Countable Unearned Income types 400-19-55-20-15

(Revised 8/1/11 ML #3272)

View Archives

IM 5126

 

The types of unearned income listed below are counted in their entirety when determining TANF eligibility:

1. Retirement, Survivors, and Disability Insurance  - Retirement, Survivors, and Disability Insurance (RSDI) is administered by the Social security Administration. This program provides workers and/or their families with partial replacement for loss of income due to retirement, disability, or death of the insured person.

Because of the broad coverage offered under RSDI, an exploration of a household's potential eligibility for benefits must be made whenever the employment history or other pertinent data suggest the possibility of entitlement.

 

A Beneficiary Data Exchange (BENDEX) and State Data Exchange (SDX) have been designed to provide TANF Eligibility Workers with prompt and accurate social security benefit entitlement information from the Social Security Administration. (For further information regarding these two interfaces, see Service Chapter 449-45-20 and 449-45-25.)

 

Additionally, private pensions may be available to assist families with partial replacement for loss of income due to retirement, disability, or death of an employed person. TANF requires that all-potential sources of income for earned rights benefits be explored by the household.

Note: Lump sum retroactive adjustment payments from Social Security due to changes in an individual’s earnings record will be considered as follows: 

• If the individual received SSA benefits AND had earnings in the year prior to the adjustment payment, the adjustment payment will be considered a recurring lump sum benefit.
• If the individual did not receive Social Security OR did not have earnings in the calendar year prior to the adjustment payment, the adjustment payment will be considered a non-recurring lump sum.

2. Railroad Benefits - Benefits can include payments for sickness or accident, dependent or survivors' benefits, job insurance, retirement, and funeral expenses. In order to attain a fully insured status and qualify for benefits, an individual must have a minimum of 120 months of railroad employment with 40 full quarters of coverage (10 years).

Applicants for and recipients of TANF with backgrounds in railroad employment must, whenever appropriate, be referred to the Railroad Retirement Board for an exploration of possible benefits. The Railroad Retirement Board is located in Room 219, Post Office Building, 657 Second Avenue North, Box 383, Fargo, North Dakota 58107. Information about railroad retirement benefits may be obtained by forwarding a written request to the Railroad Retirement Board at the Fargo address.

3. Workforce Safety and Insurance (WSI), Unemployment Insurance Benefits (UIB), Disaster Unemployment Benefits, and VA Benefits – Workforce Safety and Insurance Benefits, Unemployment Benefits, Disaster Unemployment Benefits, and Veteran’s Benefits must be considered in determining the TANF benefit.

Since WSI and UIB benefits are also paid on an Electronic Benefits Card, income is considered received on the date:

1. The income is received; or
2. When available and the recipient has a legal ability to access the income for support or maintenance.   

If the household cannot determine the date of receipt, the receipt date is:

1. The date funds were deposited into the account based on a bank statement from U.S. Bank or their personal bank account; or
2. Two working days after the date on a WSI or UIB check.

4. Public or Private Disability Payments – Disability insurance coverage is designed to provide assistance to individuals who are injured, ill, or disabled and unable to work by paying them all or a portion of their salaries.  A private disability insurance type of coverage can be obtained through an employer or through the purchase of a private insurance. These plans can provide short-term and long-term disability coverage or both. (e.g. State of North Dakota Disability benefits, AFLAC, CIGNA, Thrivent, etc.)

 

5. Cash Contributions and Cash Gifts --

Cash contributions, regular and irregular, will be counted as unearned income and deducted dollar for dollar from the benefit. This will also include voluntary or court ordered support paid directly to the family by a responsible person or legally responsible obligor.

Note: A responsible person is someone who is not yet subject to a court order or someone who has not been legally adjudicated as the father of the child. A legally responsible obligor is someone who is subject to a court order for support.

 

Cash Gifts - Cash received by household members for special occasions such as birthdays, graduation, confirmation, Christmas, etc. are considered to be complementary in nature and will be disregarded up to $500 per month per household. The cash gift must be related to a special occasion. If the cash gift is not related to a special occasion, it will be counted as a cash contribution and deducted dollar for dollar.

6. Continuing Education and Job Training through PATH, Inc. - Continuing Education and Job Training funds through PATH, Inc., a private agency, are money payments that are to be used for rent, school supplies and other living costs.  Since this is used to meet the same basic needs as those provided under TANF, these payments are considered unearned income and not disregarded as a student educational assistance.

7. Voluntary or Court-Ordered Support Payments -  If child support received or assigned during the first prospective month results in ineligibility, the application must be denied.

After initial TANF eligibility is established and authorized, support payments are normally paid to the Department of Human Services. The automated computer system generates a child support alert informing the TANF Eligibility Worker that child support has been paid to the State Disbursement Unit.

 

If child support received or assigned during the second prospective month results in ineligibility, the case must be closed effective the last day of the first prospective month. The household shall be advised to notify the TANF Eligibility Worker if child support for the second prospective month is not received by the last workday of the month.

 

If the household notifies the TANF Eligibility Worker by the last workday of the month following the effective closing date that child support was not received or was received in a lesser amount, the case shall be reverted to open without a new Application and eligibility redetermined based on the new information.

Example: A case is closed effective June 30 (the last day of the first prospective month) due to anticipated child support. The household must contact the TANF Eligibility Worker by the last workday of July if child support is not received or received in a lesser amount.  If reported by the last workday of July, the case must be reverted to open and eligibility redetermined for July, based on the new information.

 

If the household fails to contact the TANF Eligibility Worker by the last workday of the month following the effective closing date, a new application is required. The case must be budgeted prospectively for the first two months and benefits are prorated from the date of the application or date of eligibility, whichever is later.

1. Child Support Received by the Household - Child support payments received by a household prior to the date the case is authorized must be counted when determining eligibility and the TANF benefit.  This income, along with any child support that can be anticipated to be received in the initial two months (whether or not it is assigned to the State), must be considered when determining eligibility. If the household is financially eligible, only the child support received is counted when determining the TANF benefit.  

Note: Any child support received by the TANF recipient on behalf of a benefit cap child or a child subject to Pay After Performance (PAP) requirements is considered unearned income to the household.

 

Child Support Enforcement defines the collection month of a Child Support Payment as the date on which the payment is received by the State Disbursement Unit. Any child support received by the household during the first two prospective months which Child Support Enforcement has credited as a prior months collection is not considered countable income when determining eligibility. For that reason, special care should be taken to identify the collection month on any support received early in either of the initial months.

 

When retrospectively budgeting, countable child support income is considered received on the date:

1. The income is received; or
2. When available and the recipient has a legal ability to access the income for support or maintenance.   

 

If the household cannot determine the date of receipt, the receipt date is:

1. The date funds were deposited into the account based on a bank statement from U.S. Bank or their personal bank account; or
2. Two working days after the date on a child support check; or
3. Two working days after the date in the 'Check Date' field on the "View Eligibility Worker Ledger Details" screen in FACSES.

 

Any support collected for the current month by a Clerk of Court, the State Disbursement Unit, an out-of-state collection system, or other disbursement agency which is received and retained by the household after authorization of the application is subject to recovery by the Child Support Enforcement program. If the TANF Eligibility Worker becomes aware the family has received support, the family should be advised that the support must be turned over to Child Support Enforcement program and the TANF Eligibility Worker should notify the State Disbursement Unit of the specific situation. Retention of assigned child support by the household and a failure to turn over such payments may be referred to the appropriate authority for investigation for welfare fraud. Any retained support should be considered as child support assigned.

 

Voluntary or court ordered support received directly from a responsible or legally responsible obligor after the case is authorized and is retained by the family is treated as a cash contribution, is unearned income, and will be deducted dollar for dollar from the TANF benefit. The TANF Eligibility Worker is responsible for establishing overpayments if this type of unearned income occurs.

Note: A responsible person is someone who is not yet subject to a court order or someone who has not been legally adjudicated as the father of the child. A legally responsible obligor is someone who is subject to a court order for support.

After the initial two months of eligibility, any child support received by the household which is intended for a month in which the family was not in receipt of TANF benefits is treated as a cash contribution.  Cash contributions are considered unearned income and deducted dollar for dollar from the TANF benefit.

2. Extra Child Support Received by Household  - Extra child support received by a TANF recipient is deducted dollar for dollar from the TANF benefit. Extra money is support received by the State Disbursement Unit, which exceeds the total unreimbursed public assistance.
3. Child Support Retained Offset - Federal law governs the distribution of child support payments.

For a family who is receiving a TANF cash benefit, all support collected that does not exceed the monthly obligated amount for all months the family received TANF must be retained and applied against any UPA.  Current support collected which exceeds the total of all the monthly obligated amounts for all months the family received TANF is paid to the family.

Example: A family has $100  child support owing for the months of January and February, while in receipt of TANF.  The family continues to be eligible for TANF and the absent parent pays $500 support in March.  The total UPA for January, February and March is $250.  The state retains $250 of the $300 owed for January, February and March and pays $50 to the family.  The remaining $200 is also paid to the family.

8. Proceeds Paid to Tribal Members - Any proceeds from tribal gaming, gambling establishments, or tribal enterprises distributed to enrolled tribal members (residing on or off a reservation) must be considered unearned income. Payments made to enrolled tribal members from the proceeds of gaming or gambling businesses are not per capita payments; therefore the income cannot be disregarded. (e.g. Three Affiliated Tribal Elderly Payments, Spirit Lake Social Impact Payments) etc;
9. Gaming or Gambling Winnings - Gaming or gambling winnings from games of chance, such as slot machines, video machines, bingo, poker, black jack, pull tabs, etc. must be considered a non-recurring lump sum payment subject to the asset limitations in the second month following month of receipt. However, if a person receives any of the above on a regular basis, the income is counted as unearned income in the month of receipt.
10. Individual Indian Monies (IIM) - Income received from Individual Indian trust or restricted lands will be counted as income.  This includes leases on individually owned or restricted Indian lands. The income generally comes from interests in lands allotted to individual Indians many years ago. Income to individual Indians generated by these interests are likely to be small because many of the original interests are allotted lands which have been fractionalized due to the inheritance of multiple heirs over several generations. Incomes included in the accounts are payments from range unit leasing, farm leases, oil leases, oil rental, gravel pit contract, sales, royalties etc.

The Omnibus Budget Reconciliation Act of 1993 provides that up to $2,000 per year of this income must be disregarded. Funds in the IIM accounts that do not have a specific exclusion must be counted for TANF. Other moneys deposited in the accounts, such as inheritances, VA, SSA, SSI, gaming profits, etc. are not part of the $2,000 exclusion.

 

Beginning January 1, 2003, client statement is an accepted verification of the amount in an IIM account unless one of the following applies:

1. The amount is more than $2000 for the year;
2. The client statement information is questionable; or
3. The IIM account includes countable income such as inheritance, bonuses, and other income that is not derived from leases, trust, or restricted land.

 

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 recipient. However, the 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.

At the time of application, verification of the deposits into the IIM account for the 12 month period prior to the month of application must be obtained.   Deposits such as inheritances, VA, SSA, SSI, gaming profits, etc. must be deducted and the remaining amount divided by 12 to determine the monthly countable income for the next 12 months.

 

For on-going cases, a review of the IIM account is required on a yearly basis, when a child turns 18 years of age, when adding an individual to a case, and when the amount in the account reaches the maximum allowable amount or is questionable.  Countable income is pro-rated over a 12 month period.  Any of the verification options identified above may be utilized to obtain the information.  

 

New Source Income

When new source income is deposited into an individual’s IIM account, the countable amount for TANF 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 identified above.  Once verification of the IIM account is received, any deposits that will not be counted as IIM income will be subtracted (inheritances, VA, SSA, SSI, gaming profits, etc.). The most current month’s countable new source income (or an average if received for multiple months) will be multiplied by 12 and added to all countable deposits for the 12-month period (excluding the new source income deposited into the IIM account). The $2000 disregard will be subtracted and the remaining balance divided by 12 to determine the monthly countable unearned income.   

Example #1: In 02/2009, the TANF Eligibility Worker learns that the individual began receiving a new source income in 02/2009 through their IIM account. The TANF Eligibility Worker will request verification of the IIM account for the period of 02/01/2008 thru 02/28/2009 (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 TANF 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 (02/01/2008 thru 01/31/2009) totals $1,500.  The total of 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 07/2009 and the TANF Eligibility Worker requests verification of the IIM account for the period of 07/01/2008 thru 06/30/2009, the most recent FULL 12 month period.

 

Reviewing the ledger, the TANF Eligibility Worker determines a new source income began to be deposited in 04/2009.  The TANF 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 ($9860.04 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.

 

Once a determination of the countable income has been made, TANF must begin counting the income when received and budgeted consistent with the individual’s budget methodology.

11. Refugee Cash Assistance Payments – Payments received under the Refugee Cash Assistance Program or the Wilson/Fish Alternative Program, received by any member of a TANF household must be considered as unearned income in the calculation of TANF benefits for that household.
12. Stipends/Subsistence Payments - Any stipend/subsistence payment received while attending training that is specifically identified to cover the cost of daily living expenses must be counted as unearned income, as it is intended to cover the same basic needs as those provided under TANF.
13. State Long Term Care Subsidy – Individuals receiving a payment of up to $20 from the State Long Term Care Subsidy Program.
14. Workforce Investment Act (WIA) - The Job Training and Partnership Act (JTPA) was replaced with the Workforce Investment Act (WIA) effective July 1, 2000. WIA reformed federal job training programs and created a new, comprehensive workforce investment system. All JTPA participants were grandfathered into WIA. Job Service North Dakota administers this program.

The groups covered under WIA are as follows:

• Low income workers – workers on assistance (SNAP, Medicaid, and TANF) or below the poverty level. This group includes the teens working in the summer program.
• Dislocated workers – farmers, homemakers, etc.
• Adult Program – employed adults who have not attained self-sufficiency.
• Youth Program – the program includes activities that promote youth development and citizenship, such as leadership development through voluntary community service opportunities; adult mentoring and follow-up; and targeted opportunities for youth living in high poverty areas. WIA does make payments to these individuals.

 

Many of the programs offered are needs based assistance, on-the-job training, work experience activities, summer employment, and educational training.

 

WIA income received by adult TANF household members, minor parents, and children not attending school full-time is considered earned income and used to determine the TANF benefit. WIA income, earned or unearned, is disregarded when received by a dependent child under the age of 18, or age 18, and a full-time student in elementary or high school, GED course of study, alternative high school or in a vocational or technical school that is equivalent to secondary school if, before attaining age 19, such student can reasonably be expected to complete the training curriculum.

15. YouthBuild - Income received by adult TANF household members, minor parents, and children not attending school full-time is considered earned income and used to determine the TANF benefit. YouthBuild income, earned or unearned, is disregarded when received by a dependent child under the age of 18, or age 18 and a full-time student in elementary or high school, GED course of study, alternative high school or in a vocational or technical school that is equivalent to secondary school if, before attaining age 19, such student can reasonably be expected to complete the training curriculum.