Medicaid Policy
Medicaid Policy
Previous Policy (415-7 was previously found in 403-8 until November 1, 2021)
A. MAGI Based Programs
Taxable interest and ordinary dividends are countable income for MAGI-based programs. Non-taxable interest income (such as interest earned on municipal bonds) is also countable and is one of the income types that must be added back to taxable income to calculate MAGI income. Irregular and infrequent income may count if it is taxable (See 440-3).
B. Non-MAGI Based Programs
Irregular and infrequent income includes cash contributions, cash gifts for such occasions like Christmas, a birthday or graduation, interest, dividends and other types of income that is not subject to scheduled payments. Interest or dividends earned on certain resources, and a portion of irregular and infrequent income is not counted as income. When applying these policies, first decide if the income falls under the exclusion for interest or dividend income. If it does not, decide if the income is irregular and infrequent enough to be excluded (or partly excluded) under the irregular and infrequent income policy. For example, interest earned on retained amounts of SSA/SSI lump sums during the 9-month resource exclusion period is not excluded under #1. However, some or all of the amount earned may be excludable as infrequent or irregular income.
1. Interest or Dividend Income.
a. Do not count as income any interest or dividends earned on countable resources. This would include monthly interest earned on a personal checking account.
b. Do not count as income any interest or dividends earned on the following excluded resources.
i. Agent Orange Settlement funds;
ii. Austrian Social Insurance funds;
iii. Dedicated accounts containing retroactive SSI for a child;
iv. Disaster Relief funds;
v. Excluded benefits received under the Older American’s Act;
vi. German Reparation funds;
vii. Hemophilia Settlement payments;
viii. Individual Development Accounts;
ix. Japanese-American, Japanese- Canadian, and Aleutian Restitution funds;
x. Nazi Persecution Payments;
xi. Netherlands WUV payments;
xii. Payments to former prisoners of North Vietnam;
xiii. Radiation Exposure Compensation funds;
xiv. Vietnam Veteran's Spina Bifida payments.
c. Interest or dividends earned on all other excluded resources is countable income unless specific exclusions apply to the interest earned on those resources. See policy on specific resources to decide if interest or dividends earned on the resource have any special exclusion provisions (See 417).
2. Irregular and Infrequent Income
a. ABD and Long-Term Care
Irregular and infrequent income includes cash contributions, cash gifts, interest and dividends not otherwise excluded, and other types of income that is received too irregularly or infrequently to be included as income. This usually means the income is not received as monthly payments or that the person cannot expect to receive that income again. However, if an individual receives quarterly payments that are intended to be income to help cover the person's needs during the quarter, for example a quarterly annuity payment from a retirement investment, that income would be counted as regular income and would not be subject to this exclusion.
i. How to Count It. Effective with the calendar quarter beginning July 1, 2004, do not count the first $60 of unearned income received by the individual or couple in any calendar quarter when the income is received irregularly or infrequently.
(i) "Infrequently" means that the income is not received more than once a calendar quarter.
(ii) "Irregular" means the person cannot reasonably expect to receive the income again.
(iii) A quarter is any one of the 3-month periods of January-March, April-June, July-September, and October-December. If the income exceeds $60 in any calendar quarter, count the amount that exceeds $60.
ii. Income from Different Sources. Combine irregular and infrequent income received from different sources in a calendar quarter and exclude the first $60 of unearned income received. If an individual has two or more accounts with the same banking or investment institution, the interest or dividend received on each account is considered a different source.
iii. More than One Payment from the Same Source. If income is excluded as irregular or infrequent in a calendar quarter, and then more income is received from the same source, decide if the income is still irregular or infrequent. It cannot be treated as irregular or infrequent if it will continue to be received in monthly payments. However, if it will still be irregular or infrequent, continue to apply the above policy to future payments. If the additional payment added to the previous payment causes the amount received in the calendar quarter to be over $60, count the amount over $60 in the month it is received.
When an individual receives infrequent payments that total more than $60 a quarter, you must decide if the individual is likely to receive that amount each quarter. If so, include the estimated amount above the $60 as countable income in your best estimate of income for the months the individual expects to receive it. Document that the first $60 is excluded as per this policy.
See section 825 if infrequent or irregular income caused an overpayment or understated liability.
b. Family Medically Needy
i. How to Count It
(i) Do not count irregular or infrequent income of up to $30 per household member received in any one quarter if not received on a frequent basis. A quarter is any one of the 3-month periods of January-March, April-June, July-September, and October-December.
(ii) Disregard the irregular or infrequent income in the order received. Do not count any such income until the total amount exceeds $30 per person. Count the entire amount which exceeds the $30 limit.
ii. Gifts to a Household
If a cash gift is received by one person in the household, but the giver does not name a specific person as the recipient of the gift, the household can determine how to distribute the money. Document how the money is distributed.