6400 - Exempt Income
6410 Income Exempt as Income Only and Income Exempt as Income and a Resource - "See Policy Memo #05-03-01 re:Exclusion of Combat Pay
Income from the following sources is exempt as income
only in the month received or, where indicated, also exempt as a resource
in the following months.
Adoption Support, Foster Care and Permanent Custodianship Subsidy
- TANF and CC - Adoption Support, PermanentCustodianship Subsidy and Foster Care payments (including Independent Living payments) are exempt as income in the month received and as a resource in the following months. Also see 2210.
- MS, QMB, LMB, QWD, and MediKan - Adoption Support, Permanent Custodianship Subsidy and Foster Care payments (including Independent Living payments) are exempt as income in the month received.
- Food Assistance - Foster care and Permanent Custodianship Subsidy payments are exempt if the child(ren) are not included in the household. See 4211 (1). Adoption support payments are not exempt.
Aleut
Income (All Programs) - Payments granted to certain eligible
Aleuts under Title II of P.L.100-383 (enacted 8/10/88) is exempt as
income in the month received and as a resource in the following months.
AmeriCorps
(All Programs) - Any payments
provided through AmeriCorps are exempt as income in the month received
and as a resource in the following months.
Also see below for special rules regarding the treatment of VISTA
Income (an AmeriCorps Program).
Charitable
Donations (All Programs) - Any cash or in-kind donation
based on need not to exceed $300 in any quarter starting in January,
April, July or October which are received from one or more public
or private nonprofit charitable organizations are exempt as income
in the month received and as a resource in the following months. Amounts
in excess of $300 shall be considered as countable unearned income.
Child
Care Payments (All Programs) - Child Care payments made
to persons other than a child care provider are exempt as income in
the month received.
Children's
Earnings - The earned income for a child who is an elementary
or secondary school student (including GED) is exempt as income in
the month received. The exclusion shall continue to apply during temporary
vacation breaks, provided the childs enrollment will resume following
the break. This exclusion does not apply to emancipated minors or
to unemancipated minors determined able to act in own behalf per 2112 (2).
Combat Pay (All Programs) - Additional pay received by military personnel as a result of deployment to a combat zone is exempt. Refer to Policy Memo 05-03-01 for details on determining countable income for households with a member in a combat zone. Also refer to Combat Zones Approved for Tax Benefits for a current list of combat zones.
Crime Victims Fund (All Programs) - Payments made
pursuant to the Crime Victims Fund (Public Law 103-322), as amended
are exempt as income in the month received.
All Programs - Death benefits
(OASDI, VA, RR, or other burial benefits) when used toward the
cost of burial are exempt as income for the month received and
as a resource in the following months.
Payments occasioned by
the death of another person to the extent that the payments have
been expended or committed to be expended for purposes of the
deceased persons last illness and/or burial. Such payments include,
but are not limited to, proceeds from a life insurance or burial
insurance policy, gifts, and inheritances.
For the purposes of this provision, a persons last illness is defined as the illness which resulted in the persons death. Death resulting from injuries would not be considered in this definition. Medical expenses that can be reasonably attributed to the persons last illness shall be excluded in determining the amount of payment that is considered to be available. Documentation is required.
Disaster Payments (All Programs) - Federal
major disaster and emergency assistance and comparable disaster assistance
provided by state or local government or by disaster assistance organizations
in conjunction with a presidentially declared disaster are exempt
as income in the month received and as a resource in the following
months.
This includes disaster unemployment assistance to an individual as
a result of a major disaster. Individuals cannot be eligible for any
other unemployment compensation and also receive disaster unemployment
benefits. Payments are limited to 26 weeks. EES Administration will
notify the field if such disaster unemployment assistance is paid
in Kansas due to a major disaster.
Donated Foods (All Programs) - The value
of the U.S. Department of Agriculture donated foods are exempt as
income in the month received and as a resource in the following months.
in college or university at
least 8 hours a week;
in grades 7-12 for at least
12 hours a week;
in a training course to prepare
for employment at least 12 hours a week.
Earned Income Tax Credits (All Programs) -
Earned income tax credits received as a lump sum refund is exempt
as income in the month received and as a resource in the following
twelve months.
Educational Income (All Programs) - Any bona
fide grant, scholarship, loan or other money payment for educational
purposes from any source including, but not limited to, PELL grants,
SEOGs, GLSs, Carl D. Perkins Vocational ACT grants, college work study,
grants or loans from civic organizations, Veterans Educational Income
and private student loans from family or nonfamily members is exempt
as income in the month received and as a resource in the following
months.
NOTE: Veteran's Educational income includes: GI Bill;
vocational rehabilitation payments for service related disabilities
(Chapter 31); and educational payments to children (18-26) and spouses
of Veterans with a service connected death or 100% disability. The
portion of the GI Bill payment that is the monthly housing allowance
(MHA), is NOT exempt under this provision. See 6220
(11).
Interest on Kansas Investments Developing Scholars (K.I.D.S.) accounts
is exempt as long as the account is maintained. Withdrawals from the
Participant Account and from the Match Account are also exempt.
Monies which are received as monthly living benefits from stipends
or special programs such as Social Security to survivors based on
educational participation, or to Native Americans through Tribal sources
or Bureau of Indian Affairs shall not be exempt under this provision
as they are not considered grants, loans or scholarships.
Family Subsidy (All Programs) - Family subsidy payments provided through the Mental Health and Developmental Disabilities Commission or Family Support payments provided through the Prevention and Protection Services Commission are exempt as income in the month received and as a resource in the following months.
Filipino Veterans Equity Compensation Fund (All Programs)
– Payments from the Filipino Veterans Equity Compensation
Fund are exempt as income and as a resource. This fund was created
by the American Recovery and Reinvestment Act (ARRA) of 2009 for certain
veterans and the spouses of veterans who served in the military of
the Government of the Commonwealth of the Philippines during World
War II. The compensation fund offers one-time payments of up to $15,000
to eligible persons.
Food Assistance (All Programs) - The value
of the benefits issued under the current Food and Nutrition Act of
2008 are exempt as income in the month received and as a resource
in the following months.
Foster Care (Food
Assistance) - See 4220.
All
Programs Except Food Assistance - Any payment provided
to volunteers serving as foster grandparents is exempt as income
in the month received and as a resource in the following months.
Food Assistance - The
payment referenced in (a) above is only exempt as income in the
month received.
Gifts (All Programs)
- Gifts $50 or under (per case/per month) of irregular,
occasional or unpredictable monetary gifts are exempt as income in
the month received. Regular monetary gifts of any amount are countable.
Gifts of more than $50 are countable in full.
Examples:
1) Ann received $40 for her birthday. This payment is exempt.
2) Bill receives $100 a month from his mother to help pay his rent.
It is not a loan, it is a gift. The full $100 is countable since it
is in excess of $50.
Note: Establishment-specific
gift cards (such as Walmart or Olive Garden) shall be exempt as income.
However, credit card company gift cards (such as Visa or MasterCard
that can be spent as cash) that are provided regularly and can be
reasonably anticipated shall be counted as income.
Health
Profession Opportunity Grants (HPOG) (All Programs) - The
Patient Protection and Affordable Care Act (ACA) amended the Social
Security Act to provide demonstration project authority to address
health professions and workforce needs. HPOG was awarded to 32 entities,
including State agencies, workforce investment boards, community based
organization and institutions of higher education. Section 5507 of
ACA specifically excludes any aid, services, or incentives provided
to an eligible beneficiary under the HPOG from being counted as income
in determining eligibility and benefits for any means tested program.
In Kansas, the Kansas Health Profession Opportunity Project (KHPOP)
meets this criteria, and any payments received from the program are
exempt as income.
Holocaust Survivors (All Programs) - Reparation
payments made to Holocaust survivors are exempt as income in the month
received. These payments shall also be exempt for purposes of determining
patient liability in a long term care arrangement.
Hostile Fire Pay (All Programs) - Hostile
fire pay (also known as combat pay)received while in active military
service is exempt as income in the month received.
See Policy Memo 05-03-01
for more detailed information, especially the applicability of this
exemption on food assistance cases.
- $2,000 Per Year (All Programs) - Up to $2,000 per calendar year of income received by individual Indians, which is derived from leases or other uses of individually-owned trusts or restricted lands pursuant to P. L 103-66 and P. L. 97-458 is exempt as income in the month received. For purposes of this provision, the exclusion of income shall be applied only to months for which an eligibility determination is being made. For income which is received monthly or more frequently, the exclusion shall be applied beginning with the first month of eligibility determination until the $2,000 limit is attained. For intermittent income situations, the income up to $2,000 shall be subtracted from total intermittent income for the appropriate period with the remainder prorated to determine the countable monthly amount. These payments are exempt as income in the month received and as a resource in the following months for the Food Assistance Program.
- Secretary of Interior (All Programs) - Any funds for an Indian tribe which are distributed or held in trust by the Secretary of the Interior (including Indian judgment funds), including interest and investment income accrued on money held in trust and initial purchases made with any funds distributed are exempt as income in the month received and as a resource in the following months.
Contact with the Bureau of Indian Affairs will be necessary to verify that the funds are exempted or are another type of benefits which must be counted as income.
- Aroostook Band (All Programs Except Food Assistance) - Payments granted to the Aroostook Band of Micmac Indians under Public Law 102-171 are exempt as income in the month received and as a resource in the following months.
- Assiniboine Tribe (Food Assistance) - Payments awarded to the members of the Assiniboine Tribe of the Fort Belknap Indian Community or the Assiniboine Tribe of the Fort Peck Indian Reservation, received pursuant to P.L. 98-124 (enacted 10-83) are exempt as income in the month received and as a resource in the following months.
- Chippewa Tribe (Food Assistance) - Payments awarded to the members of the Red Lake Band of Chippewa Indians, received pursuant to P.L. 98-124 (enacted 10-83)are exempt as income in the month received and as a resource in the following months.
- Navajo and Hopi (Food Assistance) - Payments of relocation assistance to members of the Navajo and Hopi Tribes under P.L. 93-531 are exempt as income in the month received and as a resource in the following months.
- Ottawa Tribe (Food Assistance) - Payments received from the disposition of funds to the Grand River Band of Ottawa Indians (P.L. 94-540) are exempt as income in the month received and as a resource in the following months.
- Passamaquoddy Tribe (Food Assistance) - Payments to the Passamaquoddy Tribe and the Penobscot Nation or any of their members received pursuant to the Maine Indian Claims Settlement Act of 1980 (enacted 10-83) are exempt as income in the month received and as a resource in the following months.
- Yakima Nation and Apache Tribe (Food Assistance) - Payments by the Indian Claims Commission to the Confederated Tribes and Bands of the Yakima Indian Nation or the Apache Tribe of the Mescalero Reservation (P.L. 95-433) are exempt as income in the month received and as a resource in the following months.
It
is established by or on behalf of a TANF recipient or by or on
behalf of an individual participating in the Assets for Independence
Demonstration Program (AFIA) and is used for a qualified purpose.
qualified
purpose is one or more of the following:
post-secondary education
expenses for college or vocational-technical school. Learning
Quest or other 529 accounts are not considered IDAs;
first home purchase (must
not have owned a home within three years of acquisition);
or
business capitalization
(business plan must be approved by financial institution or
non-profit loan fund).
NOTE: Any funds withdrawn from an IDA and used for any purpose other than one of those listed above shall count as unearned income in the month withdrawn.
- The IDA must be a trust funded through periodic contributions by the establishing individual and may be matched by or through a qualified entity for a qualified purpose.
- A qualified entity to match IDA funds for a TANF recipient is either a not-for-profit organization described in section 501(c)(3) of the IRS code of 1986 and exempt from taxation under section 501(a) or a state or local government agency acting in cooperation with a 501(c)(3) organization. For AFIA participants, matching contributions are made by the federal government through a grantee.
- TANF and AFIA recipients may only contribute to IDAs with income derived from earnings. Note: The earnings of an adult placed in an IDA are counted as earned income in the month earned.
- Parents may establish IDAs for their children as well as for themselves. Children may also contribute their earnings to accounts established by or for them.
Loans
(All Programs) - All loans, including loans from private
individuals as well as commercial institutions, including deferred
educational loans, shall be exempted from household income.
Monies received from reverse mortgages are treated
as loans, even if payments are regular and predictable.
When verifying that income is exempt as a loan, a legally
binding agreement is not required. A simple statement signed by both
parties which indicates that the payment is a loan and must be repaid
shall be sufficient verification. However, if the household receives
payments on a recurrent or regular basis from the same source but
claims the payments are loans, the provider of the loans may be required
to sign a statement which indicates that repayments are being made
or that payments will be made in accordance with an established repayment
schedule.
Income tax refunds, rebates,
or credits when paid as a lump sum benefit.
Tax refunds are exempt as a resource in the following twelve months.
Other payments, such as retroactive
cash assistance, unemployment compensation, Social Security, SSI,
or railroad retirement benefits. See 5430
(20) for special provisions regarding retroactive Social Security
or SSI benefits for the MS, QMB, LMB and QWD programs.
NOTE:
Retroactive SSI benefits in an amount that equals or exceeds 12
times the federal benefit rate to an eligible SSI individual are
paid in installments. The retroactive payments are paid in no
more than 3 installments and are made at 6-month intervals. Since
these installments replace what would have been paid a single
lump sum payment, installment payments for retroactive SSI
benefits are exempt as income. If SSA requires that the SSI lump
sum be placed in a separate account, the entire amount of the
lump sum shall be exempt, including any portion of the lump sum
that is for the current income month.
Lump sum insurance benefit,
including proceeds from crop insurance.
Refunds of security deposits
on rental properties or utilities.
Bonus or severance pay paid
in a lump sum after employment has been terminated.
Retroactive child support rebate
payments including CSS checks (URA) received by the client while
the TANF case is in open status.
VA pension benefit adjustments
paid in a lump sum.
Lump sum child support arrearage
payments. (If an arrearage is owed, child support payments paid
in excess of the current support obligation are considered an
arrearage.)
Excess insurance payments received through the Medicaid Program.
The one-time $250 Social Security, SSI, Railroad Retirement and Veteran's payments made as a result of the American Recovery and Reinvestment Act of 2009 (economic stimulus legislation). The legislation exempts these payments as income and also exempts them as a resource for the month of receipt and the following nine months.
The $1,000 payment received in lieu of TANF benefits under the Diversion Payment Program Option described in 1118. The payment is considered exempt as income and as a resource only in the month received.
Food Assistance - Monies
withheld from an assistance payment, earned income, or other income
source, or monies received from any income source which are voluntarily
or involuntarily returned to repay a prior overpayment received
from that income source, are exempt as income in the month received,
provided that the overpayment was not excludable at the time of
the original payment.
Monies withheld from assistance payments (e.g., TANF, SSI) shall
be included as countable income if the monies are withheld for
the purpose of recovering from a household an overpayment which
resulted from the household's fraudulent failure to comply with
a state, federal, or federally-assisted program which provides
assistance on the basis of financial need. (For a definition of
"fraudulent," refer to 11200).
Mandatory deductions from military
pay for educational purposes shall not be included as income (or
as a resource) while the individual is enlisted in the armed services.
If individuals enroll in an educational institution after they
leave the service, the amount withheld from salary plus any amounts
matched from the VA will be treated as countable educational income
minus expenses. Individuals who choose not to attend any school
will receive the withheld monies in a lump sum payment and the
payment shall be exempt per Lump Sums (above).
In addition, for all programs,
programs not based on financial need that have a portion withheld
to repay a prior overpayment received from that same income source,
such as SSA, VA, Unemployment or Workers Compensation shall not
have the portion withheld counted as income.
Food Assistance - Social
Security Disability benefits received pursuant to a Plan to Achieve
Self-Support (PASS Plan) are exempt as income in the month received
and as a resource in the following months. This exclusion is mandated
by P.L. 102-237 enacted 12-13-91. Any other unearned or earned
income placed into a PASS plan is also to be exempted.
Refugee Resettlement Program Funds (All Programs) - Match Grant funding and Reception and Placement (R&P) funding provided to individuals by a refugee resettlement agency are exempt as income in the month received and as a resource in the following month.
Rehabilitation Services Payments (All Programs) -
Income directly provided by Kansas Rehabilitation Services, except
as noted in 6315, is exempt as income
in the month received and as a resource in the following months. Maintenance
payments are also exempt as they are in excess of normal living expenses
and are considered a reimbursement.
All
Programs - Reimbursements for out-of-pocket expenses
are exempt as income in the month received and as a resource only
in the following month.
Examples of exempt reimbursements are ones for job or training-related
expenses such as travel, per diem, uniforms, and transportation
to and from the job or training site. Reimbursements which are
provided over and above the basic wages for these expenses are
excluded; however, these expenses, if not reimbursed, are not
otherwise deductible. Reimbursements for the travel expenses incurred
by migrant workers are also excluded.
Also exempt are medical and dependent care reimbursements, reimbursements
to students for specific education expenses such as travel or
books, and jury duty payments.
To be exempt, these payments must be provided specifically for
an identified expense other than normal living expenses and used
for the purpose intended. When a reimbursement, including a flat
allowance, covers multiple expenses, each expense does not have
to be separately identified as long as none of the reimbursement
covers normal living expenses.
For food assistance, reimbursements
for normal household living expenses such as rent or mortgage,
personal clothing or food eaten at home are a gain or benefit
and, therefore, are not exempted.
See 7227.1 for
instructions on the treatment of expenses covered by a reimbursement.
Renal Dialysis (All Programs Except Food Assistance)
- Special incentive payments received for renal dialysis
patients for care in their own home are exempt as income in the month
received.
Repair or Replacement Payments
All
Programs Except MS, QMB, LMB, QWD - Income from a one-time
payment or a portion of a one-time payment from a settlement for
repair or replacement of property or other settlement, including
legal services and medical insurance payments, when the settlement
is used for the intended purpose within 6 months of its receipt.
This income is exempt as income in the month received and as a
resource in the following 6 months.
MS,
QMB, LMB, QWD - Income from a one-time payment or a
portion of a one-time payment from a settlement for repair or
replacement of property or other settlement, including legal services
and medical insurance payments, when the settlement is used for
its intended purpose within 9 months of its receipt. The time
period for disposal of the settlement may be extended up to an
additional 9 months for good cause. The income is exempt as income
in the month received and as a resource for the following 9 months
(or an additional 9 months with good cause).
SCORE or ACE (All Programs) - Payments received
through Service Corps of Retired Executives or Active Corps of Executives
is exempt as income in the month received and as a resource in the
following months.
Senior Health Aides (All Programs) - Payments
received through Senior Health Aides or Senior Companions are exempt
in the month received and as a resource in the following months.
MS, QMB, LMB, QWD - The difference between the Social Security benefit entitlement in August 1972, and the entitlement in September 1972, for the following persons is exempt as income in the month received only if such exemption establishes eligibility without a spenddown.
- Persons who were receiving cash assistance through the programs of AABD or ADC in September 1972; and
- Who were entitled to a Social Security benefit in September 1972.
NOTE: There is no point in considering this exemption for single individuals unless the current OASDI benefit is between $280 - $384.
QMB, LMB - From January 1 of each year through the effective date of the new federal poverty level standards, the amount of an SSA cost-of-living adjustment (COLA) for the year for which the COLA is provided is exempt as income.
Spouse or Parent Income (MS, QMB, LMB, QWD) -
The income of an applicant/recipient's spouse or parent, which was
considered in determining the amount of a cash assistance (TANF or
SSI) payment if such spouse or parent is not applying for or receiving
MS, QMB, LMB, or QWD. The ineligible spouse or parent would still
be considered in the protected income level in MS.
SSI (All Programs Except Food Assistance) -
Income of an SSI recipient (including 1619(b) recipients) and retroactive
SSI benefits (even if the individual receiving the benefit is no longer
an SSI recipient) are exempt as income in the month received and as
a resource in the following months. This does NOT apply to persons
receiving long term care in Medicaid approved institutions as provided
in 8112).
Susan Walker v. Bayer (MS, QMB, LMB, QWD,) -
Payments made pursuant to a class settlement in the case of Susan
Walker v. Bayer Corporation are exempt as income in the month received
and as a resource in the following months. This case involved hemophiliacs
who contracted the HIV virus from contaminated blood products.
Interest earned on retained funds is not excluded and is countable
per Interest and Dividends (above). Accumulated
interest is also countable as a resource beginning the month following
the month of receipt, even if commingled with non-exempt funds.
Medicaid
Only - VA aid and
attendance benefits and house bound allowance payments are exempt
as income in the month received.
NOTE: See Educational Income (above)
regarding the treatment of VA Educational income.
MS,
QMB, LMB, QWD - In determining patient liability for
persons in nursing facilities, the amount of VA pension received
by a single veteran or surviving spouse with no dependents if
the pension has been reduced to $90 or less because the veteran
or spouse resides in a Medicaid-approved nursing facility is exempt
as income in the month received [see 8150
(3)].
All
Programs - Benefits paid to children of Vietnam veterans
who are born with spina bifida pursuant to Public Law 104-204
are exempt as income in the month received and as a resource the
following months.
All
Programs - Benefits paid to children of women Vietnam
veterans born with certain birth defects pursuant to Public Law
106-419 are exempt as income in the month received and as a resource
the following months.
Vendor
Payments (All Programs) - Money payments
that are not payable directly to a household but are paid to a third
party for a household expense are vendor payments and exempted as
follows (See 6220 (9) for countable
vendor payments.):
A payment made in money on behalf of a household
shall be considered a vendor payment whenever a person or organization
outside of the household uses its own funds to make a direct payment
to either the household's creditors or a person or organization
providing a service to the household. For example, if a relative
or friend, who is not a household member, pays the household's
rent directly to the landlord, the payment is considered a vendor
payment and is not counted as income to the household. Similarly,
rent or mortgage payments, made to landlords or mortgages by HUD
or by state or local housing authorities, are other examples of
vendor payments and are also exempted.
PA payments or other assistance
payments financed by state or local funds which are not made directly
to the household but paid to a third party on behalf of the household
to pay a household expense shall be considered an exempt vendor
payment and not counted as income to the household if such payments
are for:
Medical assistance;
Child care assistance;
Housing assistance payments
made to a third party on behalf of a household residing in
temporary housing, if the temporary housing provided for the
household lacks facilities for the preparation and cooking
of hot meals or the refrigerated storage of food for home
consumption.
PA or other assistance vendor payments financed
by state or local funds which are made on behalf of migrants
in the labor stream are exempt and not counted as income regardless
of the purposes of the vendor payments.
Payments in money that are not
made to a third party, but are made directly to the household,
are counted as income and are not excludable as vendor payments.
PA payments or other assistance
financed by state or local funds which are provided over and above
the normal PA grant or other assistance payment and would not
normally be provided in a money payment to the household shall
be considered emergency or special assistance and exempted as
income if provided directly to a third party for a household expense.
This rule applies even if the household has the option of and
receives a direct cash payment.