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Obsolete Policy |
General Budgeting Rules
Budgeting is the process of determining a best estimate of income an individual or household will receive. Budgeting income is done prospectively meaning that we are using current and historical information to project what income the individual or household will receive during the certification period.
Consider the following factors to determine the best estimate of income.
What income is currently being received or that the client expects to receive in the future months
Historical patterns such as recurring income or regular seasonal income that are expected to continue in the future
Although budgeting will be similar for both MAGI-based and non-MAGI-based eligibility groups, there are a few differences. There are also some differences for the aged, blind and disabled Medicaid coverage groups.
For MAGI-based groups, determine a best estimate of income to be received during the certification period to arrive at a monthly amount. When income changes are reported during the certification period, see section 815-5.
For non-MAGI-based groups, use a best estimate of income and household size that will exist in the benefit month. The best estimate could change in future months due to expected changes.
These rules apply to the client's income, a spouse's income AND the income of any family members whose income must be counted based on the policy for the applicable coverage group to determine eligibility.
Budgeting for retroactive coverage months is discussed in sec. 445.
Basic Budgeting Concepts
Use prospective budgeting for MAGI-based coverage groups as well as non-MAGI-based coverage groups to determine the monthly income for each person in an individual's household whose income must be counted.
How we do the best estimate, the types of income counted,and the deductions that are allowed for MAGI-based and non-MAGI-based coverage groups are different. These differences may cause the countable income to be different when someone fails a MAGI group and eligibility is determined for a non-MAGI group. See 435-2.
Use the techniques of anticipating, averaging or annualizing income to determine an appropriate monthly income amount. The method used to determine the best estimate is based on the type of income, the frequency of receipt, the individual’s earnings history and any anticipated changes in circumstances. Determine which method to use based upon the individual's history and current circumstances.
When budgeting self-employment income for MAGI and Non-MAGI-based groups, determine the expected net annual income, and prorate that over 12 months to determine a monthly amount. Some other types of income such as contract or commission income may also need to be annualized.
Anticipating future income
For non-MAGI-based coverage groups, use the best estimate of monthly income expected to be received in that month. Explain the best estimate in writing. (435-2) If a change is expected to occur in the future, workers may need to set a task to redetermine income at the time of such change.
For example, a client only works nine months of the year. Client applies in a month they are not working. They fail the MAGI-based group because the agency anticipates the future income. However, for medically needy coverage, the household has no income and is eligible without a spenddown. When that income is expected to start again, the worker needs to redetermine eligibility and count that income.
For MAGI-based coverage groups, anticipate income that will be received less often than monthly, but that has a history of being received and is expected to be received again during the certification period. Prorate the income over the certification period, and add the prorated amount to the monthly income. An example is interest income that must be counted, but is received in only 1 month of the year. Prorate the amount over the 12 month certification period and count 1/12 in each month.
For the retroactive period, use actual income amounts received by all household members (as applicable) during the month, even when the benefit effective date is not the first day of the month. See section 705-1 to determine the retroactive period. This budgeting is the same for MAGI-and non-MAGI-based coverage groups.