Section 210-RICR-40-00-3.4 - Factors Considered in the Treatment of Income3.4.1Scope and PurposeA. When calculating countable income using the SSI methodology, certain disregards and exclusions apply: some only to earned income, others only to unearned income, and a few apply to both earned and unearned income. The availability of income also affects whether it is counted. This Section focuses on these and any other factors considered in the treatment of income for Medicaid eligibility purposes across populations. The specific Rules for how they apply when determining income eligibility for Community Medicaid are located in Subchapter 05 Part 1 of this Chapter; for Medicaid LTSS, all special provisions that apply are located in Part 50-00-6 of this Title.3.4.2Both Earned and Unearned Income Disregards and ExclusionsA. The following disregards and exclusions apply to both earned and unearned income: 1. Infrequent/Irregular Income Disregards - Income is considered to be infrequent if received only once during a calendar quarter from a single source. Income is considered to be received irregularly if a person is not expected to receive such income on a routine basis. Treatment of irregular and infrequent income is as follows: a. Disregarded. Amounts less than thirty dollars ($30.00) per calendar quarter of earned income and sixty dollars ($60.00) per calendar quarter of unearned income is disregarded.b. Countable. If the amount of irregular/infrequent income is above the amount allowed to be disregarded, all of the income is countable.c. A "calendar quarter" is defined in Part 1 of this Subchapter.2. Twenty dollars ($20.00)/Month General Income Disregard - The first (1st) twenty dollars ($20.00) per month of unearned income is disregarded. For the disregard to apply to unearned income, the income must NOT be a benefit of a government funded program in which a person's income was a factor in determining eligibility. The disregard is applied as follows: a. Order. The twenty dollars ($20.00) disregard is applied to earned income only if it cannot be applied to unearned income.b. Limits. The dollar amount of the disregard is not increased when an applicant and NAPP spouse who are living together both have income. A couple, in which both spouses are Medicaid applicants or beneficiaries, receives one (1) twenty dollar ($20.00) exclusion per month.3. PASS Disregard - Income, whether earned or unearned, of a person who is blind or living with a disabling impairment may be excluded if such income is needed to fulfill a Plan for Achieving Self-Support (PASS). This exclusion does not apply to applicants who are blind or a person with disabilities who is age sixty-five (65) or older, unless the applicant was receiving an SSI or SSP related to blindness before reaching that age. For additional information on the PASS, see the Federal SSI Regulations at 20 C.F.R. §§ 416.1180 through 416.1182 (2023).4. Federally Mandated Exclusions - Certain Federal laws other than the U.S. Social Security Act exclude various types of earned and/or unearned income from the calculation of countable income in the financial eligibility process. A list of these exclusions is located in § 3.4 of this Part and is updated on a periodic basis.3.4.3Earned Income Disregards and ExclusionsA. Deductions to earned income as a result of disregards and exclusions are applied in accordance with certain rules. First, earned income is never reduced below zero (0) as a result of applying disregards and exclusions. Second, any unused earned income disregard or exclusion is never applied to unearned income. Last, any unused portion of a monthly exclusion cannot be carried over for use in subsequent months. Within these Rules, disregards and exclusions are applied as follows:1. Sixty-five dollars ($65.00) and one half (1/2) Earned Income Disregard - If the applicant or non-applicant spouse is employed, earned income of sixty-five dollars ($65.00)/month plus one half (1/2) of the balance is disregarded. When both eligible spouses are employed, income is combined and then the disregard is applied.2. AmeriCorps - Payments made to participants in AmeriCorps State and National and AmeriCorps National Civilian Community Corps (NCCC) are disregarded. These payments may be made in cash or in-kind and may be made directly to the AmeriCorps participant or on the AmeriCorps participant's behalf. These payments include, but are not limited to: living allowance payments, stipends, educational awards, and payments in lieu of educational awards.3. Child Care Tax Credit - The child care tax credit is given to taxpayers at the end of the tax year for each dependent child who is under the age of seventeen (17). The credit is disregarded as earned income as it reduces the taxpayer's liability on a dollar-for-dollar basis.4. Earned Income Tax Credit/Refund - The Earned Income Tax Credit (EITC) is not counted. The EITC is a special tax credit for certain low income working taxpayers. This tax credit may be provided as refund through the Federal Internal Revenue Service under the Internal Revenue Code (IRC), 26 U.S.C. § 32, or as an advance payment from an employer under 26 U.S.C. § 3507. The EITC may or may not result in a payment to the taxpayer.5. Impairment-Related Work Expenses - Earned income used by a person with disabilities to pay impairment-related work expenses is disregarded. For the disregard to apply, the person must be disabled but not blind and under age sixty-five (65) or must have received SSI as a disabled individual (or received disability payments under a former State plan) for the month before reaching age sixty-five (65). In addition, the following must be met:a. The severity of the impairment must require the person to purchase or rent items and services in order to work;b. The expense must be reasonable;c. The expense must be paid in cash (including checks, money orders, credit cards and/or charge cards) by the person and must not be reimbursable from another source, such as Medicare or private insurance; andd. The payment for the expense must be made in a month the person receives earned income and both worked and used the services or the item purchased, or the person must be working and pay the expense before earned income is received.e. Impairment-related work expenses that may qualify for this disregard are described in Federal SSI Regulations at 20 C.F.R. § 416.976 (2023).6. Student Child Earned Income Exclusions (SEIE) - For a student under age twenty-two (22) or a person who is blind or disabled and regularly attending school, a set amount of earned income per month up to a yearly maximum may be excluded. The Federal government determines the monthly and maximum amounts based on variety of factors and adjusts the figures annually to reflect increases in the cost living.7. Work-Related Expenses of Blind Persons - Earned income used to meet any expenses reasonably attributable to the earning of the income by a person who is blind and under age sixty-five (65) or received SSI as a blind person for the month before reaching the age sixty-five (65). Further, expenses may be disregarded if the person has an approved plan for self-support (PASS). The amounts must be reasonable and not exceed the earned income of the blind person or a blind spouse. See references on PASS, including types of expenses that qualify for this disregard in § 3.4.2(A)(3) of this Part.3.4.4Unearned Income Disregards and ExclusionsA. Exclusions on unearned income never reduce unearned income below zero (0). Except for the twenty dollars ($20.00) general unearned income exclusion, no other unused unearned income exclusions may be applied to earned income. SSI methodology uses the following when considering whether an unearned income disregard or exclusion applies:
1. Assistance Based on Need - This is unearned income which is wholly funded by the State or a local subdivision. Assistance based on need is disregarded whether provided in-cash or in-kind as it is provided through programs that use a person's income as factor when determining eligibility for benefits or assistance. Assistance based on need that is not counted as unearned income includes the optional State Supplemental Payment (SSP).2. Burial Funds - Interest earned on the value of excluded burial funds is excluded from income (and resources) if left to accumulate in the burial fund. Interest earned on agreements representing the purchase of an excluded burial space is excluded from income (and resources) but only if left to accumulate. If not left to accumulate - that is, paid directly to the person, spouse or parent - the receipt of the interest may result in countable income.3. Child Support and Arrearage Payments - One third (1/3) of a child support payment made to or for a child by a non-custodial parent is excluded. A parent is considered non-custodial if the parent and the child do not reside in the same household. The other types of these support and arrearage payments that are excluded are: a. Court ordered health care support payments;b. Payments to reimburse the custodial parent for health care expenses; and/orc. Payments received and retained by the DHS child support enforcement unit on behalf of a child enrolled in Rhode Island Works, foster care, or Medicaid LTSS Home and Community Based Services (HCBS), including through the Katie Beckett eligibility option.4. Death Benefits - A death benefit is something received as the result of another's death. a. Proceeds of a life insurance policy received due to the death of the insured;b. Lump sum death benefit from SSA;c. Railroad Retirement burial benefits;e. Inheritances in cash or in-kind;f. Cash or in-kind gifts given by relatives, friends or a community group to "help out" with expenses related to the death.g. Death benefits are excluded for any expenses paid by applicant or beneficiary related to the deceased's last illness and burial. Any benefits above the actual expenses paid are countable. Recurring survivor benefits such as those received under RSDI and private pension programs are not death benefits.5. Disaster Assistance - At the request of a State Governor, the President may declare a major disaster when the disaster is of such severity and magnitude that effective response is beyond the capabilities of the State and local governments, and Federal assistance is needed. Under such circumstances, the value of disaster assistance provided by a government agency or an organization such as the Red Cross is excluded from countable income if the person resided in permanent or temporary housing in the disaster area prior to the date of the Presidential designation.6. Federal Housing Assistance - The U.S. Department of Housing and Urban Development (HUD) and State and local governments and housing authorities provide various forms of assistance that help pay shelter costs. This includes subsidized housing, loans for modifications, mortgage supports and guaranteed loans. Housing assistance is excluded income if payment is made in the form of cash or a voucher and provided under the authority of any of the following, as amended:a. The United States Housing Act of 1937, 42 U.S.C. § 1437;b. The National Housing Act, 12 U.S.C. § 1715;c. § 101 of the Housing and Urban Development Act of 1965, 12 U.S.C.§ 1701s;d. Title V of the Housing Act of 1949, 42 U.S.C. § 1471; ore. § 202(h) of the Housing Act of 1959, 12 U.S.C. § 1701q.7. Food and Nutrition Assistance - Federal and State governments provide food and nutrition assistance via SNAP, national school breakfast and lunch programs, WIC and several other publicly funded programs that serve elders, children and persons with disabilities. Food and nutrition assistance from these program is excluded income.8. Foster Care Payments - In contrast to countable payments made under Title IV-E of the Social Security Act, 42 U.S.C §§ 670-679c, Foster Care payments provided under Title IV-B of the Social Security Act, 42 U.S.C. §§ 621-628b, or Title XX of the Social Security Act, 42 U.S.C. §§ 1397-1397n-13, are social services and are excluded from the foster child's income.9. Gifts - Gifts from an organization which is tax exempt under the IRC to, or for the benefit of, a person under age eighteen (18), who has a lifethreatening condition are excluded up to a maximum of two thousand dollars ($2,000.00) in a calendar year.10. Grants, Scholarships, Fellowship - Grants, scholarships, and fellowships are educational financing instruments funded by private, non-profit agencies, and Federal, State and local governments. Any portion of a grant, scholarship or fellowship used to pay for qualified education expenses (tuition, fees or books, etc.) is not countable income. This exclusion does not apply to any portion set aside or actually used for room and board.11. Home Energy Assistance Payments - Home energy or support and maintenance assistance is excluded if it is based on need and provided inkind by a private nonprofit agency or in cash or in-kind by a supplier of home heating oil or gas, a utility company providing home energy, or a municipal utility providing home energy.12. Refugee Cash Assistance - Refugee cash assistance payments and federally reimbursed general assistance payments to refugees are disregarded under a PASS, but otherwise it is counted. The twenty dollar ($20.00) general income disregard does not apply to this income.13. Relocation Assistance - This form of assistance is provided to people who are displaced by government projects which acquire real property whether under eminent domain or a similar action. Assistance provided in these circumstances is excluded as income.14. Reparation Payments - Reparations associated with the following are excluded from income: a. Reparation payments received from the Federal Republic of Germany;b. Austrian social insurance payments based in whole or in part on wage credits granted under the nationwide class action lawsuit Bondy v. Sullivan (1991) involving the Austrian General Social Insurance Act;c. Restitution payments made by the U.S. Government to Japanese Americans (or if deceased, their survivors) and Aleuts who were interned or relocated during World War II; andd. Agent Orange settlement payments.15. Rhode Island Works Under a PASS - Rhode Island Works payments under a PASS are excluded. However, Rhode Island Works payments unless excluded under a PASS, are countable income. The twenty dollar ($20.00) general income disregard does not apply to this income.16. Student Loans - Federal and State funds or insurance are provided for educational programs at middle school, secondary school, undergraduate and graduate levels under Title IV of the Higher Education Act, 20 U.S.C. §§ 1070-1099d, and student assistant programs of the Bureau of Indian Affairs. Any loan to an undergraduate student for qualified education expenses made and/or insured by the Federal government or the State's higher education financing authority is excluded as both an income and resource.3.4.5Lump Sum Income Disregards and ExclusionsA. Lump sum income is irregularly or infrequently received income. It can be earned or unearned income. Whether lump sum income is countable when determining financial eligibility depends on what is received, how often it is received, and the health care program for which the person is eligible. Examples of lump sum income include:1. Winnings (lottery, gambling), Insurance settlements2. Worker's Compensation Settlements, Inheritances, Retroactive payments of RSDI, VA, and Unemployment Insurance3. General Treatment of Lump Sum Income - For all IHCC groups subject to the SSI methodology, the following are excluded from lump sum income: a. Costs associated with getting the lump sum, such as attorney's fees.b. Any portion of the lump sum earmarked for and used to pay health expenses not covered by Medicaid or another form of insurance.c. Any portion of the lump sum recovered by the EOHHS or its agents.d. Any portion of the lump sum earmarked for and used to pay funeral and burial costs upon the death of a spouse or child.4. RSDI and SSI Payments - When eligibility for RSDI and SSI benefits are first approved, beneficiaries often receive a one (1) time payment that includes retroactive payments back to the date of a disability. These RSDI and SSI payments are lump sums, and are treated somewhat differently depending on the person's Medicaid eligibility pathway: a. SSI/SSP Pathway. Retroactive lump sum payments of SSI and all other lump sum income (including RSDI) of an SSI/SSP recipient are excluded even if the lump sum is a retroactive payment for a period in which the recipient is a Medicaid beneficiary. The only exception is that any portion of a lump sum payment that is designated as a benefit for a dependent of the beneficiary is counted as unearned income to the dependent in the month received.b. Community Medicaid, MPPP, and Medicaid LTSS pathways. (1) Retroactive RSDI lump sum payments are counted as unearned income in the month received. If the beneficiary is not receiving SSI, the RSDI payment is a resource in the following month if retained. RSDI payments are not counted as a resource for nine (9) months once converted from income.(2) Retroactive lump sum payments of SSI are excluded as income and resources in the month received.(3) Any retroactive SSI or RSDI lump sum payment received before March 2, 2004 is excluded as a resource.5. Medicare Part B Reimbursements - A dual eligible beneficiary's Medicare Part B premium could be reimbursed in a lump sum if determined retroactively eligible as a Specified Low-Income Medicare Beneficiary (SLMB). In such cases, the beneficiary will receive a reimbursement check from CMS after the State has provided back payment for those retroactive months. A Medicare Part B reimbursement is counted if the beneficiary used Medicare Part B premiums as all or a portion of a spenddown expense. The lump sum reimbursement is excluded if the beneficiary did not use Part B premiums as an expense for spenddown purposes. Such reimbursements may be counted in the month received for Medicaid LTSS beneficiaries receiving RSDI.3.4.6Self-Employment IncomeA. Self-employed beneficiaries are responsible for their own work schedules and are not covered under an employer's liability insurance or Workers' Compensation. Depending on the type of self-employment, a beneficiary may or may not have Social Security tax (FICA) deducted from pay. Examples of self-employment enterprises include but are not limited to: Farming; Product Sales (involving personal goods such as jewelry, household goods, clothing and the like); Personal Training; Professional Consulting; Small businesses; Services (personal care or day care); and Skilled Trades (roofers, painters, home design, etc.). The process for evaluating self-employed income includes: 1. Treatment of self-employment income in general - Self-employment income is reported as earned or unearned on the application and is generally accepted as attested unless conflicts are identified. Net selfreported income - gross self-income minus allowable deductions for business - is countable as earned income.2. Treatment of property related to self-employment income - Certain types of self-employment involve use of real property. Deductions from gross self-employment income for allowable expenses are made in accordance with Federal Internal Revenue Service (IRS) requirements associated with the business use of the home/vehicle. Special treatment is required with the following:a. Rental income. Income from rental property is counted as earned income only in those months the applicant/beneficiary spends an average of at least ten (10) hours per week maintaining or managing the property. Otherwise, rent is treated as unearned income. Deductible expenses are subtracted from gross rent in the month they are incurred. Any expense over the income are subtracted from the next month's rent. Rental deposits used to pay rental expenses or repairs become income to the landlord at the point of use. Verified expenses for providing a room or food or both to a roomer or boarder are subtracted from rental income.b. Room/Board Income. Roomer/boarder situations include the following: (1) A roomer lives with the household and pays for lodging only.(2) A boarder eats with the household and pays for meals only.(3) A roomer and boarder lives and eats with the household and pays for lodging and meals.(4) Net self-employment income derived from room and board is countable. To determine net income in such cases, allowable expenses are deducted from gross receipts. For these purposes, allowable expenses include costs for providing a room, food or both to a roomer/boarder; shelter costs based on percent of total rooms in the house that are for rent; and any costs related strictly to renting a particular room, such as accommodations related to a disability or to a particular boarder, such as a special diet.c. In-home Day Care. When a person provides family child care services in a home in which they have an ownership interest, net self-employment income is countable. In such instances, allowable expenses are itemized as business expenses for tax filing purposes and include food (meal and snacks) and educational and entertainment materials in addition to transportation and shelter costs. If the care is provided in a home in which there is no ownership interest, the applicant/beneficiary is treated as a private contractor and these additional allowable expenses are not deducted from gross employment income. Payments made by the DHS to an in-home child care provider in association with the State's Child Care Assistance Program (CCAP) are countable.3.4.7In-Kind IncomeA. In-kind income, whether earned or unearned, is generally counted at market value. Special Rules apply when such income takes the form of food or shelter: 1. Earned In-kind - Food and shelter provided in lieu of a cash payment for work is countable and subject to the applicable income disregards.2. Unearned in-kind - When no work is performed in exchange for room and shelter, its value is determined as follows:a. Assistance Household. If everyone in a household is receiving government assistance for income and maintenance based on need, income in the form of food or shelter is excluded regardless of value and source;b. Living in household of another. When a person is living in the household of another for an entire month and they do not have an ownership interest or pay an appropriate share of the monthly expenses for maintaining that household, a portion of the value of the food and shelter they receive is excluded.(1) If all meals and shelter are provided in-kind, the countable value is one third (1/3) of the FBR and the general income disregard does not apply. No other in-kind income is counted.(2) If food OR shelter is provided but not both, the presumed maximum value (PMV) Rule applies. The PMV is equal to one third (1/3) of the FBR and the twenty dollars ($20.00) disregard. This amount is counted unless the person can provide documented evidence that the market value of the food or shelter is below the PMV. All other disregards and exclusions apply.c. Living in own household. If the person lives in their own home and receives food and/or shelter in-kind, the PMV rule applies.3.4.8AvailabilityA. Under the following circumstances, the availability of income determines whether it is counted: 1. Support Payments - When an individual has been court-ordered to pay child support and/or spousal support to a former spouse, these payments are not deducted from countable income to the applicant. When the child support/spousal support is paid directly to the former spouse or child's guardian by the employer or benefit payer, the income continues to be determined available to the applicant/beneficiary.2. Income Deductions - Court-ordered income deductions are considered available income to the Medicaid beneficiary. A division of marital property in a divorce settlement is not considered a court-ordered income deduction in the context of this Rule.3. Loan Deductions - Deductions due to a repayment of an overpayment, loan, or other debt is considered as available income unless the amount being withheld to reduce a previous overpayment was included when determining the amount of unearned income for a previous month.4. Garnishments and Liens - When either is placed against earned or unearned income of a person, the amount must not be deducted from countable income, regardless of the purpose for the garnishment or lien.210 R.I. Code R. 210-RICR-40-00-3.4
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