How lump sum payments are counted as income for cash assistance and TANF/SFA-related medical assistance.
WAC 388-455-0005
WAC 388-455-0005
Effective July 1, 2008
WAC 388-455-0005 How do lump sum payments affect benefits?
A lump sum payment is money that someone receives but does not expect to receive on a continuing basis.
For cash assistance and family medical programs, we count a lump sum payment :
As a resource, under WAC 388‑455‑0010, if it was awarded for wrongful death, personal injury, damage, or loss of property.
As income, under WAC 388‑455‑0015, if it was received for any other reason.
For Basic Food, we count lump sum payments for a previous period as a resource under WAC 388‑470‑0055. We count any amount for current or future months as income to your assistance unit.
For treatment of lump sum payments placed in trust for GA-U clients, see WAC 388-450-0005.
Compensatory awards, settlements, and retroactive benefits are often issued in several smaller payments instead of one large payment. These types of payments are considered unearned income. See WAC 388-450-0025.
For Basic Food, Diversion Cash Assistance (DCA) payments are considered lump sum payments.
WAC 388-455-0010
WAC 388-455-0010
Effective July 1, 2008
WAC 388-455-0010 When and how does the department treat lump sum payments as a resource for cash assistance and family medical programs?
If you receive a lump sum payment, we count it as a resource if it was awarded for:
Wrongful death;
Personal injury;
Damage; or
Loss of property.
If some of your lump sum payment is designated for medical bills or to repair or replace damaged property, we do not count the designated amount as a resource for sixty days starting the month after you received the payment. After the sixty day period, we count all of the lump sum payment that remains as a resource.
For family medical programs, we do not count an increase in your resources if you are continuously eligible as described under WAC 388-470-0026(1) and (2).
We exclude a portion of the lump sum payment for 60 days in order to give the client time to use the money for its intended purpose (repair or replacement of damaged or lost property or to cover medical costs).
If a client transfers the portion of the payment that counts as a resource for less than adequate consideration, they may have a period of ineligibility. See TRANSFER OF PROPERTY.
WORKER RESPONSIBILITIES
When a client reports that they have received a compensatory award or settlement, determine the amount that is designated to repair or replace damaged or lost property or to cover medical expenses.
If any portion is designated for these specific reasons:
Do not count this amount for 60 days following the month of receipt.
Set an alert to request verification of the amount that remains after the 60-day period.
When you receive the verification, determine if the client's total resources exceed the resource limit.
If the resources are over the limit, terminate the benefits following adverse action requirements. See LETTERS.
If the resources are under the limit, the client remains eligible for benefits.
For the portion not designated for the specific reasons:
Request verification of the amount remaining after the month of receipt.
When you receive the verification, determine if the client's total resources exceed the resource limit.
If the resources are over the limit, terminate the benefits following adverse action requirements. See LETTERS.
If the resources are under the limit, the client remains eligible for benefits.
WAC 388-455-0015
WAC 388-455-0015
Effective July 1, 2008
WAC 388-455-0015 When and how does the department treat lump sum payments as income for cash assistance and family medical programs?
This section applies to cash and family medical programs.
If you receive a lump sum payment that is not awarded for wrongful death, personal injury, damage, or loss of property, we count this payment as income to your assistance unit. We budget this income according to effective date rules under WAC 388‑418‑0020.
For cash assistance, if you cannot access some or all of your lump sum payment for reasons beyond your control, we will adjust the amount we count as income to your assistance unit as described under WAC 388‑450‑0005.
To decide the amount of your lump sum we count as income, we take the following steps:
First, we subtract the value of your current resources from the resource limit under WAC 388‑470‑0005;
Then, we subtract the difference in (3)(a) from the total amount of the lump sum; and
The amount left over is what we count as income, as specified in WAC 388-450-0025 and WAC 388-450-0030.
When the countable amount of the lump sum payment is:
Less than your payment standard plus additional requirements, we count it as income in the month it is received.
More than one month's payment standard plus additional requirements but less than two months:
We count the portion equal to one month's payment standard plus additional requirements as income in the month it is received; and
We count the remainder as income the following month.
Equal to or greater than the total of the payment standard plus additional requirements for the month of receipt and the following month, we count the payment as income for those months.
If you receive a one-time lump sum payment, and you are ineligible or disqualified from receiving cash benefits:
We allocate the payment to meet your needs as described under WAC 388‑450‑0105; and
Count the remainder as a lump sum payment available to eligible members of your assistance unit according to the rules of this section.
For family medical programs:
We count lump sum payments as income in the month you receive the payment.
If you cannot access some or all of your lump sum payment for reasons beyond your control, will adjust the amount we count as income to your assistance unit as described under WAC 388-450-0005.
We count any money that remains on the first of the next month as a resource except for recipients as described in WAC 388-470-0026 (1) and (2).
Clients are required to report the receipt of a one-time payment within 10 days of the date they learn about the change.
In some situations, clients will know beforehand that they will receive a one-time payment.
If this happens, the payment is budgeted against the benefits following the effective dates in WAC 388-418-0020.
This may result in a suspense or termination. See WAC 388-450-0245.
In most situations, clients will not know that they are going to receive a one-time payment until they actually have it.
Often, the payment will not be budgeted against the assistance due to the rules on effective dates.
You do not have to reconcile the difference to create an overpayment unless the client failed to report timely.
For cash assistance, if the lump sum is received for a child, the lump sum is counted as income unless the client can put the money into an irrevocable education trust. See WAC 388-470-0045.
Some reasons all or part of the lump sum may become unavailable beyond the client’s control include:
The client loses the payment funds
The payment funds are stolen; or
The client has unavoidable expenditures such as medical bills or lawyer fees.
If a client received a lump sum payment while living in another state and a period of ineligibility was established in that state, the period of ineligibility does not carry over to this state.
WORKER RESPONSIBILITIES
When determining the value of the client’s existing resources, do not include cash assistance the client received within thirty days of receiving the lump sum.
Client Reports Before Receipt
When a client reports that they will be receiving a one-time payment, determine if you need any other information before taking action. You need to know the amount and date of receipt. If the client did not provide this information at the time of report, request the information and allow 10 days for the client to provide it.
When you receive the information, budget the payment against the appropriate months by allowing 10-days advance notice.
If the payment causes the AU to be over income for one month, suspend the benefits for that month.
If the payment causes the AU to be over income for two months, terminate the benefits and determine eligibility for other medical programs.
If you do not have time to give the client 10-day notice, do not budget the payment against the benefits or create an overpayment.
Client Reports After Receipt
When a client reports that they have received a one-time payment, determine if you need any other information before taking action. You need to know the amount and date of receipt. If the client did not provide this information at the time of report, request the information and allow 10 days for the client to provide it.
When you receive the information, disregard the portion of the payment that is considered income in the month of receipt.
If you have time to give the client 10 days notice, budget the appropriate amount against the following month.
If the payment causes the AU to be over income for that month, suspend the benefits.
If you do not have time to give the client 10-day notice, do not budget the payment against the benefits or create an overpayment.
Client Reports Untimely
When a client reports the receipt of a lump sum payment later than required under WAC 388-418-0007, determine the effective date as if they had reported timely. See WAC 388-418-0020.
