Medicaid Policy
Medicaid Policy
Previous Policy (415-3 was previously found in 403-3 until November 1, 2021)
A. General Requirements
When an individual receives income such as Social Security, Civil Service, private pensions, etc., the income the person is entitled to receive may be more than the actual payment amount the individual receives. Count the total monthly entitlement as the monthly income of the individual according to the following provisions.
1. If an individual is supposed to be receiving unearned income, but says that the payments are being withheld, or deferred, for some reason, verify with the source of such payments the reason payments are not being made. In most cases, unearned income is countable when received. However, if the payment is not being made for a reason beyond the control of the individual, do not count the income until the individual receives it. If no payment is being made because an overpayment is being collected, see the following policy in this section under the specific Medicaid category the person is eligible for.
Exception: If SSI or SSA benefits are being suspended, or if income is being deducted from unearned income, apply the policies below based on the type of Medicaid the person receives. If the individual can take steps to make the income available, see 223.
2. Civil Service Benefits Divided Between Divorced Spouses.
If a Civil Service recipient is divorced, the divorce decree may award a portion of the Civil Service benefits to the spouse. This is because the law governing Civil Service benefits allows a spouse who meets certain criteria, to receive a portion of benefits under a domestic support order from the divorce court. The Civil Service office has a formula for calculating the benefit amount for the spouse. Upon receiving the order, Civil Service will determine the benefit amount to be paid to the spouse, and begin sending a check directly to the spouse. The benefit amount for the Civil Service recipient will be decreased by that amount.
When Civil Service benefits have been divided between divorced spouses, count only the gross benefit amount that the individual is entitled to receive after the division has been made. Do not subtract health insurance premiums or taxes that are being deducted. See 431-1 on Health Insurance deductions.
3. Other Pension or Retirement Income Divided Between Divorced Spouses.
When a married couple divorces, pension or retirement funds may be divided between them under a Qualified Domestic Support Order, or QDRO. A QDRO transfers an interest in one individual's pension plan, profit-sharing plan or other retirement investment plan to another individual, usually divorcing spouses. The person who has the interest in the retirement plan is called the participant because that person is the one eligible to receive benefits from the retirement plan. The person who will receive an interest in the retirement plan through the QDRO is called the "alternate payee." An alternate payee could be someone other than a former spouse, such as a child of the participant.
When a pension or retirement fund is divided by a QDRO, count as unearned income only the monthly benefit amount awarded to the individual. Request a copy of the divorce decree, or QDRO document, if it is separate. Do not deduct amounts taken out of the individual's benefit amount for things like health insurance or taxes, if any.
If the individual is not receiving monthly payments, the ownership interest in the retirement plan may be a countable asset. See 521-13.
4. Disability Insurance.
Some private disability insurance payments may be reduced if the individual becomes eligible for Social Security Disability payments or begins receiving other income. If the information indicates that the private disability income is reduced because the individual is receiving Social Security benefits or other income, count the reduced amount of the disability insurance payments. However, if health insurance premiums or garnishments for child support, etc., are being deducted from a private disability payment, you must count what the person would be able to receive if those deductions were not taken out of the payment.
B. ABD, Long-Term Care
Count the gross amount of unearned income. This is the entitlement amount without deductions. Do not deduct any amount withheld because of an overpayment or court-ordered support payments, or other garnishments. Do not deduct the amount of premiums paid for private health insurance or for Medicare premiums deducted from income. (See 431-1)
Social Security insurance benefits like disability and retirement benefits do not usually decrease, unless SSA decides they used incorrect wage information to calculate benefits. Therefore, if a Social Security disability benefit suddenly goes down, SSA is usually subtracting an amount for a garnishment or for an overpayment. Continue counting the gross entitlement. Survivor's benefits may decrease if another family member becomes eligible for part of the benefit. Survivor's benefits also increase when another family member becomes ineligible for the benefit.
1. Count the gross benefit amount as if the person were receiving the payment when Social Security withholds payments of either SSI or SSDI for one of the following reasons:
a. When SSI has determined an individual eligible for SSI payments, begins payments, but stops them because the person transferred assets for less than fair market value, count the SSI income as if the person were still receiving it.
b. When Social Security has determined the person is eligible for either SSA benefits (Title II) or SSI payments, or both, but is withholding payments because the person gave them false or misleading information, count the benefit amount as if the person were still receiving the payment. If the person was eligible for SSI and payments are suspended because of this sanction, the person is still considered an SSI recipient.
2. Use the gross amount minus a reduction to recoup an overpayment only if the individual was receiving Medicaid benefits at the time the overpayment was received and the overpaid amount was used to compute a Medicaid spenddown.
C. Family Medically Needy
Family, child and pregnant woman medically needy programs, When the entitlement amount of a benefit differs from the actual payment amount, use the following criteria to determine what unearned income is countable:
1. Deductions due to an Overpayment. Count the entitlement amount less the amount being deducted to repay an overpayment.
2. Other Deductions. Count the full entitlement amount when amounts are deducted to pay obligations other than an overpayment, such as (but not limited to) insurance premiums, savings, garnishments to pay an owed obligation like child support, debts, etc.