Unearned Income 400-28-65-10-40

(Revised 10/1/11 ML #3278) 

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NDAC 75-02-01.3-07

 

Unearned income is income not gained by current labor, service, or skill. Most unearned income is the result of past labor, services, or investments, which have enabled the individual to receive a current benefit or pension. Unearned income for both caretakers and children who must be included in the Child Care Assistance unit must be counted.

 

The types of income listed below are examples of unearned income and must be considered available in their entirety (unless it is determined to be a nonrecurring lump sum):

1. Child/Spousal Support payments - Child Care Assistance Program (CCAP) requires use of Fully Automated Child Support Enforcement System (FACSES) if the child support is disbursed through the State Disbursement Unit (SDU).

    

   The Eligibility Worker should use the View Eligibility Ledger Detail screen in FACSES to verify the amount of payment actually released to the caretaker.

    

   If child support is received through SDU via check, direct deposit or electronic payment card (EPC), the eligibility worker must allow three working days from the check date shown on the View Eligibility Ledger Detail (VIEW) screen in the FASCES system for posting to the financial account to correctly determine when the income is received. Day one of the three-day count is the check date on the VIEW screen in FACSES.

   NOTE: If a check is posted on the FACSES system on either of the last two working days of the month, it is counted as income for the following month as it will not be received by the individual until the month following.

   For payments not processed through FACSES, day one of the three day count is the date on the check or child support statement.

    

   If the child support cannot be verified through FACSES, hard copy verification must be obtained from the caretaker.

    

2. Retirement, Survivors, and Disability Insurance - Benefits paid through the Social Security Administration , Veterans benefits, pensions from all sources such as Railroad, North Dakota Old Age and Survivors Insurance System, private pensions, Workforce Safety and Insurance, Unemployment Compensation, union compensation during strikes, mineral leases, military allotments, royalties, disaster unemployment benefits, general assistance, Three Affiliated Tribal elderly payments, etc.;

   Note: Veteran’s benefits designated for a specific purpose such as tuition, fees, books, etc. is not counted.

 

3. Supplemental Security Income (SSI)

 

4. Loss-of-time private insurance or disability income - Loss-of-time private insurance or disability income paid for the loss of employment due to illness.

 

5. Rental Income – Rental payments received without an appreciable amount of personal involvement and effort provided as a service to the tenant.

   Note: Property taxes, interest on mortgage loans, and insurance premiums for coverage of potential loss on the rental property can be allowed as a deduction from the rental income.

Lease payments made to persons for the use of lands occupied or owned by those persons unless the lease specifically provides for monthly payments or unless the lease is for a total term of less than one year.

 

6. Mineral Lease Income - Mineral lease rentals, bonus payments and royalties.

 

7. Dividends and interest – Dividend and interest income received from investments and insurance, but not from checking or savings accounts.

 

8. Individual Indian Monies – Non-excluded lease payment income deposited in and disbursed through Individual Indian Monies accounts maintained by individual Indians by the Bureau of Indian Affairs as proceeds from the lease of lands held by the federal government in trust for the Indian;

Individual Indian Monies (IIM) will be prorated over a twelve-month period; (i.e., the income from the previous twelve months prior to application will be prorated over the twelve months following application). IIM up to $2000 per year from lease of land is exempt. Other IIM is countable.

When new source income is deposited into an individual’s IIM account, the countable amount will be determined as follows:

Verification of the IIM account must be obtained for the most recent Full 12 month period through one of the three options currently identified in policy. Once verification of the IIM account is received, the eligibility worker will subtract any deposits that cannot be counted as IIM income, such as inheritances, VA, SSA, SSI, gaming profits, etc., based on current policy. Once those deposits have been subtracted, take the most current months, or an average if received for multiple months, new source income amount and multiply by 12. That amount must be added to all countable deposits for the twelve-month period (excluding the new source income deposited into the IIM account), deduct the $2000 disregard, and then divide the remaining balance by 12 to determine the monthly countable unearned income.

Example #1: In 02/2009, the eligibility worker learns that the individual began receiving a new source of income in 02/2009 through their IIM account. The eligibility worker will request verification of the IIM account for the period of February 1, 2008 thru February 28, 2009, the most recent FULL 12 month period, plus the current month of 02/2009, to capture the amount of the new source income.

Reviewing the ledger, the Eligibility worker would determine which income is countable. The new source income deposited in February was $850. Multiplying $850 by 12 equals $10,200. The countable income, not including the new source income, for the FULL 12 month period (February 1, 2008 thru January 31, 2009) totals $1,500. The total income to be considered for the 12-month period is $11,700 ($10,200 plus $1,500). After deducting the $2000 disregarded amount from $11,700, $9,700 must be annualized and the monthly amount of $808.33 counted as unearned income.

Example #2: A new application is received in July and the eligibility worker requests verification of the IIM account for the period of July 1, 2008 thru June 30, 2009.

Reviewing the ledger, the Eligibility worker determines a new source income began to be deposited in April 2009. The Eligibility worker would first determine which income is countable. The new source income deposited in April was $850, in May was $790 and in June was $825. The three months of the new source income would be totaled and divided by 3 and the average would be projected for a 12 month period ($2,465 divided by 3 equals $821.67). Multiplying $821.67 by 12 equals $9,860.04. The countable income, not including the new source income, for the 12 month period totals $87.29. The total of income to be considered for the 12-month period is $9,947.33 ($9,860.04 plus $87.29). After deducting the $2000 disregard from $9,947.33, $7,947.33 must be annualized and the monthly amount of $662.28 counted as unearned income.

 

Verification Options

There are three options by which verification may be obtained:

1. Request for verification of IIM account information using form SFN 413, Individual Indian Monies Account. This form will need to be notarized per requirements of the United States Department of the Interior, Office of the Special Trustee for American Indians, Office of Trust Funds Management. These releases are valid for one (1) year and must be renewed annually.
2. Individuals with IIM accounts receive statements from the Office of Trust Funds Management on a quarterly basis. A copy of this form may be requested from the applicant or recipient. However, the applicant or recipient will not receive the statement if the Office of Trust Funds Management does not have a current address.
3. The individual may obtain a statement of their IIM account directly from the Office of Trust Funds Management through the Bureau of Indian Affairs (BIA) by requesting the information in person or by making a telephone request. In both cases, the individual will need to know their account number and provide at least two forms of identification.

9. Conservation Reserve Program (CRP) payments - When a CRP contract is set up the full payment may be received by the landlord or operator, or a portion of the payment may be paid to a tenant of the farm. A portion of the payment is allowed to be paid to a tenant when the tenant was farming the land, or had an interest in the property (i.e. was on the previous contract), in the year before the contract was signed. The CRP contract specifies the amount of the payment and to whom the payment is made. For purposes of determining eligibility, only count the share the applicant or recipient receives per the CRP contract.

Allowable expenses are those allowable costs of doing business that are claimed on the applicant or recipient’s tax return, including property taxes and insurance as a deduction.

 

10. Alaskan Dividend payment

 

11. Tribal gaming distribution payments

 

12. Tribal Spirit Lake Social Impact Payments - Tribal Social Impact Payments (i.e. Spirit Lake Social Impact payments) are from Tribal gaming. The recipient receives the income annually and it is prorated over a 12 month period.

 

13. Fund Raising - Moneys received as a result of a fund raiser for individual tragedies if the family receives the funds directly.

 

14. BIA General Assistance

 

15. Trust income received on a regular basis - Submit all trusts to the Legal Advisory Unit for review and identify who is applying for assistance, send a complete copy of the trust agreement, provide verification of all assets owned by the trust, and provide any other relevant documents or information.

 

16. Money from friends, relatives or others - These funds are counted as unearned income if the money does not need to be repaid. If the money must be repaid, a written agreement must have been created at the time the money was received.

 

17. Contracts or Contracts for Deed Installment - Payments a household is receiving from an installment contract or contract for deed are considered unearned income. These payments must be prorated over the period of time they are intended to cover.