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, Permanent Custodianship 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.
- 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).
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.
The current support reported by CSS and treated as nonexempt
income results in TANF ineligibility (see 6220);
A person has been sanctioned for noncooperation. In such
instances, assigned support retained by a person during the sanction
period for noncooperation shall be counted as income.
An arrearage payment that is not retained by DCF and is
forwarded to the client with the exception of prospective support
received in the application processing month. (see 2164
and 7124.2) This does not include
prospective support received after TANF approval in the application
processing month.
NOTE: This exemption does not apply to arrearage
payments paid for a child whose current support order has ended.
These payments are not considered child support payments and are
considered the income of the person receiving the payment.
This exclusion does not apply to emancipated
minors or to unemancipated minors determined to act in own behalf
per 2112 (2). For TANF and Food Assistance,
exclusions continue to apply during temporary vacation breaks, provided
the child’s enrollment will resume following the break.
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.
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.
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.
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.
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.
In-kind Income (All Programs) - In-kind benefits are exempt as income in the month received.
Interest and Dividends
(All Programs) - Interest and Dividend income that does
not exceed $50.00 per month is exempt as income in the month received.
If in excess of that amount, the full amount shall be counted.
Dividends earned on life insurance policies are exempt in full. Interest
earned on additional insurance purchased with dividends is also exempt.
Unless specifically excluded, accrued interest and/or dividends are
countable resources the month following the month of receipt.
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.
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.
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.
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.
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.
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.
Public Assistance 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.
Public Assistance 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.
Public Assistance payments or
other assistance financed by state or local funds which are provided
over and above the normal Public Assistance 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.