Classic (non-MAGI) based programs manual

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Income overview 1: income eligibility

Revised Date: 
April 12, 2022

Purpose: To describe how various types and amounts of income affect an individual’s eligibility for Categorically Needy (CN) or Medically Needy (MN) health care coverage.

Subtopic: Counting

WAC 182-512-0600 SSI-related medical -- Definition of income.

Effective June 10, 2019.

  1. Income is anything a client receives in cash or in-kind that can be used to meet his/her needs for food or shelter. Income can be earned or unearned.
  2. Some receipts are not income because they do not meet the definition of income above. Some types of receipts that are not income are:
    1. Cash or in-kind assistance from federal, state, or local government programs whose purpose is to provide medical care or services;
    2. Some in-kind payments that are not food or shelter coming from nongovernmental programs whose purposes are to provide medical care or medical services;
    3. Payments for repair or replacement of an exempt resource;
    4. Refunds or rebates for money already paid;
    5. Receipts from sale of a resource;
    6. Replacement of income already received (see 20 C.F.R. 416.1103 for a more complete list of receipts that are not income); and
    7. Receipts from extraction of exempt resources for a member of a federally recognized tribe.
  3. Earned income includes the following types of payments:
    1. Gross wages and salaries, including garnished amounts;
    2. Commissions and bonuses;
    3. Severance pay;
    4. Other special payments received because of employment;
    5. Net earnings from self-employment (WAC 182-512-0840 describes earnings exclusions);
    6. Self-employment income of tribal members unless the income is specifically exempted by treaty;
    7. Payments for services performed in a sheltered workshop or work activities center;
    8. Royalties earned by a client in connection with any publication of their work and any honoraria received for services rendered; and
    9. In-kind payments made in lieu of cash wages, including the value of food or shelter.
  4. Unearned income is all income that is not earned income. Some types of unearned income are:
    1. Annuities, pensions, and other periodic payments;
    2. Alimony and support payments;
    3. Voluntary or court-ordered child support payments, including arrears, received from a noncustodial parent for the benefit of a child are the income of the child;
    4. Dividends and interest;
    5. Royalties (except for royalties earned by a client in connection with any publication of their work and any honoraria received for services rendered which would be earned income);
    6. Capital gains;
    7. Rents;
    8. Benefits received as the result of another's death to the extent that the total amount exceeds the expenses of the deceased person's last illness and burial paid by the recipient;
    9. Gifts;
    10. Inheritances;
    11. Prizes and awards; and
    12. Amounts received by tribal members from gaming revenues with the exceptions cited in WAC 182-512-0770(3).
  5. Some items which may be withheld from income, but which the agency considers as received income are:
    1. Federal, state, or local income taxes;
    2. Health or life insurance premiums;
    3. SMI premiums;
    4. Union dues;
    5. Penalty deductions for failure to report changes;
    6. Loan payments;
    7. Garnishments;
    8. Child support payments, court ordered or voluntary (WAC 182-512-0900 has an exception for deemors);
    9. Service fees charged on interest-bearing checking accounts;
    10. Inheritance taxes; and
    11. Guardianship fees if presence of a guardian is not a requirement for receiving the income.
  6. Countable income, for the purposes of this chapter, means all income that is available to the client:
    1. If it cannot be excluded; and
    2. After deducting all allowable disregards and deductions.

This is a reprint of the official rule as published by the Office of the Code Reviser. If there are previous versions of this rule, they can be found using the Legislative Search page.

Clarifying Information

  1. Rent payments received from roomers or boarders are considered unearned income.
  2. The interest portion of payments on sales or real estate contracts owned by an individual who is resource eligible is counted as unearned income when the combined value of all resources is at or below the resource standard. Count only the portion of the payment that goes toward interest as unearned income.
  3. Puyallup Tribe Settlement Income: Budget interest income from the annuity fund payment or the initial investments as newly acquired income.
  4. Receipt of gaming money by tribal members is considered unearned income in the month received. Gaming money set aside in trust funds by the tribe is not considered available until it may be accessed by the tribal member for whom it is set aside.
    Example: A tribe pays $2,000 per month gaming money to each tribal member. For tribal members under age 18, $1,000 per month is set-aside in a trust fund which can be used by the child on or after his or her 18th birthday. The $1,000 received each month is considered income in the month received. The $1,000 per month set-aside is not considered until the child reaches 18. The month after the child turns 18, any money remaining from the trust fund is considered an available resource and that month’s $2,000 is considered income.
  5. Home equity conversion plans: a security interest in the home is given in exchange for a lump sum, a periodic cash payment, or a line of credit. The most common home equity conversion plan is a reverse mortgage that allows the homeowner to borrow from the equity in the home with no repayment as long as they live in the home. The funds received under a home equity conversion plan are a loan, and thus do not count as income. However; 
    1. Interest earned on any money received under the home conversion plan is considered unearned income, and
    2. Money retained into the following month is considered a resource as of the first of the month following the month of receipt.

Other Examples: Items an individual may receive that are not considered income include:

  • Weatherization assistance;
  • Proceeds from a loan the individual takes out; or
  • Bills paid directly to the vendor by another party.

Note: Proceeds from timber sales are considered a resource, not income, in the month received. This was a court decision – conversion of a resource: Cootes v. Sullivan, No. 91 36073 (9th Cir. 1992).

Example: Riley just bought his first home. He paid the closing costs that were on the papers, and a month later was sent $300 because the actual closing costs were less than estimated. The $300 is not income; it is a refund of money he already paid.

Example: Debbie just sold her 1989 Toyota because she decided to use public transportation instead of spending money on car repairs. The money she gets for selling the car is not income. She exchanged one resource (the car) for another (cash).

WAC 182-512-0700 SSI-related medical -- Income eligibility.

Effective July 7, 2019.

  1. In order to be eligible, a person is required to do everything necessary to obtain any income to which he or she is entitled including (but not limited to):
    1. Annuities;
    2. Pensions;
    3. Unemployment compensation;
    4. Retirement; and
    5. Disability benefits; even if their receipt makes the person ineligible for agency services, unless the person can provide evidence showing good reason for not obtaining the benefits.
  2. The agency does not count this income until the person begins to receive it. Income is budgeted prospectively for all Washington apple health (WAH) health care programs.
  3. Anticipated nonrecurring lump sum payments other than retroactive SSI/SSDI payments are considered income in the month received, subject to reporting requirements in WAC 182-504-0110. Any unspent portion is considered a resource the first of the following month.
  4. The agency follows income and resource methodologies of the supplemental security income (SSI) program defined in federal law when determining eligibility for WAH SSI-related medical or medicare savings programs unless the agency adopts rules that are less restrictive than those of the SSI program.
  5. Exceptions to the SSI income methodology:
    1. Lump sum payments from a retroactive old age, survivors, and disability insurance (OASDI) benefit, when reduced by the amount of SSI received during the period covered by the payment, are not counted as income;
    2. Unspent retroactive lump sum money from SSI or OASDI is excluded as a resource for nine months following receipt of the lump sum; and
    3. Both the principal and interest portions of payments from a sales contract, that meet the definition in WAC 182-512-0350(10), are unearned income.
  6. To be eligible for WAH categorically needy (CN) SSI-related health care coverage, a person's countable income cannot exceed the WAH CN program standard described in:
    1. WAC 182-512-0010 for noninstitutional WAH coverage unless living in an alternate living facility; or
    2. WAC 182-513-1205 for noninstitutional WAH CN coverage while living in an alternate living facility; or
    3. WAC 182-513-1315 for institutional and waiver services coverage.
  7. To be eligible for SSI-related health care coverage provided under the WAH medically needy (MN) program, a person must:
    1. Have countable income at or below the effective WAH MN program standard as described in WAC 182-519-0050;
    2. Satisfy spenddown requirements described in WAC 182-519-0110;
    3. Meet the requirements for noninstitutional WAH MN coverage while living in an alternate living facility (ALF). See WAC 182-513-1205; or
    4. Meet eligibility for institutional WAH MN coverage described in WAC 182-513-1315.

This is a reprint of the official rule as published by the Office of the Code Reviser. If there are previous versions of this rule, they can be found using the Legislative Search page.

Example: An individual reports on April 10th that she will receive a lawsuit settlement that specifies a payment of $5,000 on July 1st. The Agency or it's designee would anticipate the $5,000 payment as income in July. If the individual has $100 of that payment left on August 1st, that $100 is counted as a resource effective August 1st.

WAC 182-512-0750 SSI-related medical -- Countable unearned income.

Effective April 14, 2014.

The agency counts unearned income for Washington apple health (WAH) SSI-related medical programs as follows:

  1. The total amount of income benefits to which a person is entitled is treated as available unearned income even when the benefits are:
    1. Reduced through the withholding of a portion of the benefit amount to repay a legal obligation;
    2. Garnished to repay a debt, other legal obligation, or make any other payment such as payment of medicare premiums.
  2. Payments received on a loan:
    1. Interest paid on the loan amount is considered unearned income; and
    2. Payments on the loan principal are not considered income. However, any amounts retained on the first of the following month are considered a resource.
  3. Money borrowed by a person, which must be repaid, is not considered income. It is considered a loan. If the money received does not need to be repaid, it is considered a gift.
  4. Rental income received for the use of real or personal property, such as land, housing or machinery is considered unearned income. The countable portion of rental income received is the amount left after deducting necessary expenses of managing and maintaining the property paid in that month or carried over from a previous month. Necessary expenses are those such as:
    1. Advertising for tenants;
    2. Property taxes;
    3. Property insurance;
    4. Repairs and maintenance on the property; and
    5. Interest and escrow portions of a mortgage.

NOTE: When a person is in the business of renting properties and actively works the business (over twenty hours per week), the income is counted as earned income.

This is a reprint of the official rule as published by the Office of the Code Reviser. If there are previous versions of this rule, they can be found using the Legislative Search page.