Income

Revised April 29, 2013

Effect of income on Eligibility and Benefit Level

WAC 182-509-0001

WAC 388-450-0162

CLARIFYING INFORMATION

1.   We reduce the cash or Basic Food benefit amount by any sanction penalties or overpayment deductions before issuing a benefit.

2.   For information on how the cash benefit amount is calculated for the first month of eligibility, see WAC 388-450-0225.

3.   For cash assistance, when an AU contains eight or more people we calculate the benefit level by subtracting the countable income from the appropriate payment standard.  The grant payment cannot  exceed the maximum monthly payment of $941.00.  See WAC 388-478-0020  for cash assistance payment standards.

4.   The following guidelines apply to means testing of non-parental child-only grants:

a.    To determine eligibility and benefit amount, we define who to include in the AU as the applicant or recipient TANF child(ren), the caregiver, the caregiver’s spouse, all of the caregiver’s dependents, and any other persons financially responsible for the caregiver or for the TANF child(ren).

b.    A means test based on the Federal Poverty Level will be applied to the TANF/SFA payment standards. The means test will be applied after the countable income of the entire household, including the TANF child’s income, is determined, and before the TANF child’s income is budgeted against the appropriate payment standard.

c.    Caregivers of children placed by a state or tribal welfare agency with an open case are exempt from the means test. Even if only one of the TANF children in the household meets the criteria for the child welfare exemption, the whole household is exempt from means testing.

d.    SSNs will be requested for all child-only means-testing AU members. SSNs will not be required for members who have another way to verify their income.

How to Calculate Basic Food benefits

Staff must understand how to calculate Basic Food benefits in order to explain how a client's income and circumstances affect their benefits.  Use the following procedures to determine an AU's Basic Food benefits.

Gross income:

1. Determine total countable gross income for all AUs as follows:
   1. Include all dollar and cent amounts when calculating;
   2. Add all non-excluded earned income from all sources;
   3. Add all non-excluded unearned income from all sources; and
   4. Add all deemed and allocated income.
2. Compare total countable gross income to the gross income standard.
3. Deny the application or terminate benefits for AUs with income above the gross income standard under WAC 388-478-0060 unless the AU:

§         Includes an elderly or disabled person; or

§         Is categorically eligible (CE) under WAC 388-414-0001.  

   4.    Determine net income for AUs that meet the gross income standard and for AUs containing

          an elderly or disabled member.

Net income:  

Start with all dollar and cent amounts for income that is not excluded for Basic Food and all allowable expenses.

§     If the AU includes a person who is elderly or has a disability, we use the result from step b above as the shelter cost income deduction.

§     If the AU does not include an elderly or disabled person, we use the lesser amount of the result from step b or the maximum shelter deduction for these households under WAC 388-450-0190.  

Eligibility: 

Deny or terminate benefits if they are not CE under 388-414-0001 and they have net income over the net income limit under WAC 388-478-0060.

Benefit level:

For eligible AUs, determine their monthly benefit level by using the allotment formula or basis of issuance tables:

Allotment formula:

• Multiply the AU's net income by 30%;
• Round this amount up to the next whole dollar; and
• Subtract the result from the Maximum Allotment for the number of eligible AU members.

Basis of Issuance:   

Use the AU’s net income and household size to look up their monthly benefit amount using the Basis of Issuance Table - DSHS 12-006.

WORKER RESPONSIBILITIES

In an emergency situation when ACES is not available, calculate benefits for an AU eligible for Basic Food benefits by using Steps 1 - 3 above.

ACES is programmed to determine benefits for AUs appropriately based on the circumstances of the household including citizenship and alien status.  For households with non-citizens members, ensure that you code the (ALAS) screen in ACES correctly and update an immigrant’s information at recertification.

How to Calculate Cash Assistance (Means Testing) for Non-parental Child-Only Caregivers starting November 1, 2011:

1. Determine if any TANF child in the household is exempt from income means testing based on a state or tribal child welfare placement and an “open” child welfare case. Ask the caregiver if the child in their care was placed by a state or tribal child welfare agency.

a.    State child welfare cases are coded with an “R” or “F” in the Relative Placement field on the child’s DEM1 screen in ACES.

b.    Tribal-placed child-only cases may not be coded in ACES and may have to be identified  by phone contact with individual tribes. Follow your local protocol for communication with tribes, such as contacting your local tribal liaison.  If you are unsuccessful in confirming a placement through a tribal liaison, please contact Kerry Judge (360-725-4630 or Judgeka@dshs.wa.gov) or Tom Berry (360-725-4617 or berrytj@dshs.wa.gov) at CSD headquarters.

c.    If you successfully determine an open child welfare placement, the child is exempt from means testing and you should continue to process and finalize the TANF grant

2.    If the child is not exempt from means testing, determine who is in the child-only means-testing  household based on TANF household composition rules and enter this information into ACES.

3. Verify the countable income of all members of the child-only means testing household, based on TANF rules for what income is countable. Enter this information into ACES under the appropriate household member.
4. ACES will determine eligibility for the TANF child(ren) and the appropriate TANF payment standard if the child-only means-tested AU income is 300% of the Federal Poverty Level or less. If the means tested income is over 300% ACES will automatically close the child-only TANF grant.
5. If the household passes the means test the ACES system will budget only the TANF child’s countable income against the appropriate payment standard and determine the actual benefit amount.

CLARIFYING INFORMATION

To find the gross earned income limit for TANF/SFA, see  WAC 388-478-0035, Maximum earned income limits for TANF and SFA.

CLARIFYING INFORMATION

1. If a client does not report income timely and we later discover this income, we recalculate the client's benefits as if they had reported timely and determine if there is a benefit error.  Clients still receive the 50% earned income incentive. 

2. ABD  clients receive an earned income incentive and as described in WAC 388-450-0175, ABD earned income incentive .

3. When we determine the dependent care maximum deduction, we use a child's age on the first day of the month as the child's age for that month (e.g., If a child turns two on August 15, we consider the child as under two for August and two years of age in September).

WAC 388-450-0185

CLARIFYING INFORMATION

For information on the shelter deductions, see WAC 388-450-0190.

For information on utility allowances, see WAC 388-450-0195.

For information on medical deductions, see WAC 388-450-0200.

The following topics related to the above WAC are discussed below.

• Standard Deductions
• Child Support Payments
• Dependent Care Deductions
• Deductions for AUs with special circumstances

Standard Deduction

1. The Federal government sets the standard deduction each October by comparing 8.31% of the current federal poverty rate for the number of AU members to $134. The standard deduction is the larger of the two figures.
2. For the standard deduction, we count eligible AU members only.  We do not count ineligible members such as someone disqualified as an ineligible alien, or for an intentional program violation (IPV), and non-members such as ineligible students or someone who lives in the residence but is not an AU member under WAC 388-408-0035.

 Child Support Payments

1. We exempt court-ordered child support payments from gross income prior to administering the gross income test.
2. We exempt the lesser of the amount paid or the amount legally obligated.  We do not exempt an amount that is voluntarily paid over the legal obligation.

3. We do not exempt payments that are not legally obligated.  Examples of payments that do not qualify for this exemption are voluntary payments and contributions for a child's needs not specified in the court order.
4. Clients do not have to report changes in the amount of child support they pay. We do not consider failure to pay child support as a change of circumstance.  We are required to act on a change if clients report an increase or decrease in child support.
5. In addition to support paid for children outside the home, we allow the exemption when clients pay support for children now in the AU when the support is:
   1. Legally obligated; and
   2. For a period of time the child was outside the support payer's home.

6. If someone outside the AU consistently pays the child support obligation, we allow the child support exemption only if the AU member must repay the amount under a bona fide loan agreement. 
7. If a child support order requires the client to make an in-kind child support payment instead of, or in addition to a cash payment, we allow the amount the client pays for this expense as a child support exemption. Examples of these in-kind orders include requirements for the non-custodial parent to pay a portion of child care or medical costs.

Dependent Care Deductions

1. We allow all of the out-of-pocket cost for dependent care for the dependent care deduction.  This deduction is no longer limited based on the age of the person receiving care.
2. Dependent care expenses don’t need to be verified unless they are questionable.
3. Out-of-pocket travel expenses incurred when transporting dependents to and from a child care provider are allowable as part of the Basic Food dependent care deduction.

    

   1. When determining the mileage incurred for dependent care transportation don’t include the normal commute mileage by the Basic Food assistance unit (AU).
   2. Only allow the dependent care transportation expense for the additional mileage incurred by the AU member.  Use the current business IRS mileage rate to estimate the allowable deduction.
   3. Costs for other means of transporting dependents to and from the child care facility such as public transportation, paying a friend or relative outside the AU, or paying an additional amount for the daycare provider to transport dependents, are also allowable deductions.
   4. If client is claiming an amount over the IRS mileage rate estimate then the claimed expenses should be considered questionable and must be verified.

4. When a portion of the client's dependent care expenses are paid by Working Connections Child Care (WCCC) or any other source, the client may claim the dependent care deduction for the portion not paid by someone else. 
5. Some clients have both subsidized and private-pay child care expenses.  Clients can receive the deduction for both, as long as the requirements of WAC 388-450-0185 are met.
6. Child care expenses for educational purposes:
   1. If we disregard a client's educational benefits under WAC 388-450-0035, we can only allow a deduction for the anticipated child care expense above the amount "earmarked" for dependent care expenses.
   2. We prorate earmarked funds over the period that the clients are intended to use the educational benefits.

7.   Dependent care deduction when the person with income is an ineligible AU member:

If the ineligible member has income and dependent care expense billed to or paid by the ineligible member(s), we determine the deduction by:

·         Dividing the expenses evenly among all the AU's eligible and ineligible members; and

·         Assigning the prorated share of such expenses to the eligible members.

8.      WCCC co-payment waived by the provider:

We allow the dependent care deduction for a client's WCCC co-pay even if the provider waives the fee on a regular basis.

DEDUCTIONS FOR AUs with SPECIAL CIRCUMSTANCES

1.  Drug and Alcohol Treatment Facilities:

We allow the following deductions for clients who are paying a part of the cost of  their own care:

a.      Standard deduction;

b.      The amount the client pays as a medical cost if treatment is prescribed by a physician; and

c.      The amount the client pays that we do not use as a deduction in (ii) above as a shelter expense up to the shelter maximum.

Clients that do not pay a part of the cost of their own care receive the standard deduction only.

2.      Group living arrangements:

For clients who live in group-homes, we follow normal eligibility procedures other than shelter costs.  We determine the shelter costs for clients that pay room and board by deducting the maximum allotment for one person from the amount paid to the home. 

See WAC 388-478-0060 for maximum allotment.

CLARIFYING INFORMATION

Allowable shelter costs:

We allow the following ongoing and current shelter costs when calculating the shelter deductions for an assistance unit (AU):

1. We allow monthly rent cost including mandatory lease agreement fees for extra non-food expenses (e.g., cable, furniture, garage, and storage).

2.    For group home residents who pay a flat fee for room and board, we calculate allowable shelter costs by subtracting the one-person maximum allotment for Basic Food from the amount paid to the home.

3.    AU members that own or are buying a home can use the following home-ownership expenses as a shelter cost:

·         Payments on first and / or second mortgages (including home equity loans & home equity lines of credit);

·         Real estate contract payments, loan payments including interest, leading to ownership of the house or mobile home;

·         Property taxes.  When an AU has their property taxes deferred to a later date, we allow only the deductions for the taxes at the point the tax would be due without a deferral.  We do not allow taxes as a shelter cost if the taxes have been waived;

·         State and local assessments;

·         The entire amount of condo fees;

·         Mandatory homeowner's association fees;

·         Structural insurance only. We allow the total cost of structural and furnishings insurance only when the structural insurance cannot be separated from coverage for furniture and belongings;

·         Cost of an unoccupied home as allowed in WAC 388-450-0190;

·         Cost of home repairs resulting from a natural disaster such as fire or flood. We do not allow costs covered by insurance or other public or private sources; and

·         Costs for more than one residence in a single month when an AU moves mid-month.

 Non-allowable shelter costs:

We do not allow the following costs as a part of the shelter deduction:

·         The unpaid value of shelter a client receives free or at a reduced cost in exchange for work;

·         In-kind or non-cash payments instead of paying rent (e.g., client purchases $300 worth of household supplies instead of paying $300 to a roommate or landlord.)

·         Payments on a mortgage in excess of monthly minimum payment (pre-paying mortgage);

·         Down payments on a mortgage;

·         Balloon payments on a mortgage;

·         A payment toward the purchase of a home that is made after the last contract payment for the home;

·         A payment on a foreclosed home if the client is no longer legally obligated to pay the mortgage;

·         An HUD add-on to contract rental charges to recover previously undercharged rent.

·         Security or rental deposits;

·         Pre-payment of future rent in the month rent is prepaid (the expense is allowed in the month the payment is due);

·         Payments made directly to landlord or mortgage company by non-AU members;

·         Mandatory fees for meals specified in lease agreements.

·         Late fees;

·         Payments on mortgage or rental costs for a previous time period;

·         Costs for an unoccupied home unless it is allowed in WAC 388-450-0190.

·         Shelter expenses that are consistently paid by someone outside the AU.  If a parent, friend, or agency pays the client's shelter costs only on occasion, the AU is still eligible for the full shelter expense deduction.  HUD or FHA or other subsidies are not allowed as shelter costs.

·         Shelter deductions above the maximum shelter cost for an AU without an elderly or disabled person or where the only elderly or disabled AU member is an ineligible AU member.

4.  Shared living / roomers:

AU owns or is buying home -

When an AU owns or is buying a residence and shares the residence with another AU, we consider the AU that owns the home to have a roomer. 

a.    The rent paid to the homeowner is counted as self-employment earned income.  See Calculating Net Self-Employment Income in Special Situations to determine income from a roomer.

b.    The roomer receives the shelter deduction for;

                                        i.       The rent paid to the owner; and

                                      ii.       A standard utility allowance (SUA).

c.    The owner receives the shelter deduction for the standard utility allowance (SUA) and either:

                                        i.        The portion of shelter costs not used as a self-employment expense based on number of bedrooms in the residence and the number of bedrooms rented out; or

                                       ii.        All expenses the landlord must pay for the housing costs.

      Renting out areas other than rooms in AU's home-

When clients rent out an area of their home other than a bedroom, we count this area as another bedroom and determine self-employment expenses as described in ‘AU owns or is buying home '.  (above)

      AU rents residence -

AUs that rent a residence are considered to have roomers when:

a.    They rent out a portion of the residence to someone outside of the AU; and

b.    The rent they receive is more that the total rent obligation for the AU as shown on the rental agreement or lease.

                                    i.    The rent paid to the AU is counted as self-employment earned income.  See Calculating Net Self-Employment Income in Special Situations to determine income from a roomer.

                                  ii.    The roomer receives the shelter deduction for:

·         The rent paid to the AU; and

·         A standard utility allowance (SUA).

c.    The AU receives the shelter deduction for the standard utility allowance (SUA) and either:

                                    i.      The portion of shelter costs not used as a self-employment expense based on number of rooms in the residence and the number of rooms rented out; or

                                  ii.      All costs the AU must pay for the housing. See Clarifying Information of WAC 388-450-0195 for information on utilities.

d.    Clients that share a residence are not considered to have roomers if they:

                                i.          Do not own the residence;

                              ii.          Are not buying the residence; and

                             iii.          Do not charge their roommates an amount above the total rent as shown on the lease.

CLARIFYING INFORMATION

How can an AU qualify for SUA?  

An AU qualifies for SUA if the AU: 

• Receives a Low Income Home Energy Assistance Program (LIHEAP) payment;
• Is obligated to pay out-of-pocket heating or cooling costs separate from rent or mortgage costs; or
• Lives in public housing, uses a shared utility meter, and is billed only for excess utility expenses.

Since all Basic Food Households receive at least a minimal LIHEAP payment during their certification period, all WASHCAP and Basic Food households are eligible for the SUA.

CLARIFYING INFORMATION

1. To be eligible for the medical deduction, people must report all incurred and anticipated medical expenses at application and recertification.

2. We do not have to re-verify ongoing medical expenses during the certification period if they are not likely to change.

3. People do not have to report any changes in medical expenses during the certification period.

4. Anticipated expenses: 

   Persons eligible for a medical deduction may estimate medical expenses they expect to incur during the certification period.

1. The estimate must be based upon current, verified medical expenses that the AU member incurred, as well as other available information about the member's medical condition and insurance coverage.
2. If an AU reports an anticipated medical expense at the time of application or recertification but can't provide the verification at that time, we allow the expense when the verification is provided during the certification period.
3. If an AU voluntarily reports a change in a recurring medical expense, we treat the change as aCHANGE OF CIRCUMSTANCES.

5. Incurred expenses

   We allow out-of-pocket medical expenses that the eligible AU member incurs when the person:

1. Has an unpaid bill that has not been allowed previously,

2. Has a paid bill incurred during the certification period not reported previously; or

3. Arranges a payment plan for an expense and verifies when the installments are due.

6. One-time medical expense deduction:

   Customers who report a one-time, non-recurring medical expense can elect to have the entire expense budgeted in a single month for a one-time deduction. This would be a likely choice for bills that when averaged using one of the options in WAC 388-450-0200(3)(a) would not result in an increase in benefits.

7. Medical expenses of other AU members:

   This deduction is only for out-of pocket costs for the elderly person or an individual with a disability's medical needs. We can’t allow a deduction for medical expenses of an AU member who is not an elderly person or does not have a disability under WAC 388-400-0040 even if the individual in the AU who does meet these criteria pays the medical expense.

8. Medical equipment: 

   We can allow the cost of equipment as a medical deduction if it is needed due to the person's medical condition.  Examples of allowable medical equipment are:

1. Specialized telephone devices or TTY for hearing impaired people; and

2. Items needed for people with limited mobility such as:

   1. Wheelchairs;

   2. Walkers; and

   3. Modifications to the person's home such as:

      1. Grab bars;

      2. Wheelchair ramps; and

      3. Lowered countertops

9. Health insurance premiums:
   1. We do not allow the cost of third party health and accident insurance when the insurance benefit:

      1. Is payable in a lump sum payment upon death or dismemberment;

      2. Covers mortgage or loan payments upon death or disability; or

      3. Will be reimbursed.

   2. We allow the cost of Medicare premiums as a deduction:

      1. When the person is responsible to pay the premium; and

      2. For the period of time between approval of Medicare Savings benefits and the start of the buy-in.  For information on buy-in, see Medicare Savings Program.

10. Reasonable medical transportation costs: 

We must determine transportation costs on a case-by-case basis.  It is essential that the case documentation clearly show why an expense was allowed or denied.  If the cost is reasonable according to the situation, we can allow the costs.  Examples of allowable expenses are:

a.    Bus fare to get to medical appointments;

b.    The standard mileage rate for a privately owned vehicle as determined by the Internal Revenue Service.  Information on the current rate may be found in section 10.90.20 of The Office of Financial Management’s State Administrative and Accounting Manual: http://www.ofm.wa.gov/policy/10.90a.pdf.

c.    A rental car or taxi in an area or circumstance where bus service or a private vehicle is not available; and

d.    Long-distance phone calls to the person's medical practitioner instead of travel.

12. Postage or shipping cost for mail-order prescriptions:

Some people who use mail-order pharmacies must pay a shipping or postage fee in addition to the cost of their medicines. We allow the out-of-pocket costs of medications for certain AU members as an expense for the excess medical expense deduction. This includes postage or shipping fees if they are not included in the cost of the medications.

13. Spenddown: 

We do not allow the total spenddown obligation as a medical expense.  We allow the out-of-pocket expenses as they are incurred or anticipated.

14. Attendant care: 

We allow attendant care that is necessary due to age, infirmity, or illness.  Allowable attendant care includes, but is not limited to:

a.    Homemaker;

b.    Home health aide; or

c.    Housekeeper.

14. Expenses from non-standard providers: 

    We allow medical expenses prescribed by a state-licensed practitioner or other state-certified health professional.  If the person's health professional prescribes the treatment, we allow the medical deduction.  Expenses we allow when prescribed by a licensed or certified health professional include treatment by:

    1. Acupuncturists;
    2. Sanipractors;
    3. Homoeopathists;
    4. Herbalists;
    5. Massage Therapists; and
    6. Christian Science practitioners or theological healers.

15. Installment agreements: 

    We can allow expenses when they are anticipated to become due in an installment agreement. If the person misses some payments, we do not allow the expense again when it is actually paid, as it has already been allowed based on when it was originally due.

16. Expenses from medical marijuana: 

    The cost of medical marijuana is not allowable as a medical expense income deduction for Basic Food.

WORKER RESPONSIBILITIES

Determining Allowable Medical Expenses

1. Review the application for a statement that the client has a medical expense.
2. Ask all AUs with an elderly person or an individual with a disability if those members have:
   • Any medical/dental bills or expect to have these expenses; and/or
   • Verify the portion of the expense that will not be reimbursed or paid by another source by obtaining:
     • Proof of the amount of covered and uncovered expenses from all insurance carriers including Medicare; or
     • A billing from the provider showing the amount due after insurance coverage.
   • Certify the AU's benefits without the claimed deduction if the expense is not verified. 
   • When Medicare Savings benefits have been approved but the buy-in has not started, allow the deduction.  Set an alert to remove this deduction when the state starts to pay the premium.

CLARIFYING INFORMATION

COLA increases are not counted as income until April 1 of each year for the QMB, SLMB, ESLMB, QDWI, and QI programs.

The medical programs described in subsection (3) of the above WAC use the TANF / SFA income rules to determine countable income.  After determining countable income, treatment of income for medical programs may be different.  For example, see the Assistance Units for more information on family financial responsibility and when separate medical assistance units must be established.

For children's and pregnant women's programs with monthly income standards based on the FPL, the earned income deduction is limited to $90 for each working adult.  When the family income exceeds the CNIL, the case trickles to F99 / P99.  The medically needy monthly income standards are not based on the FPL.  The earned income deduction changes to the 50% deduction.

The income exclusion described in subsection (4)(i) is designed to assist families to meet the "three out of last six months" federal requirement.  See the Medical Extensions for further information.

Aces Procedures

See Basic Food Program - Medical Expenses as a Deduction

See Interviews - (DPEX) Dependent Care Expenses

See Interview - (SHEL) Shelter Expenses