No Previous Policy
A. Sources of earned income include (but are not limited to):
Most taxable earned income is countable for CHIP (440-4).
1. Wages and salaries. This includes holiday, sick and vacation pay that the employer pays. Payments to employees paid on a contractual basis that is not self-employment are treated like wages or salaries. (See 440-4 about deductions for health insurance premiums.)
a. Wage advances are counted as income when received, not when the paycheck is received showing a deduction for the advance.
b. Deferred wages are wages that are received later than their normal payment date. Examples of wages that may be deferred include vacation pay, dismissal or severance pay, back pay, bonuses, etc.
i. If the deferred wages are taxable income and will be received sometime during the certification period, count the income as part of the individual's income. Prorate the amount over the certification period.
ii. If an individual's wages are deferred by depositing them into a 401K account, or into a non-taxable account like a Health Savings Account, those wages would not be counted in the household taxable income.
2. Commissions.
3. Tips as reported by the individual. Do not count allocated tips as income. The allocated amount is the amount reported by the employer to IRS based on gross receipts of the business.
4. Training incentive payments and work allowances. Determine the source of the payments to decide if it is counted as income.
5. Profits received from self-employment, including earnings over a period of time for which payment is received at one given time. Examples include payment to independent contractors, poultry raised for sale or bought for resale. (See 413-6 for information about types of businesses; and 419-3 for information about determining countable self-employment income.)
6. Capital gains received from the sale or transfer of assets used in self-employment. This includes gains received from the sale of (a) farmland or depreciable farm equipment; (b) livestock held for breeding, sport or dairy purposes; (c) securities; (d) real estate; or (e) other investment property.
7. Rental Income. Rental income is countable income (415-4 and 419-3).
8. Severance Pay includes the cash out of holiday, vacation, and sick pay received when a person terminates a job. Treat severance pay as terminated income, not as a lump sum (421).
9. AmeriCorps and the National Civilian Community Corps. CNCS also administers the AmeriCorps program and the new National Civilian Community Corps (NCCC) program. AmeriCorps includes community service projects such as educational programs, environmental activities and disaster relief. The NCCC program is a residential service program for young adults aged 18-24 who participate in various community service projects. Some payments are earned income; others are unearned income in-kind. Count payments from either of these programs as follows:
a. Living allowance stipend. Count as earned income for all Family-related Medicaid program, both the MAGI-based groups and the medically needy groups.
· As of 9/1/2008, this income is exempt for aged, blind and disabled programs.
b. Educational award after completion of service. An individual may receive an educational award that would be paid directly to an educational institution or to a loan-holder to pay off an educational loan.
· For CHIP, the educational award does not count as income if it is used to cover educational expenses.
· In some cases, the individual may choose to receive an alternative award equal to one-half of the educational award. It is paid directly to the individual. If an individual receives the alternative award as a cash payment, count it as earned income.
c. Food and Shelter. Any in-kind food and shelter benefits received are exempt for aged, blind and disabled and all Family-related Medicaid programs (413-1).