A-1340, Income Limits

Body

Revision 08-1; Effective January 1, 2008

 

A—1341 Income Limits and Eligibility Tests

Revision 21-3; Effective July 1, 2021

TANF

There are two eligibility tests for TANF.

Budgetary Needs Test

The budgetary needs test is the first eligibility test for the household. It applies to all households who have not received TANF in the last four months (in Texas or another state).

If an unmet need of less than 50 cents remains, the household is ineligible.

Recognizable Needs Test

The recognizable needs test is the final eligibility test for the household. This test applies to all applicants and certified households.

The recognizable needs test has two parts. Applicant households (those subject to the budgetary needs test) must pass both Part A and Part B. All other households must pass only Part B.

If an unmet need of one cent or more remains, the household is eligible.

Needs Tests Instructions

Include all countable earned and unearned income. Follow the steps below:

  1. Total the gross earned and unearned income for each person.
  2. Add applied income amount. Applied income is the countable amount of income after allowing deductions for tax dependents, child support, alimony, and people a legal parent is legally obligated to support.
  3. Subtract the child support disregard, if applicable.
  4. Subtract the standard work-related expense (not to exceed the household member's monthly earned income) for each qualifying member with countable earnings.
  5. Subtract each member's allowable costs for dependent care (up to the maximum).
  6. Subtract any child support expense.
  7. Compare the net income to the budgetary needs amount. If the net income or unmet need is 50 cents or more, the household passes the budgetary needs test.

Note: If there is a diversion amount and someone other than the person with diversions has count income (or two household members with joint diversions both have countable income), each member's income or earned income deductions are computed separately until the actual amount allowed to be diverted from each person's income is subtracted. Then the total net incomes are combined.

When two members have joint diversions, any amount of the diversion that exceeds one member's income can be diverted from the other member's income using the steps below:

  1. Subtract 1/3 of the net income for applicants with earned income who have not been active TANF in the last four months.
  2. Subtract 90 percent of the remaining earnings (up to a cap of $1,400). Allow this deduction for each employed household member who is eligible for it. The person can receive this deduction for four months in a 12-month period. The four months do not have to be consecutive. Note: Do not count a month in which a full-family sanction is imposed as one of the 90 percent earned income deduction (EID) months.

Note: If there is a diversion amount and someone other than the person with diversions has countable income (or two members with joint diversions both have countable income), each member's income and earned income deductions are computed separately until after subtracting the actual amount allowed to be diverted from each person's income. Then the adjusted gross incomes are combined.

When two members have joint diversions, any amount of the diversion that exceeds one member's income can then be diverted from the other member's income.

For each household member with earnings, the deductions cannot exceed the person's total income. This also applies when there is more than one household member with earnings, diverted income or both.

The adjusted income should be compared to the recognizable needs amount. If the adjusted income is one cent or more, the household passes the recognizable needs test.

The adjusted income is subtracted from the maximum grant amount to determine the benefit amount.

Related Policy

Child Support Deductions, A-1421
$75 Disregard Deduction, A-1422
Dependent Care Deduction, A-1423
Diversions, Alimony, and Payments to Dependents Outside the Home, A-1424
Work-Related Expense ($120 and 20%), A-1425.1
1/3 Disregard for Applicants, A-1425.2
90% Earned Income Deduction, A-1425.3
Income Limits, C-111

SNAP

There are two eligibility tests for SNAP.

Gross Income Test

Gross income is the total countable income. This test applies to all households except those:

  • with a member who is elderly or has a disability; or
  • that are categorically eligible.

To be considered categorically eligible, all household members must be approved for TANF or SSI, or a combination of TANF and SSI, or the household must meet resource criteria and have gross income below or equal to 165 percent Federal Poverty Level (FPL) for its size.

A household subject to the gross income test is ineligible if unrounded gross income exceeds the limit by one cent or more.

Note: For households with a deductible farm loss, the loss is subtracted before applying the gross income test.

Related Policy

Households with Elderly Members or Members with a Disability, B-430

Net Income Test

Net income is the gross income minus allowable deductions. This test applies to all households, except categorically eligible households.

Note: The net income test applies to a household with a member who is elderly or has a disability if the household’s gross income exceeds 165 percent FPL and the household does not meet categorically eligible requirements.

If a household's rounded income exceeds the net income limits, the household is ineligible. Fifty cents or more is rounded up and 49 cents or less is rounded down. The EDG is denied if net income results in zero allotment for the initial and ongoing months.

TIERS will assign the appropriate income test at Eligibility Summary after running Eligibility Determination Benefit Calculation (EDBC).

Related Policy

Benefits, A-2322
Maximum Income Limits, C-121

Medical Programs

For Medical Programs, Modified Adjusted Gross Income (MAGI) financial eligibility is determined by comparing the applicable program income limit and the MAGI household income calculated using Step 1 through Step 5 below.

Follow the five steps below in the specified order for each person applying for benefits to determine MAGI financial eligibility for each person.

Step 1 — Determine MAGI Household Composition

The MAGI household composition for the person will be used to complete Steps 2, 3, 4, and 5. 

Step 2 — Determine MAGI Individual Income

Identify and list all income, expenses, and overpayments for each person in the MAGI household.

Form H1042, Modified Adjusted Gross Income (MAGI) Worksheet: Medicaid and CHIP, is used for each person included in the person’s MAGI household composition to list and calculate:

  • earned income, excluding any pretax contributions;
  • unearned income;
  • self-employment income;
  • American Indian/Alaska Natives (AI/AN) disbursement;
  • overpayments; and
  • expenses.

Step 3 — Determine Whether Any Exemptions Apply to MAGI Household Income

If a person meets one of the following exceptions for the taxable year in which Medicaid or Children’s Health Insurance Program (CHIP) eligibility is requested, their MAGI individual income is not included when calculating MAGI household income (as explained in Step 4).

Exception 1:

A person is a child (natural, adopted or step), regardless of age, who is:

  • included in the MAGI household composition of a parent or whose MAGI household composition includes a parent; and
  • not expected to be required to file a federal income tax return since the child’s monthly income is below the monthly Internal Revenue Service (IRS) income threshold.

Exception 2:

A person is a tax dependent who is:

  • included in the MAGI household composition of the taxpayer claiming them as a tax dependent; and
  • not expected to be required to file a federal income tax return since the tax dependent’s monthly income is below the monthly IRS income threshold.

If a person meets the criteria for Exception 1 or 2 and does not have any income, it is not necessary to determine whether the person is expected to be required to file an income tax return because there is no income to compare with the IRS income threshold. Move to Step 4 at this point.

Note: Even if a person’s tax status is “non-taxpayer/non-tax dependent,” the person may be “expected to be required to file” a federal income tax return based on the IRS threshold amounts.

For a person who is expected to be required to file a federal income tax return, all MAGI Individual Income from Step 2 counts in every household composition in which that person is included.

If a child meets Exception 1:

  • their income is excluded from the MAGI household income of every applicant or recipient whose MAGI household composition includes that child; and
  • the child’s income is exempt from their own MAGI household income.

If a tax dependent meets Exception 2:

  • the tax dependent’s income is excluded from the MAGI household income of the taxpayer who plans to claim that person on a federal income tax return for the taxable year in which the taxpayer is requesting Medicaid or CHIP eligibility; and
  • this tax dependent’s MAGI Individual Income counts in their own MAGI household income and counts in the MAGI household income of everyone else in whose MAGI household they are included.

If a person meets the criteria for both exceptions (a child (regardless of age) included in the MAGI household composition of a parent and a tax dependent included in the MAGI household composition of the taxpayer), Exception 1 applies. Exception 1 is more beneficial for the child because the child’s income would then be exempt from the child’s MAGI Individual Income.

Example: A child (regardless of age) lives with her mother, has no income, and her mother expects to claim the child on her federal income tax return. The child would meet Exception 1 and Exception 2. For the purposes of exempting the child’s income, the child (regardless of age) is considered a child who is included in the MAGI household composition of a parent whose MAGI group includes a parent (Exception 1). Because the child has no income to exempt, there is no need to compare her income to the tax thresholds. If the child did have income under the threshold, it would be more beneficial to allow her Exception 1 so that her income would not be counted on her own MAGI household income.

Example: Grandma Mary and Grandpa John expect to file taxes jointly and claim their three grandchildren, Sally, 8, Lucy, 12 and Mike, 14, as tax dependents. Grandma Mary and Grandpa John have not adopted their grandchildren. Grandma Mary applies for medical assistance for her grandchildren but does not apply for medical assistance for herself or Grandpa John.

Sally, Lucy, and Mike each receive $1500 a month in Social Security survivor benefits (SSB). The children meet a tax dependent exception because they are claimed as a tax dependent by a taxpayer who is not their spouse or parent. Their MAGI household compositions are determined using the non-taxpayer and non-tax dependent rules.

The MAGI household for each child includes the three siblings (Sally, Lucy and Mike) and the survivor benefits count in each child’s own MAGI household income and in the MAGI household income of their siblings. If Grandma Mary and Grandpa John had applied for medical assistance, the children’s survivor benefits would NOT count in their MAGI household income.

Step 4 — Calculate MAGI Household Income

First, the MAGI Individual Income for each person included in the applicant’s or recipient’s MAGI household composition is calculated by:

  • adding earned income, unearned income, self-employment income, and AI/AN disbursements (if AI/AN status is not verified per policy or the income source is not verified);
  • subtracting overpayments; and
  • subtracting expenses.

 

Person 1

Person 2

Person 3

Person 4

Total earned/unearned income

 

 

 

 

Add

+

+

+

+

Total self-employment Income

 

 

 

 

Add

+

+

+

+

Total AI/AN disbursement

 

 

 

 

Subtract

-

-

-

-

Total recoupment of overpayments

 

 

 

 

Subtract 

-

-

-

-

Total expenses

 

 

 

 

Equals  

=

=

=

=

MAGI Individual Income

 

 

 

 

Second, the MAGI Individual Income for all people included in the applicant’s or recipient’s MAGI household composition must be totaled. Anyone’s income (as applicable) based on Exceptions 1 and 2 from Step 3 is exempt.

Add MAGI Individual Income   +   +   + =

Third, the standard MAGI income disregard, by MAGI household size, must be subtracted from the sum of the MAGI Individual Incomes to get the MAGI household income. The standard MAGI disregard is an income disregard equal to five percentage points of the FPL. It is a standard amount based on the applicable household size across all Medical Programs that use MAGI rules to determine income.

Sum of MAGI Individual Incomes

 

Subtract

-

Standard MAGI Disregard

 

Equals

=

MAGI Household Income

 

Note: The standard MAGI income disregard is updated annually based on the annual updates to the FPL.

Step 5 — Determine MAGI Financial Eligibility

The person’s eligibility is determined by comparing whether the applicant’s or recipient’s MAGI household income is less than or equal to the income limit of the applicable program based on FPL and MAGI household size.

Steps 1 to 5 must be repeated for each person applying for Medical Programs.

Related Policy

Medical Programs, A-240
Who Is Included, A-241.1
Verification Requirements, A-1370
Income Limits, C-131
Standard MAGI Income Disregard, C-131.4
IRS Monthly Income Thresholds, C-131.5
Guidelines for Providing Retroactive Coverage for Children and Medical Programs, C-1114

 

 

A—1341.1 Grant Amount

Revision 15-4; Effective October 1, 2015

TANF

The TANF grant amount is the amount of the monthly benefit. The TANF grant is approximately 17 percent FPIL. The federal government periodically adjusts the FPIL.

After the household passes the recognizable needs test, the recommended grant amount is calculated. The advisor subtracts the household's adjusted gross income (rounded down to the nearest dollar) from the maximum grant amount allowed for the household's size and composition. See C-111, Income Limits.

The minimum grant amount is $10. The household is eligible to receive the minimum grant if the recommended grant amount is less than $10.

Benefits of less than $10 are issued only for:

  • supplemental payments; and
  • payments made after processing a recoupment.