Medicaid Policy
Medicaid Policy
Income Exclusions
Some payments or benefits an individual receives are not income and therefore are never counted as part of the individual's income to determine eligibility. Payments and benefits that are not income include:
1. Medical and Social Services, Related Cash and In-Kind Items as follows:
a. From a governmental agency that provides medical or social services:
i. Cash for medical or social services is not income (this does not include payments under TANF, VA, BIA or similar income assistance).
ii. In-kind medical or social services items (including shelter).
b. From non-governmental agencies:
i. Cash for medical or social services the individual received is not income if the cash does not exceed the expenses already incurred. Excess cash would count as income.
ii. Cash for future medical or social services that is restricted for that purpose only is not income.
iii. In-kind medical or social services items that are not food or shelter are not income (for ABD Medicaid shelter would count as income).
c. Food or shelter provided while a person is an inpatient in a medical facility is not income.
d. Things that are not medical and social services and count as income even when provided by a medical or social services agency:
i. Payments for work performed at sheltered workshops are income.
ii. Incentive payments to encourage people to use certain facilities or participate in certain medical or social service activities are income if there are no restrictions on the use of the funds and they are not reimbursements for expenses the person incurs.
iii. Payments of flat rate insurance like a hospital plan that pays a daily rate to the individual for each day in the hospital is income.
2. Personal Services such as mowing the lawn, shopping, babysitting, housecleaning, or other similar services, which are done sporadically, without the intent to establish a self-employment business, and render nominal amounts of money.
3. Receipts from the sale, exchange or replacement of resources are not income. The new form of the resource such as the cash received from selling an excluded car is still a resource, and may count as a resource on the first of the month after the exchange or sale is made.
4. Rebates, refunds, or return of money already paid is not income when received. Rebates do not include a return on an investment, such as dividends on a business interest.
5. Amounts refunded from taxes already paid.
6. Credit life or credit disability insurance payments because these payments are made directly to the loan or mortgage company. The value of food or shelter received as a result (i.e., the credit life pays the mortgage while someone is disabled).
7. Proceeds from a bona fide loan agreement that the individual is expected to repay. However, if the person lending the money receives interest, the interest received is income.
a. For Educational Loans see 415-6.
b. Reverse equity mortgages. Reverse equity mortgages are loans to the homeowner. The monies received are not income in the month of receipt. Under reverse equity mortgages, homeowners may borrow money against the value of their home and receive a lump sum payment, or monthly payments for a certain period of time. The mortgage holder will hold a lien on the property until repayment is made. Repayment can be when:
i. The house is sold;
ii. The house is turned over to the mortgage holder; or
iii. The owners die and repayment is taken from the settlement of the estate.
c. The proceeds received from a loan become a countable resource in the month following the month of receipt, if retained. This includes the proceeds from a home equity loan or a reverse equity mortgage. If the loan is an educational loan, see 521-10 for policy on resource exclusion.
8. Payment of a person's bills by a third party is not income.
· For ABD Medicaid, when a third party pays shelter costs, it is in-kind income subject to the PMV rule (see 415-10).
9. Replacement of income that was lost or stolen.
10. A payment the individual receives in error is not income if the individual returns the un-cashed check or otherwise repays the money received in error.
11. Weatherization assistance, which includes insulation, storm doors or windows, etc.
12. Certain non-cash items are not income if the item will become a wholly or partially excluded non-liquid resource the following month. For policy regarding shelter for ABD Medicaid, see 415-10.
Example: An individual in a wheelchair receives a van with a wheelchair lift paid for by donations raised by their church. This is the individual's only vehicle and is excluded the month after they receive it.
13. Certain Employee benefits. Payments made by employers on behalf of employees that are not earnings and are not available to meet food or shelter costs are not income.
· Payments to a retirement plan,
· Medical insurance, and
· FICA taxes paid by the employer
14. TPL. Payments from a medical insurance policy are not income to the individual if they are paid directly to medical providers or collected by the Office of Recovery Services as a third-party liability.
15. Sale of bodily fluids irregular or infrequent payments or benefits received from plasma or other bodily fluid donations.
· Regular payments or benefits received are considered a business and excluded from this exemption see 440-3.