Medicaid Policy                                                                 

421-1 What are Lump Sum Payments?

Effective Date: November 1, 2021

Previous Policy (421-1 was previously found in section 407-1 until November 1, 2021)

 

What are Lump Sum Payments?

 

1.    Lump sum payments are windfalls or retroactive payments of earned or unearned income.

2.    Lump sums include inheritances, settlements from personal injury suits, insurance settlements, awards, winnings, and gifts.

3.    They also include lump sums consisting of Social Security and Railroad Retirement benefits, VA lump sums, unemployment compensation lump sums, and other one-time payments.

4.    Federal tax refunds, including refundable credits such as Earned Income Tax Credit (EITC) and Child Tax Credit payments are not lump sum payments.

5.    Payments that will recur, even if only once a year, are not lump sum payments.