's business records or tax forms, including the IRS Schedule C-Form 1040- Profit or Loss from Business, may be used if the records are anticipated to reflect current self-employment income and expenses.

Exceptions:

  • If the previous year's records do not accurately represent the household's current self-employment income because the household has experienced a substantial increase or decrease in business, anticipate income using more current information such as updated business ledgers or day books, or contact people who have similar businesses.
  • If the business is new and there is insufficient information to make a reasonable projection based on last year's records, anticipate earnings and expenses using only the recent business records along with the individual's statements about expected income and expenses and any applicable information from collateral sources.
  • If the income terminates before completing the EDG, budget actual income and expenses for the month the income terminates.
  • For Children’s Medicaid programs (TP 43, TP 44, TP 45 and TP 48), the previous year’s business records or tax forms are acceptable, no matter the pay frequency.

When calculating self-employment income, the financial profit from a sale or transfer of capital goods, possessions (such as products, raw materials, equipment), or ownership of a business, must be considered.

Financial profit from the sale or transfer of capital goods that the household expects to receive in the next 12 months should be added and the total averaged over 12 months. This averaged amount should be used for each certification period within the next 12 months, unless a new average is computed because the person received a profit from the sale or transfer of capital goods that was unanticipated or a different amount than anticipated.

Determining the Amount of Self-Employment Income at Application

All Programs

New applicants who have not received TANF, Medical Program coverage, or SNAP for a period of three consecutive months before the application month, or new household members who have not received benefits for three months before moving into the household, may not have been keeping accurate records of self-employment income and expenses. The policy in C-932, Advisor Responsibility for Verifying Information, should be used to obtain verifications needed to determine eligibility and what types of verification are readily available to the household. Any business records that are available for use (even if this documentation is for a short period of time) should be accepted, in addition to the individual's statement and any proof that might be available from a collateral source, as sufficient proof.

The advisor must verify:

  • at least the last two recent pay amounts when determining the amount of self-employment income received monthly;
  • at least four consecutive recent pay amounts when determining the amount of self-employment income received more often than monthly, such as semi-monthly, bi-weekly or weekly; and
  • at least four consecutive weeks for self-employment income received daily.

The individual is not required to provide verification of self-employment income and expenses for more than two calendar months before the interview date for income received monthly or more often.

The applicant's statement is accepted as proof if:

  • there is a reasonable explanation why documentary evidence or a collateral source is not available; and
  • the applicant's statement does not contradict other individual statements or other information received by the Texas Health and Human Services Commission (HHSC).

Exception: If the business is new and there is insufficient information to make a reasonable projection, the income is calculated based on anticipated earnings and expenses.

The advisor must inform the household in writing to keep self-employment records and receipts for verification purposes for future recertifications. Form TF0001, Notice of Case Action, contains the self-employment information.

Medical Programs

If the individual applies for three months prior Medicaid, the following should be budgeted in each prior month:

  • actual income and expenses for self-employment income received monthly or more often, or
  • projected monthly average amount for self-employment income received annually or seasonally.

Determining the Amount of Self-Employment Income at TANF Periodic Reviews, SNAP Recertifications, and Medical Programs Renewals

All Programs

For income received less often than monthly, only information from the period of time since HHSC last requested verification of self-employment needs to be verified. Verification that was previously verified is not needed (see C-932). Verification is needed for:

  • at least the last two recent pay amounts when determining the amount of self-employment income received monthly;
  • at least four consecutive recent pay amounts when determining the amount of self-employment income received more often than monthly, such as semi-monthly, bi-weekly or weekly; and
  • at least four consecutive weeks for self-employment income received daily.

The individual is not required to provide verification of self-employment income and expenses for more than two calendar months before the interview date for income received monthly or more often.

If the advisor informed the household to maintain accurate self-employment records and receipts after certification, the household must provide them before being recertified unless:

  • the records and receipts are not available because of a reason beyond the household's control, such as being lost in a fire or flood; or
  • if due to a verified physical or mental disability, the applicant is unable to complete the task. Note: This requirement is not applicable if the self-employed person has not received TANF, SNAP, or Medical Program coverage for three consecutive months before reapplying.

Related Policy

Computation Methods, A-1323.4.6

 

 

A—1323.4.5 Allowable Costs of Producing Income

Revision 21-2; Effective April 1, 2021

All Programs

Allowable self-employment expenses are based on costs that can be deducted from federal income taxes according to the Internal Revenue Service’s (IRS) Schedule C, Form 1040 - Profit or Loss From Business. There are certain self-employment expense types that are not allowed for SNAP.

Use an automatically calculated monthly expense amount generated by TIERS to determine eligibility if the IRS Schedule C, Form 1040 - Profit or Loss From Business, is provided.

Allowable and Non-Allowable Self-Employment Expenses by Program

Expense Types TANF and MAGI Programs SNAP

Advertising

Allow

Allow

Car and truck expenses

Allow

Allow

Commissions and fees

Allow

Allow

Contract labor

Allow

Allow

Costs not related to self-employment

Non-allowed

Non-allowed

Costs related to producing income gained from illegal activities, such as prostitution and the sale of illegal drugs

Non-allowed

Allow

Depletion

Allow

Non-allowed

Depreciation

Allow

Non-allowed

Employee benefit programs

Allow

Allow

Insurance

Allow

Allow

Interest

Allow

Allow

Legal and professional services

Allow

Allow

Net loss that occurred in a previous period

Non-allowed

Non-allowed

Office expense

Allow

Allow

Pension and profit-sharing plans

Allow

Allow

Rent or lease

Allow

Allow

Repairs and maintenance

Allow

Allow

Supplies

Allow

Allow

Taxes and licenses

Allow

Allow

Travel, meals, and entertainment

Allow

Non-allowed

Travel to and from place of business

Non-allowed

Non-allowed

Utilities

Allow

Allow

Wages

Allow

Allow

Other expenses

Allow

Allow

Note: When determining transportation costs, the person may choose to use 56 cents per mile instead of keeping track of actual expenses.

Noncommercial Roomer or Boarder Payments

All Programs

If the household receives roomer or boarder payments, as explained in A-1323.4.3, Noncommercial Roomer/Boarder Payments, the cost of doing business is deducted from each monthly payment. Count the remainder as self-employment income.

For roomers, the cost of doing business is actual costs. For boarders, the cost of doing business is:

  • the amount of the monthly SNAP allotment for the number of boarders (average of more than two meals a day);
  • two-thirds of a full allotment for the number of boarders (average of two meals a day or less); or
  • the actual cost of providing room and meals if the actual cost exceeds the monthly SNAP allotment for the number of boarders.

Note: Each expense must be identified and verified when using actual costs.

Net Financial Loss

All Programs

A self-employment net financial loss must not be deducted from other types of household income. 

Exception: The loss may be deducted from other household income if:

  • the loss results from a self-employment farming operation; and
  • the household received or anticipates receiving annual gross income of $1,000 or more from the farming operation (from Step I, Line A, Page 3, Form H1049, Client's Statement of Self-Employment Income).

TANF

The farm loss amount may be deducted from other non-farm self-employment income during the budgetary (100 percent) needs test.

Any remaining farm loss amount may be deducted during the recognizable needs test.

Medical Programs

The farm loss amount may be deducted from other non-farm self-employment income during the federal poverty level (FPL) test.

Any remaining farm loss amount may be deducted after the work expense standard deduction and child or incapacitated care costs.

SNAP

The farm loss may be deducted from other non-farm self-employment income before applying the gross income test.

Any remaining farm loss may be deducted from other earned or unearned income after applying the 20 percent earned income deduction.

 

 

A—1323.4.6 Computation Methods

Revision 15-4; Effective October 1, 2015

All Programs

There are four computation methods for self-employment income that may be used to calculate monthly income amounts for budgeting purposes:

  • annual,
  • monthly,
  • daily, and
  • anticipated.

Annual Computation Method

For this method, the individual must have been self-employed for at least the past full year.

The self-employment income projection period, usually 12 months, is the period of time the household expects the income to support the family. A projection period should be established for households that receive self-employment income that is intended to support the household for:

  • the year, but is received less frequently than monthly, such as farm income that may only be received a few times per year when crops or livestock are sold; or
  • a specific period in time, but is received less frequently than monthly.

The projection period should be determined at application when the individual reports self-employment income received less often than monthly. Note: For Medicaid EDGs, if the individual is eligible for prior Medicaid, the prior months are not included in the 12-month projection period.

The following steps are used to determine the projection period for self-employment income:

  1. Determine whether the self-employment is annual or seasonal, since that will determine the length of the projection period.
    • Annual – intended to support the household for at least the next full 12 months. The projection period is 12 months whether the income is received yearly or less often than monthly.
    • Seasonal – intended to support the household for less than 12 months since it is available only during certain months of the year. The projection period is the number of months the self-employment is intended to provide support.
  2. Determine the first month of the projection period. It is always the first month the household receives benefits, unless the individual will begin working in a future month. In this situation, use the month the self-employment begins as the first month of the projection period.

Once the projection period is established, it must not be changed. The projection period remains the same until the:

  • individual no longer supports the household through self-employment;
  • 12-month or seasonal period ends; or
  • EDG is denied, and the individual misses one full month's benefits before reapplying.

Exception: When there is a new source of self-employment income received less often than monthly, and the individual expects the income to support the household for the year or a specific period of time, establish a projection period for the months that the individual states the income is intended to cover. Since this projection period covers income from a new source, at redetermination, ensure that the income and circumstances still fit with the annual computation method criteria. Until the household has 12 months of income history, the projection period is conditional and may be changed as may the type of computation method used to calculate self-employment income.

In determining the monthly figure to use for new self-employment income when calculating a budget amount:

  • the monthly computation method is used if there are two full representative months of self- employment income received less often than monthly; and
  • the daily computation method is used if there are less than two full representative calendar months of self-employment income received less often than monthly.

On an active EDG, when an individual reports a new source of self-employment, the first month of the projection period is the change effective month.

Monthly Computation Method

The monthly computation method is used in two situations:

  1. If the frequency is known and consistent, the appropriate conversion factor is used when calculating self-employment income and/or expenses. Conversion factors are not used when income is received on any other basis, such as daily or irregularly.
If the frequency is … use the conversion factor …
weekly 4.33
bi-weekly 2.17
semi-monthly 2
  1. If the individual has at least two full representative calendar months of self-employment income and the source or the frequency is unknown and inconsistent, each month's self-employment income should be totaled and deducted from the allowable expenses for each corresponding month.

Daily Computation Method

The daily computation method is used when:

  • there are less than two full representative calendar months of self-employment income; and
  • the source or frequency of the income is unknown or inconsistent (income received irregularly, not on a weekly, bi-weekly or semi-monthly basis).

The daily method is used until there are at least two representative calendar months of income. Once there are two full representative calendar months, the monthly computation method is used.

Anticipated Self-Employment Method

The anticipated method to calculate self-employment income is used when:

  • there is no income history on which to base an average, and the individual will receive the income on a known and consistent basis; or
  • there is a change that will make the current or actual self-employment income non-representative.

Anticipated means the individual knows who will pay, when they will pay, and how much will be paid. If the individual knows the source, but not the amount and/or frequency, the daily computation method in A-1323.4.7, Determining Net Self-Employment Income, should be used.

 

 

A—1323.4.7 Determining Net Self-Employment Income

Revision 15-4; Effective October 1, 2015

All Programs

Annual Computation Method

The following steps are used to determine net self-employment income when using the annual computation method:

  1. Determine the projection period.
  2. Determine the total gross self-employment income for the past year.
  3. Determine the total allowable expenses for the past year.
  4. Determine the yearly net income by subtracting the total allowable expenses from the total gross income.
  5. Determine the monthly net income by dividing the total yearly net income by the number of months of earnings history used.

If the self-employment income is annual and no substantial changes are expected, the income should be projected for 12 months. If the self-employment income is seasonal and no substantial changes are expected, the income should be projected for the seasonal period.

Monthly Computation Method

The following steps are used for the monthly computation method:

  1. Determine the total monthly gross self-employment income.
  2. Determine the total allowable expenses for each corresponding month.
  3. Subtract the total allowable expenses from the total gross self-employment income for the corresponding month.
  4. Look at the net monthly income and determine which months are representative of future earnings and project over the length of the certification period.

Note: If the frequency is known and consistent, the appropriate conversion factor should be used in Step 1 and Step 2.

Daily Computation Method

The following steps are used for the daily computation method:

  1. Determine the total gross income earned from the day the self-employment began through the interview date.
  2. Determine the number of days the income was received. The day self-employment begins is the day any part of the self-employment activity occurs (for example, buying supplies, working, earning income, etc.).
  3. Divide the total gross income by the number of days in the period the income was received.
  4. Multiply the daily income by 30 to get the monthly estimate of gross self-employment income.
  5. Determine the total verified self-employment expense paid from the day the self-employment began through the interview date.
  6. Determine the number of days the expense was to cover. Use the same number of days used to calculate income.
  7. Divide the total expense amount by the number of days in the period.
  8. Multiply the daily expense deduction by 30 to get the monthly estimate of the expense.
  9. Subtract monthly expenses from gross monthly income to determine net monthly self-employment.

Anticipated Self-Employment Method

The following steps are used for the anticipated self-employment method:

  1. Determine how often the individual will be paid and the amount.
  2. Multiply the pay amount by the appropriate frequency to determine the projected monthly amount:
    • Weekly: amount x 4.33
    • Bi-weekly: amount x 2.17
    • Semi-monthly: amount x 2

      Note: If the income amounts will fluctuate, a pay period average should be determined and multiplied by the appropriate conversion factor.
  3. Projection should be made over the length of the certification period.

Related Policy

How to Project Income, A-1355
Length of Certification, A-2324

 

 

A—1323.4.8 Changes in Annual or Seasonal Self-Employment Income

Revision 15-4; Effective October 1, 2015

All Programs

When an individual reports a change in self-employment income during the certification period, it should be considered part of the normal fluctuations of the business if the current budget already includes fluctuations as significant as the change that the individual is reporting, and the budget is not revised. If a reported change is not part of the normal fluctuations of the business, the income and expenses should be re-evaluated and the change considered substantial if it results in a change to the average monthly net self-employment income of more than $25. If the change results in a change of $25 or less, benefits should not be adjusted.

If a 12-month income projection period was previously established, the period should not be changed, unless it has expired or the individual reports no longer supporting the household with self-employment income. Even if the income or expense changes resulted in a different projected self-employment income, the projection period is the same.

If the income projection period has expired, a new projection period should be established with required verifications, even if the individual indicates no changes in the business.

Note: When the individual reports a change in self-employment income that is not received annually or seasonally, the policy in B-631, Actions on Changes, should be followed.

 

 

A—1323.4.9 Rebudgeting Income and Expenses

Revision 15-4; Effective October 1, 2015

All Programs

If the individual reports a substantial change in annual or seasonal self-employment income, the income and expenses must be rebudgeted using the following method for actual income and expenses received.

Actual income from the beginning of the projection period through the month before re-evaluation should be used. The following steps are used to rebudget income in this situation.

  1. Determine the actual income for the months from the beginning of the projection period through the month before re-evaluation.
  2. Project the new income for the rest of the projection period.
  3. Add the income from Step 1 and 2 to determine the annual or seasonal amount.
  4. Divide the total from Step 3 by 12 or the number of months in the seasonal period to get the new monthly average.
  5. Compare the new monthly amount to the previous average. If the change is substantial, budget the new amount over the remainder of the projection period.

 

 

A—1323.5 Wages, Salaries, Commissions, and Tips

Revision 21-2; Effective April 1, 2021

All Programs

Except for MAGI Medical Programs, the gross amount of all wages, salaries, commissions, bonuses, and tips count as earned income before deductions. This includes flexible fringe benefits, cafeteria plans, and employee retirement contributions that are withheld from the amount. MAGI Medical Programs exclude pre-tax contributions from gross income.

Wages held by the employer at the request of the employee and garnished wages are counted as income in the month the household would otherwise have received them. If an employer holds the employee's wages as a general practice, this money counts as income in the month it is actually received by the employee.

An advance counts in the month it is received. When an advance is repaid, the payback amount is deducted from the gross pay in the month it is paid back and the remainder is budgeted as the countable gross amount.

Medical Programs

Review income verification documents to determine if the person makes pre-tax contributions through their employer.

Pre-tax contributions are deducted before the gross income is taxed and must be excluded when determining MAGI countable gross income. Pre-tax contributions consist of the following:

  • Retirement Savings Accounts (401K, 457, etc.);
  • Dependent Care Flexible Spending Accounts;
  • Health Savings Accounts;
  • Health Insurance Premiums;
  • Commuter Expenses Accounts; and
  • Life Insurance Premiums.

Pend the EDG if the person claims pre-tax contributions, but verification is not provided. If verification is not provided by the due date, do not exclude the pre-tax contribution from the employment income. Count the gross income including the pre-tax contribution amounts. Staff must not deny the EDG for failure to provide pre-tax contribution information.

Related Policy

How to Project Income, A-1355
Budgeting Options for SNAP Households, A-1355.1

 

 

A—1323.5.1 Federal Tax Refunds and Earned Income Tax Credits (EIC)

Revision 21-2; Effective April 1, 2021

All Programs

Households with earnings below levels established by the Internal Revenue Service (IRS) are potentially eligible to receive EIC payments from the IRS.

EIC money is included in a person's:

  • paycheck (advance EIC payments) before the person files an income tax return, or
  • IRS refund after the person files an annual income tax return.

Federal tax refunds and EIC payments are exempt as income.

Related Policy

Federal Tax Refunds and Earned Income Tax Credits (EIC), A-1232.2

 

 

A—1323.5.2 Flexible Fringe Benefits

Revision 15-4; Effective October 1, 2015

All Programs

Fringe benefit plans allow the employee to choose from benefit components such as insurance, extra vacation time, and payments to third parties for medical bills or child care. These are also called "cafeteria plans."

Under some plans, employers may:

  • withhold wages to pay for benefits selected by the employee; or
  • offer benefit credits in addition to wages, which the employee can use to purchase benefits.

Some plans may pay the remaining unused credit as part of the employee's wages.

TANF and SNAP

 

If the employer … the advisor must count …
withholds the employee's wages to purchase benefits, the held wages as earnings in the pay period that the employee would have normally received them.
provides credit in addition to wages, as earnings only the portion that is paid directly to the employee. If the employer pays the unused credit in cash, the advisor must follow the steps below to determine countable excess income.
  1. Determine the total amount of gross wages/salary.
  2. Add the benefit credit amount to the wages/salary from Step 1.
  3. Subtract the cost of fringe benefits up to the amount of the benefit credit from the amount in Step 2.
  4. The remaining income from Step 3 is the countable gross earned income for the EDG.

Medical Programs

Flexible fringe benefits are exempt.

 

 

A—1323.5.3 Income from Tips

Revision 15-4; Effective October 1, 2015

All Programs

Household members who are employed in service-related occupations (beauticians, waiters, delivery staff, etc.) are likely to earn tips in addition to wages. Tips are counted as earned income.

Tip income is added to wages before applying conversion factors.

Note: Tips are not considered as self-employment income unless related to a self-employment enterprise.

 

 

A—1323.5.4 Vacation Pay

Revision 15-4; Effective October 1, 2015

TANF and SNAP

If an individual receives vacation pay … the payment is considered …
during or before termination of employment, earned income.
after termination of employment in one lump sum, a liquid resource in the month received.
after termination of employment in multiple checks, unearned income.

Medical Programs

Vacation pay is counted as unearned income.

Related Policy

Lump-Sum Payments, A-1242 and A-1331

 

 

A—1323.6 Temporary Census Income

Revision 20-3; Effective July 1, 2020

TANF, SNAP, TP 32 and TP 56

Wages paid by the Census Bureau for temporary employment related to census activities are exempt.

Medical Programs except TP 32 and TP 56

Wages paid by the Census Bureau for temporary employment related to census activities are counted as earned income.

 

 

A—1324 Government Payments

Revision 15-4; Effective October 1, 2015

TANF and SNAP

Government payments are counted unless exempted in this section or by other policy in A-1300, Income.

Medical Programs

Government payments are exempt.

 

 

A—1324.1 Adoption Assistance

Revision 15-4; Effective October 1, 2015

All Programs

Adoption assistance payments are exempt.

Note: A person receiving adoption assistance in a TANF budget or a certified group is exempt.

Related Policy

Who Is Not Included, A-222, No. 8

 

 

A—1324.2 Crime Victim's Compensation Payments

Revision 15-4; Effective October 1, 2015

All Programs

Crime victim's compensation payments are provided from the funds authorized by state legislation to assist a person who:

  • was 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 Office of the Attorney General (OAG) distributes the payments monthly or in a lump sum. These payments are exempt.

Related Policy

Crime Victim's Compensation Payments, A-1232.1

 

 

A—1324.3 Government Disaster Payments

Revision 15-4; Effective October 1, 2015

All Programs

Federal disaster payments and comparable disaster assistance provided by states, local governments, and disaster assistance organizations are exempt if the household is subject to legal penalties when the funds are not used as intended (including temporary employment of six months or less for disaster-related work, paid under the Workforce Innovation and Opportunity Act and funded by the National Emergency Grant).

Examples:

  • Payments by the Individual and Family Grant Program or Small Business Administration to rebuild a home or replace personal possessions damaged in a disaster.
  • Payments from the Federal Emergency Management Agency (FEMA) to assist with rent.

Related Policy

Government Disaster Payments, A-1232.4

 

 

A—1324.4 Government Housing Assistance

Revision 15-4; Effective October 1, 2015

All Programs

See A-1326.3, Energy Assistance, for energy or utility payments.

TANF and Medical Programs

The value of government housing or rental subsidies, whether cash, two-party check, in-kind, or vendor-paid, are exempt.

SNAP

The following payments are counted:

  • cash payments;
  • vendor payments paid from state or local government funds unless exempt as shown below; and
  • vendor payments paid from state or local funds for transitional housing for the homeless.

The following payments are exempt:

  • in-kind payments; and
  • federally funded vendor or two-party check payments.

 

 

A—1324.5 Transitional Living Allowance

Revision 15-4; Effective October 1, 2015

All Programs

Transitional living allowances (TLA) are exempt. The Texas Department of Family and Protective Services (DFPS) distributes TLA to a foster child who:

  • is under age 21;
  • has completed the preparation for adult living (PAL) classes; and
  • has left foster care or is transitioning out of foster care.

Payments:

  • are received for a maximum of 12 months;
  • cannot exceed $500 a month;
  • cannot total more than $1,000; and
  • are intended for expenses other than ongoing room and board.

Related Policy

Transitional Living Allowance, A-1232.5

 

 

A—1324.6 Reserved for Future Use

Revision 18-3; Effective July 1, 2018

 

 

A—1324.7 National and Community Service Act of 1990 (NCSA)

Revision 20-3; Effective July 1, 2020

All Programs

The National and Community Service Act of 1990 (NCSA) established a corporation to administer paid volunteer service programs. The corporation provides funds, training, and technical assistance to states and communities to develop and expand human, education, environmental and public safety services.

The corporation oversees programs created under the Domestic Volunteer Service Act (DVSA) of 1973 such as:

  • Volunteers in Service to America (VISTA);
  • Retired and Senior Volunteer Program (RSVP);
  • Foster Grandparents; and
  • Senior Companions.

The corporation also administers programs established in 1993 that include:

  • AmeriCorps;
  • Learn and Serve; and
  • National Senior Service Corps (Senior Corps).

For programs established in 1973:

Payments, living allowances, and stipends are exempt.

Exception: VISTA payments under Title I of the Domestic Volunteer Services Act of 1973 are exempt from income for SNAP only if the person was receiving SNAP at the time they began participating in the VISTA program. VISTA payments are counted as earned income for a person who applies for SNAP while already participating in the VISTA program. 

For programs established in 1993:

Payments except On the Job Training (OJT) payments are exempt.

OJT payments for adults are counted as earned income. A child's OJT payment is exempt if the child is under:

  • age 19; and
  • parental control of another household member.

Exception: OJT payments received by AmeriCorps volunteers are exempt.

Medical Programs

Use the exceptions for counting a child’s OJT income in the MAGI household income as explained in A-1341, Income Limits and Eligibility Tests, Medical Programs, Step 3.

SNAP

Exempt payments under Title V of Public Law 106-501, the Community Service Employment Program for Older Americans (formerly known as the Senior Community Service Employment Program).

 

 

A—1324.8 Native and Indian Claims

Revision 20-3; Effective July 1, 2020

TANF and SNAP

Exempted payments made to Native Americans under various public laws include, but are not limited to, the following:

  • Distributions from Native Corporations made under the Alaska Native Claims Settlement Act (ANCSA) (Public Law [PL] 92-203 and Section 15 of PL 100-241).
  • Funds distributed per capita or held in trust by the Indian Claims Commission for members of Indian tribes, as follows:
    • Grand River Band of Ottawa Indians (PL 94-540);
    • Income to certain tribal members from land held in trust by the United States government (PL 94-114, Section 6);
    • Income resulting from provisions of PL 92-254; and
    • Red Lake Band of Chippewa (PL 98-123, Section 3) or Assiniboine Tribe of the Fort Belknap Indian Community, and the Assiniboine Tribe of the Fort Peck Indian Reservation (PL 98-124, Section 5).
  • Funds distributed by the Secretary of the Interior to tribal members from:
    • tribal trust funds on a per capita basis (PL 98-64); or
    • judgment funds up to $2,000 per year, per person, from claims against the United States and held in trust or distributed on a per capita basis (PL 93-134, as amended by 97-458).
  • Payments by the Indian Claims Commission to the:
    • Passamaquoddy Tribe, the Penobscot Nation, and the Houlton Band of Maliseet Indians or any of their members [Maine Indian Claims Settlement Act of 1980, PL 96-420, Section 9(c)].
    • Confederated Tribes and Bands of Yakima Indian Nation or the Apache Tribe of the Mescalero Reservation (PL 95-433).
    • Seneca Nation or its members (Seneca Nation Settlement Act of 1990, PL 101-503).
    • Blackfeet, Gros Ventre, and Assiniboine tribes of Montana (PL 97-408).
    • Saginaw Chippewa of Mississippi [PL 99-123, Section 6(b)(2)].
  • Payments to the Turtle Mountain Band of Chippewa, Arizona (PL 97-403).
  • Payments $2,000 per year, per person, to heirs of deceased Indians made under the Old Age Assistance Claims Settlement Act (PL 98-500).

Exception: Money given to Native Americans from gaming revenues (such as from casino profits, race tracks, lotteries, etc.) is not exempt under these laws. Gaming revenues are counted as unearned income.

Medical Programs

American Indian/Alaskan Native (AI/AN) disbursement income is exempt and not counted under MAGI only if the person claiming that income type has verified their AI/AN status and provided verification of the income source, as explained in A-1370, Verification Requirements, for Medical Programs.

AI/AN disbursements include:

  • distributions from Alaska Native corporations and settlement trusts;
  • distributions from property held in trust, in the boundaries of a prior federal reservation;
  • distributions and payments from rents, leases, rights of way, royalties, usage of rights, or using natural resources from land under the supervision of the Secretary of the Interior or rights to off-reservations hunting, fishing, gathering, or natural resource usage;
  • payments from ownership/usage rights to items that are religious, spiritual, traditional, or cultural or rights that support subsistence/traditional lifestyle according to tribal law or custom; and
  • student financial assistance from the Bureau of Indian Affairs education program.

 

 

A—1324.9 Nutrition Programs

Revision 15-4; Effective October 1, 2015

All Programs

The following amounts are exempt:

  • the value of food assistance under the Child Nutrition Act of 1966 and under the National School Lunch Act; and
  • benefits received under Title VII, Nutrition Program for the Elderly, of the Older American Act of 1965.

 

 

A—1324.10 One-Time Grandparent Payments

Revision 15-4; Effective October 1, 2015

All Programs

One-Time Grandparent payments are exempt as income.

 

 

A—1324.11 One-Time Temporary Assistance for Needy Families (OTTANF)

Revision 15-4; Effective October 1, 2015

All Programs

OTTANF is exempt as income.

 

 

A—1324.12 Payments to Vietnam Veterans' Children

Revision 03-7; Effective October 1, 2003

 

A—1324.12.1 Payments to Vietnam Veterans' Children Born with Spina Bifida (Public Law 104-204)

Revision 15-4; Effective October 1, 2015

All Programs

These VA payments made to Vietnam veterans' children who are born with spina bifida are exempt.

 

 

A—1324.12.2 Payments to Children of Women Vietnam Veterans Born with Certain Birth Defects (Public Law 106-419)

Revision 15-4; Effective October 1, 2015

All Programs

VA payments made to the children of women Vietnam veterans who are born with a birth defect are exempt.

Related Policy

Payments to Children of Women Vietnam Veterans Born with Certain Birth Defects (Public Law 106-419), A-1232.7.2

 

 

A—1324.13 Payments to Victims of Nazi Persecution

Revision 15-4; Effective October 1, 2015

All Programs

Payments made to individuals because of their status as victims of Nazi persecution are exempt.

 

 

A—1324.14 Payments to World War II Filipino Veterans and Spouses

Revision 15-4; Effective October 1, 2015

All Programs

Under the American Recovery and Reinvestment Act of 2009 (Division A, Title X, Section 1002), some World War II Filipino veterans who served in the military forces of the Government of Commonwealth of the Philippines, and their spouses, are authorized to receive one-time lump-sum payments of up to $15,000.

These payments are exempt.

 

 

A—1324.15 Relocation Assistance

Revision 15-4; Effective October 1, 2015

All Programs

The following payments are exempt if provided under:

  • Title II of the Uniform Relocation Assistance and Real Property Acquisitions Act of 1970;
  • Title I of Public Law 100-383 (these payments are made to Aleuts or individuals of Japanese ancestry [or their heirs] who were relocated during World War II); or
  • Public Law 93-531 to members of the Navajo or Hopi Tribes.

 

 

A—1324.16 Retirement, Survivors and Disability Insurance (RSDI)

Revision 18-4; Effective October 1, 2018

All Programs

The benefit amount, including the deduction for the Medicare premium, less any amount being recouped for a prior RSDI overpayment, is counted as unearned income.

Note: If DFPS is the payee and the child gets Foster Care Medicaid:

  • No Cash, the RSDI income is counted; or
  • With Cash, the RSDI income is exempt.

See A-1326.15, Income Legally Obligated to Children in Department of Family and Protective Services (DFPS) Conservatorship, for more information on foster care types of assistance.

Note: SSA may deposit RSDI benefits into a Direct Express card debit account. See www.ssa.gov/pubs/10073.html.

For people who meet a MAGI exception as defined under Step 3 in A-1341, Income Limits and Eligibility Tests, calculate the countable amount of the person’s RSDI using the formula in Table 3, Step 3 of the Form H1042, Modified Adjusted Gross Income (MAGI) Worksheet: Medicaid and CHIP.

Related Policy

Debit Accounts, A-1231.2
Income Limits and Eligibility Tests, A-1341

 

 

A—1324.17 Supplemental Security Income (SSI)

Revision 17-1; Effective January 1, 2017

TANF

The income of an SSI recipient is exempt.

If the SSI recipient contributes to a member of the TANF unit, the contributions policy in A-1326.1.1, Contributions from Noncertified Household Members, applies.

Exception: All of the SSI benefits are exempt when the SSI recipient meets one of the following criteria.

  • The SSI recipient would otherwise be an eligible member of the TANF unit.
  • The SSI recipient would otherwise be someone whose income is "applied" to the TANF unit.
  • A TANF-certified member is the SSI recipient's payee.

Note: This policy applies to people who cannot get SSI financial assistance because of earnings but who continue to get SSI Medicaid.

SNAP

Counted as unearned income. The following amounts are deducted if the amount is being:

  • recouped for an SSI overpayment; or
  • collected by a qualified organization providing representative payee services, up to the lesser of 10 percent of the monthly benefit amount or:
    • $50 for SSI benefits based on alcoholism and/or drug abuse (SSI/DAA); or
    • $25 for non-SSI/DAA benefits.

Notes:

  • Advisors must verify with SSA that the qualified organization is authorized to collect a fee for representative payee services. The advisor must also verify with the qualified organization the amount collected for representative payee services.
  • If DFPS is the payee and the child gets Foster Care Medicaid:
    • No Cash, the SSI income is counted; or
    • With Cash, the SSI income is exempt.

A-1326.15, Income Legally Obligated to Children in Department of Family and Protective Services (DFPS) Conservatorship, includes more information on foster care types of assistance.

Note: SSA may deposit SSI benefits into a Direct Express card debit account. See www.ssa.gov/pubs/10073.html.

Medical Programs

SSI is exempt. Count the other income of an SSI recipient unless the income is exempt.

Related Policy

Plan for Achieving Self-Sufficiency (PASS), A-1326.8
Debit Accounts, A-1231.2

 

 

A—1324.18 Temporary Assistance for Needy Families (TANF)

Revision 15-4; Effective October 1, 2015

TANF and Medical Programs

TANF benefits are exempt from income.

SNAP

The TANF benefit amount (after recoupment) counts as unearned income.

Retroactive or restored TANF or refugee cash assistance payments are exempt as income. These payments should be considered lump-sum payments and counted as a resource.

Note: TANF benefits may be deposited into an Electronic Benefit Transfer (EBT) cash debit account and made accessible to recipients via an EBT card.

Exception: The recommended grant amount continues to be counted when the TANF grant is lowered for one or more of the following reasons:

  • a Personal Responsibility Agreement (PRA) penalty;
  • a recoupment for a TANF intentional program violation (IPV);
  • a disqualification for IPV or noncooperation with a TANF requirement (unless the individual is disqualified in SNAP for the same offense); or
  • an active TANF EDG is denied because of:
    • the noncooperation disqualification of an individual;
    • failure to sign Form H1073, Personal Responsibility Agreement;
    • PRA noncooperation; or
    • noncooperation with an audit or investigation.

SNAP benefits must not be increased in an existing certification period when TANF benefits are forfeited because of a noncooperation penalty. In situations where the TANF is denied:

  • the full TANF benefit is counted until the next SNAP certification period begins; and
  • the benefit continues to count when a SNAP certification period is extended.

In situations where there is a break in SNAP benefits of less than a month, the TANF continues to count through the next certification period when the:

  • individual received or will receive SNAP in the month of the PRA noncooperation, and either the first or second noncooperation month is also the first month of a new SNAP certification period; or
  • file date of the SNAP application and the TANF PRA noncooperation date are the same month, and SNAP benefits do not prorate to less than $10 in the month of application.

Note: This policy does not apply to other types of TANF disqualifications or denials or to denied TANF applications.

Examples:

During the SNAP certification period January – June, the date of noncooperation is February 1. The first noncooperation month is February, and the second noncooperation month is March. The TANF grant is denied in April. The TANF grant continues to count in the SNAP budget through June.

At a SNAP redetermination when there is a certified TANF EDG, the household fails to comply with TANF PRA requirements and is denied effective with March benefits. The date of noncooperation is January 1. The first noncooperation month is January, and the second noncooperation month is February. The SNAP application file month is January. When the SNAP redetermination is untimely in January:

  • because the last benefit month was December, the TANF counts in the ongoing SNAP budget since there is not at least a one-month break in SNAP benefits.
  • and the last benefit month was November, the TANF does not count in the forfeit and ongoing months because there is a break in SNAP benefits of one month or more. The TANF grant received in January, the month of redetermination, must be counted.
  • because the last benefit month was December, and the SNAP benefit prorates to zero for the application month, the application month is considered a break in benefits of at least one month. The TANF grant does not count in the forfeit or ongoing months.

When the SNAP redetermination is a new application or the individual was receiving SNAP in a different household, the TANF does not count in the forfeit or ongoing months. However, the TANF grant received in January, the month of application, must be counted.

 

 

A—1324.18.1 TANF Annual School Subsidy Payment

Revision 15-4; Effective October 1, 2015

All Programs

TANF annual school subsidy payments are exempt.

 

 

A—1324.19 Unemployment Compensation

Revision 15-4; Effective October 1, 2015

All Programs

Unemployment insurance benefits (UIB) are:

  • deposited into a debit account and accessible to claimants via the UIB debit card;
  • deposited directly into a personal checking or savings account; or
  • issued through a mailed paper check.

The gross UIB benefit, less any amount being recouped for a UIB overpayment, counts as unearned income.

Exception: The gross amount counts if the household agreed to repay a SNAP overpayment through voluntary garnishment.

Related Policy

How to Project Income, A-1355
Debit Accounts, A-1231.2
Payments Exempt as a Resource While Being Considered Income, A-1243

 

 

A—1324.20 Veterans Benefits

Revision 15-4; Effective October 1, 2015

All Programs

The VA provides payments to veterans with disabilities and/or their spouses/dependents and to spouses/dependents of deceased veterans. VA benefits are not subject to federal or state income tax or child support garnishment.

Three basic VA benefit programs are described in this section:

  • Pension,
  • Disability Compensation, and
  • Dependency and Indemnity Compensation (DIC).

VA Pension

VA pension payments are made to certain veterans with disabilities based on financial needs. Low-income veterans who either have a disability or are age 65 and older may be eligible for a VA pension if they have 90 days or more of active military service with at least one day during a period of war. Payments are made to bring the veteran's total income, including other retirement or Social Security income, to a level set by Congress. Recipients must re-qualify each year to continue to receive payments. There is a similar pension benefit available for surviving spouses and dependent minor children of such deceased veterans.

VA Disability Compensation

VA disability compensation is a payment made to a veteran with a service-related disability. Eligibility is not based on financial need. The amount of the payment varies with the percentage of the veteran's disability and the number of the veteran's dependents living in or out of the home. The payment can also be made to a spouse, child or parent of a veteran because of the service-related death of the veteran.

Dependency and Indemnity Compensation

DIC is a monthly benefit paid to eligible survivors of active duty service members and survivors of those veterans whose deaths are determined by VA to be service-related. This payment is a flat monthly payment, regardless of other income. The payment is payable for the life of the spouse, provided the spouse does not remarry before age 57; however, should a remarriage end, DIC benefits can be reinstated. This payment is adjusted annually for cost-of-living increases and is non-taxable. VA adds a monthly transitional payment to the surviving spouse with minor children for the first two years of DIC entitlement or until the last child turns age 18, whichever occurs first. See http://benefits.va.gov/Compensation/current_rates_dic.asp for current payment amounts.

Veterans with certain disabilities may be eligible for additional special monthly compensation such as:

  • Aid and Attendance and Housebound payments, which are an allowance to veterans and dependents who are in need of regular aid and attendance by another person, or a veteran who is permanently housebound; and
  • reimbursement for unusual medical expenses.

TANF and SNAP

The gross benefit less any amount recouped or suspended for VA overpayment is counted as unearned income, except as described below for reimbursement for medical and attendant care expenses.

These special compensation payments that are intended to cover medical and attendant care expenses are exempt. These payments are exempt as reimbursement as explained in A-1332, Reimbursements.

Apportioned VA payments are a direct payment of the dependent's portion of the VA benefit to a dependent spouse or child not living with the veteran. Apportioned VA payments are unearned income to the dependent spouse or child not living with the veteran.

Other Types of Veterans Benefits

  • Military retirement payment — A payment made to an individual who retired from active duty military service after at least 20 years of service. Military retirement is not a VA program, but is paid by the Defense Finance and Accounting Service in Cleveland (DFAS-CL). The gross payment is counted as unearned income.
  • Survivor Benefit Plan (SBP) — Active duty members are automatically enrolled in this program. Surviving spouses and/or children of service members who die while on active duty may be entitled to SBP payments made by DFAS-CL. SBP payments are equal to 55 percent of what a member's retirement pay would have been had the member been retired at 100 percent disability. An SBP payment is reduced by the amount of payments provided under the VA DIC program.

At retirement, retirees may choose to purchase the SBP. In this case, the SBP pays retired military members’ eligible survivors an inflation-adjusted monthly income. Basic SBP for a spouse pays a benefit equal to 55 percent of the retired individual's pay. Eligible children may also be SBP beneficiaries while they are dependents of the retired individual, either alone or added to spouse coverage. Any VA DIC paid to a spouse is subtracted from SBP payments, although VA DIC payments to or for children do not affect SBP payments. SBP premiums are refunded to the survivor if the monthly VA DIC amount is greater than the SBP monthly annuity.

The gross amount of any SBP payment is counted as unearned income.

  • VA educational assistance programs — Different programs provide education assistance, including vocational rehabilitation. The policy in A-1322.1, Educational Assistance, applies.

Medical Programs

All veterans benefits are exempt from income

 

 

A—1324.21 Relative and Other Designated Caregiver Program Payments

Revision 19-1; Effective January 1, 2019

All Programs

There are two types of Relative and Other Designated Caregiver Program Payments issued by DFPS, these include:

  • Kinship Reimbursement payments; and
  • Post-Permanent Managing Conservatorship Annual Reimbursement payments.

Both of these types of payments are exempt from income.

Related Policy

Relative and Other Designated Caregiver Program Payments, A-1232.13

 

 

A—1324.22 Healthy Marriage Development Program Payments

Revision 15-4; Effective October 1, 2015

All Programs

A payment received for completing the Healthy Marriage Development Program is exempt. The advisor must document as required by policy in A-1380, Documentation Requirements.

 

 

A—1324.23 Railroad Retirement Benefits

Revision 18-4; Effective October 1, 2018

Railroad retirement benefits may be paid to a person, the person's dependents or survivors. Some examples of railroad retirement benefits are sick pay, annuities, pensions and unemployment insurance benefits.
Count the gross benefit amount, including the deduction for the Medicare premium as unearned income. 

Exception: For Medicaid and Children’s Health Insurance Program (CHIP), people who meet a MAGI exception as defined under Step 3 in A-1341, Income Limits and Eligibility Tests, calculate the countable amount of the person’s railroad retirement benefits using the formula in Table 3, Step 3 of the Form H1042, Modified Adjusted Gross Income (MAGI) Worksheet: Medicaid and CHIP.

Related Policy

Income Limits and Eligibility Tests, A-1341

 

 

A—1325 Income from Property

Revision 02-8; Effective October 1, 2002

 

 

A—1325.1 Dividends and Royalties

Revision 15-4; Effective October 1, 2015

All Programs

Dividends count as unearned income. Exception: Dividends from insurance policies are exempt as income.

TANF and SNAP

Royalties count as unearned income, less any amount deducted for production expenses and severance taxes.

Medical Programs

Royalties count as unearned income. For allowable expenses, see A-1420, Types of Deductions.

 

 

A—1325.2 Payments for Oil, Gas, and Mineral Rights

Revision 15-4; Effective October 1, 2015

All Programs

Payments for oil, gas, and mineral rights count as unearned income.

 

 

A—1326 Other

Revision 08-1; Effective January 1, 2008

 

 

A—1326.1 Cash Gifts and Contributions

Revision 18-1; Effective January 1, 2018

TANF and SNAP

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 to March, April to June, July to September, and October to December.

If these contributions exceed $300 in a quarter, the excess amount counts as income in the month received.

Exception: Contributions from noncertified household members are budgeted according to policy explained in A-1326.1.1, Contributions from Noncertified Household Members.

Medical Programs

Count cash support only if:

  • it is given from a taxpayer to his or her tax dependent;
  • it is given by a taxpayer who is someone other than the receiver’s spouse or parent; and
  • the total amount exceeds $50 a month.

For example, a person gives $100 a month to her nephew and plans to claim her nephew as her tax dependent. This cash support will count for her nephew because the she is a taxpayer giving an amount to her tax dependent. She is not her nephew’s parent or spouse, and the amount exceeds $50 a month.

Related Policy

Energy Assistance, A-1326.3
Lump-Sum Payments, A-1242 and A-1331
MyGoals Payments, A-1326.27

 

 

A—1326.1.1 Contributions from Noncertified Household Members

Revision 15-4; Effective October 1, 2015

TANF and SNAP

If a noncertified person(s) lives in the home with a TANF/SNAP unit and shares household expenses (no landlord/tenant relationship), any payments the noncertified person makes to the unit for common household expenses (including food, shelter, utilities, and items for home maintenance) are exempt. If a noncertified household member makes additional payments for use by a certified member, it is a contribution.

If a noncertified household member makes payments to a certified member under a formal or informal landlord/tenant relationship, countable income is determined according to the roomer/boarder policy in A-1323.4.3, Noncommercial Roomer/Boarder Payments.

Medical Programs

For contributions from noncertified household members, advisors must follow the policy explained in A-1326.1, Cash Gifts and Contributions, for Medical Programs.

 

 

A—1326.1.2 Gifts from Tax-Exempt Organizations

Revision 15-4; Effective October 1, 2015

TANF and SNAP

Gifts from tax-exempt organizations are exempt if the gift is for a child with a life-threatening condition and the amount of the gift is:

  • less than $2,000 annually, and
  • not converted to cash.

If the gift is converted into cash or exceeds $2,000 a year, the conversion or the excess counts as unearned income in the month of receipt and is exempt as a resource in the months that follow.

Medical Programs

See A-1326.1, Cash Gifts and Contributions, for Medical Programs.

 

 

A—1326.2 Child Support

Revision 15-4; Effective October 1, 2015

TANF and SNAP

Payments obtained on behalf of a child count as unearned income. See A-1326.2.1, Counting Child Support, for when to count for Temporary Assistance for Needy Families. Payments are considered 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.

Child support collections distributed through the Texas OAG may be received through warrants, direct deposits or the Texas Debit Card. Refer to A-1326.2.1 for the various methods and availability.

Child support payments may be received by a person in Texas through another state’s Office of Attorney General. Several other states use debit accounts for the distribution of child support payments.

Note: If DFPS is the payee and the child receives Foster Care Medicaid:

  • With Cash, child support is exempt.
  • No Cash, the child support income is counted.

Advisors must contact DFPS child support representatives to verify the amount of child support and dates of disbursements because DFPS may not forward the total legally obligated amount. OAG inquiries are not used in this situation. 

See A-1326.15, Income Legally Obligated to Children in Department of Family and Protective Services (DFPS) Conservatorship, for further information on foster care types of assistance.

Advisors must consider the following in determining child support:

  • Gifts or donations as contributions are not considered child support. Gifts are items or money that only benefit the child for a specific purpose, such as a birthday present. These gifts or donations include (but are not limited to) clothes, toys, or personal items, or money to purchase clothes, toys, or personal items.
  • Ongoing child support income is considered as income to the children, even if someone else living in the home receives it.
  • Child support arrears is considered as unearned income to the caretaker.

If an absent parent is making child support payments but moves back into the home of the caretaker and child, the child support is not counted. The earnings and/or other income count as a regular household member.

If a caretaker receives current child support for a nonmember (or a member who is no longer in the home) but uses the money for personal or household needs, the amount counts as unearned income. The amount actually used for or provided to the nonmember for whom it is intended to cover is not counted.

If a single payment covers two or more children (including at least one who is not an applicant/recipient) and the support order does not specify a portion for each child, the payment is prorated among all of the children. When two or more children receive child support from the same father and one child receives Supplemental Security Income, the payment is always prorated.

Medical Programs

Child support is exempt.

 

 

A—1326.2.1 Counting Child Support

Revision 15-4; Effective October 1, 2015

TANF and SNAP

For child support payments issued via … funds are …
warrants, mailed from Austin, Texas, the day after the disbursement date listed on the Texas Child Support Enforcement System (TXCSES) inquiry system. When determining availability, consider the distance the payment has to travel through the mail.
direct deposit/electronic transfers, available two business days after the disbursement date listed on the TXCSES Web inquiry system.
Texas debit cards, available two business days after the disbursement date listed on the TXCSES Web inquiry system.

Related Policy

How to Project Income, A-1355
Debit Accounts, A-1231.2

TANF

Applicants are not required to remit any child support received before the certification date. At application and prior to certification, the following procedures may be used to determine the countable child support to budget.

When determining … count …
eligibility, all child support already received and/or expected to be received each month, less the $75 disregard. If the countable child support plus other countable income is less than the TANF recognizable needs, proceed to determining the benefit amount.
benefits, child support received from the beginning of the month through the date of certification, less the $75 disregard.

Exception: For One-Time TANF, issue the full grant.

Note: If the applicant refuses to remit the child support after signing Form H1073, Personal Responsibility Agreement, prior to certification, a child support penalty is applied.

TANF recipients should be instructed to remit all child support received after the certification date to the OAG. See A-1124, TANF, for instructions on remitting child support payments to the state. Child support payments remitted to the OAG as required are not counted.

Child support received after certification is counted if the:

  • individual receives an excess payment from the OAG; or
  • legal parent keeps payments received directly from the absent parent instead of remitting them to the state.

A sanction is imposed for noncooperation. Child support payments are counted, less the $75 disregard deduction. The advisor must process a claim for any overissuance.

SNAP

Child support counts as unearned income. If a TANF individual remits child support to the state, only the portion the OAG sends to the individual is counted.

Computer Action on Disregard Payment

The OAG sends HHSC a monthly computer tape for all TANF individuals receiving OAG child support payments that month. Each month, the Texas Integrated Eligibility Redesign System (TIERS):

  • updates the child support payment history file on SNAP data inquiry; and
  • rebudgets any associated SNAP EDG not correctly budgeted. This rebudgeting results in an automated Form TF0001, Notice of Case Action, if rebudgeting results in adverse action.

TANF-State Program

Full child support payments are counted, less the $75 disregard deduction.

 

 

A—1326.2.2 Lump-Sum Child Support Payments

Revision 15-4; Effective October 1, 2015

TANF and SNAP

Lump-sum child support payments received or anticipated to be received more often than once a year count as unearned income in the month received. Lump-sum child support payments received once a year or less frequently count as a resource in the month received. See A-1242, Lump-Sum Payments.

Lump-sum payments on child support arrears are received from the following sources:

  • IRS intercept program — This occurs when the IRS intercepts the absent parent's tax refund to pay child support arrears.
  • Excess payment — When the OAG sends a second excess payment to the individual, the advisor receives Form H1719, Notice of Excess Payment, with the date and the amount. See the glossary for more information.
  • OAG adjustments — The advisor receives a PBS-OAGF1 Report, Clients Receiving a Lump Sum Adjustment from OAG-Possible Ineligibility. HHSC produces this report when the OAG makes adjustments to an EDG that result in a lump-sum amount being distributed to the individual. Adjustments may occur when federal distribution changes are implemented, court orders are modified, or EDG errors are corrected.

Lump-sum payments on current child support are received from the following sources:

  • Advance pay — Advance pay occurs when the absent parent is current on obligated amounts and voluntarily pays an amount in advance of the obligated monthly amount. Example: The absent parent is obligated to pay $200 a month and is current on that amount. The absent parent loses his job and receives a severance payment of $2,000 and decides to pay $1,000 in advance to cover child support for the next five months. The payment to the individual counts as a resource in the month received.
  • Future pay — Future pay occurs when the absent parent is current on obligated amounts and voluntarily and routinely pays an extra amount over the obligated amount. Example: The absent parent is obligated to pay $200 a month and is current on that amount. The absent parent pays $25 extra each month (or some months). The OAG releases the money as received. This payment counts as unearned income if the advisor can anticipate that it will be received more often than once a year.

Related Policy

Calculating Household Income, A-1350
TXCSES Menu Screens, C-832.2

 

 

A—1326.2.3 Medical Support Payments

Revision 15-4; Effective October 1, 2015

All Programs

When a court order is entered, it designates the amount of child support and/or medical support a parent receives on behalf of the children. Medical support is in the form of:

  • health insurance, ordered in addition to child support; or
  • a cash amount for the purpose of offsetting medical expenses.

TANF and SNAP

If the individual does not receive Medicaid and is responsible for paying medical expenses, the payments are considered a reimbursement and the policy for reimbursement in A-1332, Reimbursements, applies.

Cash medical support payments the individual receives and remits to Third Party Recovery (TPR) are not counted. Any of the cash medical support payment from the absent parent that the individual continues to keep counts as income.

Related Policy

Remitting Cash Medical Support Payments to the Third-Party Resources (TPR) Unit, A-861.5
TANF, A-1124
Reimbursements, A-1332

Medical Programs

Medical support payments are exempt.

If the individual has an open child support case with the OAG for children receiving Medicaid, the OAG processes medical support payments through an interface with HHSC/TPR, and the individual does not receive a direct payment. If an individual is not referred to the OAG for services and is receiving or begins receiving cash medical support payments, the individual is required to remit the payments to the TPR unit.

 

 

A—1326.3 Energy Assistance

Revision 15-4; Effective October 1, 2015

All Programs

Energy or utility payments and supplements are paid to or on behalf of the TANF, SNAP, and Medical Programs households from various governmental and private sources. The assistance may be in the form of cash, vendor, in-kind, and two-party check payments.

The chart below indicates when to exempt or count energy/utility assistance as TANF, SNAP, and Medical Programs income. Note: If an energy assistance payment is combined with other payments, only the energy assistance portion is exempt from income (if applicable).

Source Type Payment TANF SNAP Medical Programs
Federally-funded, state, or locally administered programs including CEAP, weatherization, Energy Crisis, and one-time payments for emergency repairs of a heating or cooling device (down payment and final payment)
  • Vendor
  • In-kind
  • Two-party check
  • Cash
Exempt Exempt Exempt
Energy assistance received through HUD, U.S. Department of Agriculture’s Rural Housing Service (RHS) or Farmer's Home Administration (FmHA)
  • Vendor
  • In-kind
  • Two-party check
  • Cash
Exempt Exempt Exempt
State or local government-funded utility supplement or energy assistance payments (not federally-funded)
  • Vendor
  • In-kind
  • Two-party check
Exempt Exempt Exempt
State or local government-funded utility supplement or energy assistance payments (not federally-funded) State or local government-funded utility supplement or energy assistance payments (not federally-funded)
  • Cash
Exempt Count Exempt
Private nonprofit organization
  • Vendor
  • In-kind
  • Two-party check
Exempt Exempt Exempt
Private nonprofit organization 
  • Cash
Count per A-1326.1, Cash Gifts and Contributions Count per A-1326.1 Exempt
State or federal regulated utility company, a municipal utility company, or a supplier of home heating oil or gas
  • Vendor
  • In-kind
  • Two-party check
Exempt Exempt Exempt
State or federal regulated utility company, a municipal utility company, or a supplier of home heating oil or gas
  • Cash
Exempt Count Exempt

 

 

A—1326.4 Foster Care and Permanency Care Assistance (PCA) Payments

Revision 15-4; Effective October 1, 2015

TANF and Medical Programs

Foster care or permanency care payments are exempt.

TANF

Do not include a person receiving foster care or permanency care payments in a TANF budget or certified group.

SNAP

If a foster parent or caregiver chooses to exclude a foster/PCA child/adult from the certified group:

  • the foster care/PCA income for the foster/PCA child/adult who is excluded from the certified group is exempt; and
  • all other income received by the excluded foster/PCA child/adult is exempt.

If a foster parent or caregiver chooses to include a foster/PCA child/adult in the certified group:

  • the foster care/PCA income counts as unearned income for the foster/PCA child/adult;
  • any other non-exempt income received by the foster/PCA child/adult is counted; and
  • the foster care/PCA income under the foster/PCA child's/adult's name is budgeted for whom the payment is intended.

Related Policy

Who Is Not Included, A-222, No. 8

 

 

A—1326.5 In-Kind Income

Revision 15-4; Effective October 1, 2015

All Programs

In-kind income is exempt.

 

 

A—1326.6 Interest

Revision 17-1; Effective January 1, 2017

All Programs

Interest counts as unearned income unless specifically excluded.

Note: “Note interest” is one type of interest that is also counted as unearned income.

 

 

A—1326.7 Loans (Noneducational)

Revision 15-4; Effective October 1, 2015

All Programs

Financial assistance is considered a loan if:

  • there is an understanding that the individual will repay the money; and
  • the individual can reasonably explain how the loan will be repaid.

These loans are exempt from income. Contributions that are not considered loans must be considered as explained in A-1326.1, Cash Gifts and Contributions.

Note: See A-1234, Noneducational Loans, for policy on treating loans as a resource.

 

 

A—1326.8 Plan for Achieving Self-Sufficiency (PASS)

Revision 15-4; Effective October 1, 2015

All Programs

Any amount an SSI recipient deposits into a PASS account or uses toward completion of a PASS plan is exempt.

Note: If the PASS contribution is made from earned income, the advisor should enter the PASS income in the Employer – Employee Screen – Amount Totals – PASS Income. TIERS will deduct the PASS contribution from the gross earnings.

A PASS can be, but is not limited to, money that is:

  • deposited into a savings account to purchase a vehicle for employment transportation;
  • deposited into a savings account to start a new business; or
  • used toward an educational program.

The PASS plan must be approved by the Social Security Administration.

The SSI recipient will receive a notice from SSA approving or disapproving the PASS plan. Advisors may use this notice as verification of the PASS plan.

Related Policy

Individual Development Accounts (IDAs), A-1231.3

 

 

A—1326.9 Pensions

Revision 15-4; Effective October 1, 2015

All Programs

A pension is any benefit derived from former employment (such as retirement benefits or a disability pension). A pension counts as unearned income.

 

 

A—1326.10 Trust Funds

Revision 15-4; Effective October 1, 2015

All Programs

Withdrawals or dividends that the household can receive from a trust fund (also referred to as trust payments) count as unearned income.

Related Policy

Trust Funds, A-1237

 

 

A—1326.11 Resettlement-Reception and Placement (R&P)

Revision 15-4; Effective October 1, 2015

All Programs

R&P payments are exempt.

 

 

A—1326.12 Refugee Cash Assistance (RCA)

Revision 15-4; Effective October 1, 2015

TANF

Individuals can receive RCA only if they are not eligible for TANF.

SNAP

RCA counts as income in the month received.

Medical Programs

RCA income is exempt.

 

 

A—1326.13 Match Grant

Revision 15-4; Effective October 1, 2015

TANF

Individuals can receive Match Grant only if they are not eligible for TANF.

SNAP

Follow the policy in A-1326.1, Cash Gifts and Contributions.

Medical Programs

Match Grant is exempt.

 

 

A—1326.14 Spousal Diversion and Dependent Allowance

Revision 15-4; Effective October 1, 2015

TANF and SNAP

The portion of income from a spouse or parent in a nursing facility that is diverted to the family members living in the community counts as unearned income.

The spousal diversion and dependent allowance are determined by the Medicaid for the Elderly and People with Disabilities worker processing the application for nursing facility coverage. When nursing facility coverage is approved and disposed, TIERS will add this income in the community family member's approved Texas Works (TW) EDGs upon running Eligibility. Advisors do not make Data Collection entries for this income.

Medical Programs

Spousal diversion payments are exempt.

 

 

A—1326.15 Income Legally Obligated to Children in Department of Family and Protective Services (DFPS) Conservatorship

Revision 15-4; Effective October 1, 2015

All Programs

DFPS has systems in place to become a payee for legally obligated income the child received prior to DFPS taking conservatorship. This income may include (but is not limited to) child support, RSDI and SSI.

Foster care (FC) types of assistance (TOA) are identified in TIERS Inquiry as:

  • Foster Care – Federal Match – With Cash,
  • Foster Care – No Federal Match – With Cash,
  • Foster Care – No Federal Match – No Cash, and
  • Foster Care – Federal Match – No Cash.

Federal Match identifies Medicaid paid by matched funds from the federal government. No Federal Match identifies state-paid Medicaid only without matching federal funds. With Cash types of assistance (with or without federal match) indicate that the foster parent receives FC financial assistance for an FC child in addition to FC Medicaid. No Cash indicates the foster parent does not receive an FC financial payment but DFPS provides FC Medicaid only.

When reviewing inquiry systems such as WTPY/SOLQ and OAG, and DFPS is identified as the payee for the legally obligated income:

  • The legally obligated income for an FC child who is receiving FC With Cash is not counted since DFPS keeps the legally obligated income.
  • Legally obligated income for the FC child who receives FC No Cash is counted since DFPS sends the legally obligated income to the foster parent.
  • The legally obligated income is counted when a child is placed back in the home of the individual from whom the child was removed. DFPS remains the conservator of the child receiving FC No Cash, and the legally obligated income is not forwarded. The individual must inform the income source they are now the payee. If DFPS has not already provided the issuing agency this verification, that agency must verify with DFPS before changing the payee.
  • FC and Adoption Assistance (AA) children placed in Texas from another state will receive a TOA No Cash from DFPS in Texas. However, the child may receive an FC or AA payment from the home state. When a child is receiving FC or AA in Texas and is from another state, the advisor must contact the home state to verify any countable legally obligated income.

Examples:

  • A child receives SSI. DFPS removes the child from the custody of her mother. DFPS becomes the payee for the child’s SSI.
  • The child is placed with a foster parent. The child receives FC – Federal Match – With Cash. The foster parent chooses to include the child in the foster parent’s SNAP household. The child is added to the foster parent’s SNAP EDG. Since the child receives an FC payment, DFPS retains the child’s SSI. The FC payment and SSI are not budgeted in the SNAP EDG because the FC payment is exempt income and DFPS keeps the SSI income.
  • Months later, DFPS places the child with her great-aunt. The child now receives FC – Federal Match – No Cash. The child’s great-aunt chooses to include the child in the great-aunt’s SNAP household. The child is removed from the former foster parent’s EDG and is added to her great-aunt’s EDG and SNAP EDG. DFPS remains the payee for the child’s SSI but sends it to her great-aunt. The SSI must be counted in the SNAP budget.
  • Several months later, DFPS places the child back with her mother; however, DFPS retains conservatorship. The child continues to receive FC – Federal Match – No Cash. DFPS informs the SSA that the child now resides with her mother. The child’s mother must inform SSA to have the child’s SSI sent to her. The SSI must be counted in the SNAP budget.

Note: DFPS does not become the payee for children who receive adoption assistance.

 

 

A—1326.16 Reserved for Future Use

Revision 21-1; Effective January 1, 2021

 

 

A—1326.17 Alimony (Spousal Support) Received

Revision 21-2; Effective April 1, 2021

All Programs

Alimony payments, also referred to as spousal support, are payments received from a spouse or former spouse under a divorce or separation agreement. 

SNAP and TANF

Count alimony received as unearned income for the person receiving the payment.

Medical Programs

If the divorce or separation agreements that include alimony payments were executed or last modified:

  • on or before Dec. 31, 2018, count alimony received as unearned income for the person receiving the payment.
  • after Dec. 31, 2018, do not count alimony received in the household’s budget.

 

 

A—1326.18 Annuity

Revision 15-4; Effective October 1, 2015

All Programs

An annuity is a series of payments paid under a contract and made at regular intervals over a period of more than one full year. Payments can be either fixed (under which one receives a definite amount) or variable (not fixed). An individual can buy the contract alone or with the help of an employer.

Annuity payments are counted as unearned income.

 

 

A—1326.19 Capital Gains

Revision 15-4; Effective October 1, 2015

Capital gains are profit from the sale of property or of an investment when the sale price is higher than the initial purchase price (for example, profits from the sale of stocks, bonds, or from the sale of real estate).

TANF and SNAP

Capital gains are exempt.

Medical Programs

Capital gains are counted as unearned income.

 

 

A—1326.20 Housing Allowance

Revision 17-4; Effective October 1, 2017

SNAP and TANF

Follow policy in A-1323.3, Military Pay Allotments and Allowances, or A-1324.4, Government Housing Assistance, for specific types of housing allowances. Housing allowances not addressed in A-1323.3 or A-1324.4 are counted as unearned income.

Medical Programs

Follow policy in A-1323.3, Military Pay Allotments and Allowances, or A-1324.4, Government Housing Assistance, for specific types of housing allowances.  
Housing allowances provided as compensation for ordained, commissioned or licensed members of the clergy are excluded from MAGI budgeting if:

  • the employing church or organization officially designates the payment as a housing allowance before it makes the payment;
  • the total amount of the allowance does not exceed the total cost of renting or purchasing the home, including furnishings and utilities; and
  • the amount of the allowance does not exceed the value of the services the individual provides as a member of the clergy. If the housing allowance exceeds the housing costs or value of services provided, count the excess amount as earned income.   

Housing allowances not addressed in A-1323.3, A-1324.4, or considered a housing allowance for a clergy member are counted as unearned income.

 

 

A—1326.21 Life Estate

Revision 15-4; Effective October 1, 2015

All Programs

Life estate income is income an individual receives from ownership of property that an individual only possesses ownership of for the duration of one’s life (for example, rental income).

Life estate income is counted as unearned income.

 

 

A—1326.22 Jury Duty Pay

Revision 15-4; Effective October 1, 2015

Jury duty pay is taxable income received from jury duty as compensation.

TANF and SNAP

Jury duty pay is exempt.

Medical Programs

Jury duty pay is counted as unearned income.

 

 

A—1326.23 Court Awards

Revision 15-4; Effective October 1, 2015

Court awards are taxable money that an individual receives as the result of a lawsuit (for example, compensation for lost wages or punitive damages awards).

TANF and SNAP

Follow policy in A-1331, Lump-Sum Payments.

Medical Programs

Court awards income is counted as unearned income.

 

 

A—1326.24 Canceled Debt

Revision 15-4; Effective October 1, 2015

Canceled debts are debts that have been canceled, forgiven, or discharged, and the canceled amount is included as countable income on federal income tax returns (for example, loan foreclosures or canceled credit card debt).

TANF and SNAP

Canceled debt income is exempt.

Medical Programs

Canceled debt income is counted as unearned income.

 

 

A—1326.25 Achieving a Better Life Experience (ABLE) Accounts

Revision 17-1; Effective January 1, 2017

Achieving a Better Life Experience (ABLE) programs allow individuals (beneficiaries) who become blind or disabled before age 26 to establish tax-free savings accounts for the designated beneficiary's disability-related expenses.

All Programs

Contributions to an ABLE account from individuals other than the designated beneficiary, and any distributions from an ABLE account, are not considered income to the designated beneficiary.

Income of the designated beneficiary, or an individual whose income is considered when determining eligibility, that is deposited into an ABLE account, remains countable income when determining eligibility.

TANF and SNAP

Interest and dividends earned on an ABLE account are exempt.

Medical Programs

Interest and dividends earned on an ABLE account are countable as unearned income.

Related Policy

Achieving a Better Life Experience (ABLE) Accounts; A-1231.6

 

 

A—1326.26 School-Based Savings Accounts

Revision 17-1; Effective January 1, 2017

School-Based Savings Accounts are accounts set up by students or their parents at financial institutions that partner with school districts. The accounts are intended to help students save for higher education.

TANF and SNAP

Interest earned on School-Based Savings Accounts is exempt.

Medical Programs

Interest earned on School-Based Savings Accounts is countable as unearned income.

Related Policy

School-Based Savings Accounts, A-1231.7

 

 

A—1326.27 MyGoals Payments

Revision 18-1; Effective January 1, 2018

MyGoals payments are cash payments received by participants in the MyGoals for Employment Success demonstration project. The demonstration studies the impact of combining workforce development and financial payments on employment outcomes for recipients of the Housing and Urban Development, Section 8 Rental Assistance. Only residents within the jurisdiction of the Houston Housing Authority are selected to participate in the project. 

All Programs

MyGoals payments are counted as cash contributions made by a private, nonprofit organization according to policy in A-1326.1, Cash Gifts and Contributions.

 

 

A—1326.28 Texas Lottery Commission

Revision 18-2; Effective April 1, 2018

All Programs

Count the gross amount of winnings as unearned income in the month received, regardless of the frequency of pay. The Data Broker information includes debt offset (recoupment) information.

Example: Applicant wins $1,000/month; however, there is a debt offset (recoupment) of $100 from the OAG for child support. The income budgeted will be $1,000.

Note: Some winners may elect to place their winnings in a trust fund.

Related Policy

Trust Funds, A-1326.10
Trust Funds, A-1237
Payments Exempt as a Resource While Being Considered Income, A-1243
Texas Lottery Commission, C-825.18