402-4  Unearned Income Exclusions

Effective: March 1, 2010 - June 30, 2010

Previous Policy Reference

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.

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

3. 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.

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

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

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

7. 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.

8. 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.)

9. 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.

10. 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. 

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

12. 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.

13. Income Tax Refunds - Refunds of federal or state income taxes do not count as income.  Tax refunds that include refundable tax credits such as the Earned Income Tax Credit and Child Tax Credit are excluded from countable income.  Refunds received under the 2008 Economic Stimulus Package are not counted as income.

14. Agent Orange Settlement Payments.

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

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

17. Special Payments to American Indians.

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

NOTE: Tribal money paid to American Indian tribes is reported on an account known as the "IIM Account." Money paid on these accounts is either per capita payments or Oil and Mineral Lease income.  Per capita payments are exempt under item #B listed below. The first $2,000 received by each individual in a calendar year from Oil and Mineral Leases is also exempt income. Any income from Oil and Mineral Leases in excess of $2,000 is countable income. Also, the interest from Oil and Mineral leases is countable income.

B.      All per capita payments made to tribal members by either the Secretary of Interior or the tribe. The sources of the money for these payments are varied. They include, but are not limited to, money from judgments, trust lands, lease income from tribal funds, and tribal businesses.  Also excluded are Golden Age and Senior Retirement payments made by the Ute Indian Tribe. Income derived from privately owned land is countable income.

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

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

18. 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.

19. 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.

20. Japanese-American and Aleutian Restitution payments.

21. Victim’s Compensation payments.

22. Radiation Exposure Compensation Trust Fund payments.  

23. Reimbursements for expenses paid for by an individual.

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

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

26. Needs Based Veterans Pensions.  (See Section 402-2 for rules for counting pensions that are not needs-based)

27. 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.

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

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

30. Economic Recovery and Reinvestment Act of 2009

1. • Do not count the one time $250 Economic Recovery payments received by Social Security, SSI, Railroad Retirement, Veteran’s Benefits recipients and government retires not issued under Social Security.

   • Do not count the additional $25 per week unemployment compensation. The additional $25 per week began March 1, 2009 and ends June 30, 2010.

   • Do not count as income the one-time payment to Filipino veterans who aided American troops in World War II (Filipino Veterans Equity Compensation Fund).  Interest earned on any unspent funds is also excluded income.  The income is available to eligible person from February 17, 2009 through February 16, 2010.

31. 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.