DHHS - CHIP Policy Manual
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OBSOLETE POLICY

CHIP MANUAL

 

402-4  Unearned Income Exclusions

Effective: April 1, 2013

Previous Policy

The following types of unearned income are not counted to determine eligibility.

  1. Bona fide loans.

A bona fide loan is a loan which has been contracted in good faith without fraud or deceit and genuinely endorsed in writing for repayment. This includes reverse equity loans. Reverse equity mortgages are considered loans to the homeowner. Under reverse equity mortgages, households may borrow money against the value of their home and receive lump sum, periodic, or monthly payments for a certain period of time. The mortgage holder will hold a lien on the property until repayment is made. Repayment can be when: 1) the house is sold; 2) the house is turned over to the mortgage holder; or 3) the owners die and repayment is taken from the settlement of the estate. 

 

Interest earned on funds and received under a loan which is placed in a savings account is countable income.

 

  1. Special Circumstance Items. Do not count special circumstance items paid for by donors. These include guide dogs, house repairs, medical services, etc.

  1. Food Programs. Do not count the value of Food Stamps, WIC vouchers, surplus food donated by the USDA, supplemental food assistance received under the Child Nutrition Act of 1966, or the National School Lunch Act.

  1. Benefits received under Title VII, Nutrition Program for the Elderly of the Older Americans Act of 1965.

  1. Child Support Payments.  Regular child support or child support arrearages.

  1. Taxable interest income received if less than $500 per calendar year.

  1. Payments or reimbursements made to volunteers under the Retired Senior Volunteers Program, the Foster Grandparent Program and Green Thumb as established under the Older Americans Act of 1965.

  1. Payments or reimbursements made to individual volunteers under VISTA, Senior Health Aides, SCORE, Senior Companions and ACE, programs. (Section 418 of Public Law 93-113.)

  1. Rental Subsidies and Relocation Assistance.  This includes:

A.     Payments received under the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970.

B.      Federal Relocation Allowances paid because of missile testing.

C.     Rental and utility subsidies resulting when a public housing authority applies the 30% of income to rent ratio authorized by the Brooke Amendment to the Housing Act of 1937.

D.     Relocation assistance from a state or local government.

 

  1. Payments from Trust funds that are not available.

If an individual is a beneficiary to a trust, but does not have direct access to the funds, only count the payment amounts the trust actually pays to the individual.  Do not count payments made to third parties for the benefit of the individual.

If the individual owns a revocable trust which produces income, the income earned by the trust assets is countable income even if it is not paid to the individual as long as the person must claim the income on his tax returns. 

 

  1. Energy Assistance (HEAT) and/or utility payments made by other agencies.

  1. Payments for Attendant Care from the Division of Services for People with Disabilities (DSPD) if the money is used to pay for attendant care, AND the person providing the care is not financially responsible for the person receiving the care.

  1. Income Tax Refunds and Tax Credits - Do not count any state and Federal tax refunds or tax credits as income.

  1. Agent Orange Settlement Payments.

  1. Travel and Training Allowances and Reimbursements which are directly related to training, schooling or volunteer activities.

  1. Transportation Tickets such as airline, train, or bus tickets.

  1. Special Payments to American Indians/Alaska Natives.

  1. Exclude from income, money received by American Indians/Alaska Natives that are derived from ownership interest in rents, leases, royalties or usage rights related to the extraction of natural resources resulting from the exercise of federally protected rights.  These may be paid to individual Indians or as per capita payments paid by the tribe.  Natural resources include things such as minerals, oil, natural gas, coal, plants, animals or fish.  Also exclude from income per capita payments the Secretary of the Interior or an Indian Tribe distributes when the Secretary held the funds in trust.  This includes Golden Age and Senior Retirement payments made by the Ute Indian Tribe.

Tribal money paid to the Ute Indian Tribe is reported on an account known as the “IIM Account” (Individual Indian Money.)  (Other tribes may also use IIM accounts.)  IIM accounts will be verified by customer statement. Money paid to these accounts may include per capita payments, Oil and Mineral Leases, and income from Individual Interests in lands or resources held by the tribal member.  Per capita payments paid to the account are exempt when the funds were held in trust by the Secretary of the Interior.

  1. Funds held in trust include interest and investment income earned on the funds while they are in trust.

  2. Do not exclude per capita payments that tribes distribute from funds not held in trust by the Secretary.  Examples are revenues from tribal run businesses such as:

  1. Exclude payments received under the Individual Indian Account Settlement Litigation, Pub. L. 111-291.

  1. Payments made under the Alaska Native Claims Settlement Act, Public Law 92-203.

  2. Payments made under the Maine Implementing Act and the Maine Indian Claims Settlement Fund, Section 9 of Public Law 96-240.

  3. Tribal benefits received by the following Indian tribes under section 5 of Public Law 94-114:

TRIBE

RESERVATION

Bad River Band of the Lake Superior Tribe of Chippewa Indians of Wisconsin

BadRiver

Blackfeet Tribe

Blackfeet

Cherokee Nation of Oklahoma

 

Cheyenne River Sioux Tribe

Cheyenne River

Crow Creek Sioux Tribe

Crow Creek

Lower Brule Sioux Tribe

Lower Brule

DevilsLake Sioux Tribe

FortTrotten

Fort Belknap Indian Community

FortBelknap

Assiniboine and Sioux Tribes

FortPeck

Lac Courte Oreilles Band of Lake Superior Chippewa Indians

Lac Courte Oreilles

Keweenaw Bay Indian Community

L'Anse

Minnesota Chippewa Tribe

White Earth

Navajo Tribe

Navajo

Ogallala Sioux Tribe

Pine Ridge

Rosebud Sioux Tribe

Rosebud

Shoshone Bannock Tribes

Fort Hall

Standing Rock Sioux Tribe

Standing Rock

  1. Monies received by American Indians/Alaska Natives that are derived from ownership interest in rents, leases, royalties or usage rights related to the extraction of natural resources resulting from the exercise of federally protected rights are not counted as income.  This applies, regardless of the tribe to which the American Indian/Alaska Native belongs.

  1. Tribal General Assistance Payments.  Tribal General Assistance Payments may be made by either the Bureau of Indian Affairs (BIA) or from tribal funds.  Find out the source of the payments being made to the individual.  Assistance payments from the BIA (or which include federal funds from the BIA) are countable income for CHIP.  Do not allow the $20 disregard from General Assistance payments from the BIA.  Assistance payments directly from the tribe consisting only of tribal funds do not count as income. Request documents verifying the source of the payments or contact BIA or the tribe.

  1. Disaster Relief Funds received under the Federal Disaster Relief and Emergency Assistance Act or other assistance provided under a federal statute because of a catastrophe which is declared a major disaster by the President of the United States. Also exclude funds received from a State or local government, or a disaster assistance organization that are paid to an individual due to a major disaster as ordered by the President.

  2. Payments from settlements paid to Hemophilia Patients (and others) infected with HIV under a Class Action Suit. 

      A number of class action suits have been filed on behalf of persons with hemophilia who became infected with HIV from blood products received between 1978 and 1985, and others such as spouses and children who were infected by persons with hemophilia with HIV. A settlement agreement has been made. The companies involved have agreed to make settlement payments to persons in this class or to the representatives of such persons in the event such person is deceased. The original class action suit is called “Susan Walker v. Bayer Corporation, et al, “ 96-C-5024 (N. D. III.)

Nazi persecution reparation payments including payments made by the Federal Republic of Germany, Austrian Social Insurance payments and Netherland WUV payments.

  1. Japanese-American and Aleutian Restitution payments.

  2. Victim’s Compensation payments.

  3. Radiation Exposure Compensation Trust Fund payments.  Some individuals may also qualify for the Energy Employees Occupation Income Compensation Program. (See #32 below.)

  4. Reimbursements for expenses paid for by an individual.

  5. Reimbursements of Medicare premiums from the Social Security Administration or the State Department of Health.

  6. Child Care Assistance payments received through the Department of Workforce Services. (Title XX)

  7. The following Veterans Benefits:

  1. Payments made by the Veteran's Administration for Aid and Attendance or Housebound Care.

  2. VA Payments for Veteran’s Children Born with Spina Bifida or other Birth Defects.  The Department of Veterans Affairs may make monthly payments to veterans, or to the child of the veteran, because the veteran’s child was born with Spina Bifida or certain other birth defects.  This applies to male and female Vietnam and Korean War veterans when the child’s birth defects have a causal link to the veteran’s exposure to Agent Orange or other chemical herbicides used in the locations where the veteran was serving.  These payments do not count as income for CHIP.

  3. The portion of a VA payment that is for unusual medical expenses, (an amount added to a VA payment to pay for specific medical expenses of the veteran).

  4. State Annuities for Certain Veterans.

 (See Sec. 402-2 for more information on VA payments.)

  1. Death benefits to the extent that they are spent on the deceased person’s last illness and funeral/burial expenses. If some portion is not to be spent on the last illness or funeral/burial expenses, count it only if the benefits are or will be received during the certification period.

  2. Unearned income in-kind such as rental payments made by a non-household member directly to the landlord.

  3. Unearned income of a child who is not the head of household.  See Section 401-3

  1. Income Excluded Under a PASS Plan.  Do not count income of an SSI recipient which has been excluded under an approved PASS Plan.  A PASS Plan is a plan for achieving self-support that a disabled or blind person may enter into with Social Security.  Request a copy of the plan to verify what income Social Security and the individual have agreed to disregard and for what time period.  See Glossary for definition.

  2. Workforce Investment Act. Do not count income paid by programs funded under the Workforce Investment Act (WIA) if it is not paid as wages. Payments for day care or social services is not countable income.

  3. EEOICP (Energy Employees Occupational Illness Compensation Program) - See Glossary.

  1. Policy for Treatment of Payments

  1. Verify the EEIOCP Payment