Income Excluded by Federal Law 430-05-50-30

(Revised 12/01/08 ML3164)

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The following is a partial listing of income that is excluded by federal law. Contact the Regional Representative if assistance is needed in determining whether other types of income are excluded.

  1. The value of assistance to children under the Child Nutrition Act of 1966 (child care nutrition programs).
  2. The Domestic Volunteer Services Act of 1973, Titles I and II, as amended.

 

Payments under Title I of that Act, including payments from such Title I programs as VISTA, to volunteers for those individuals receiving food stamps or TANF at the time they joined the Title I program.

 

Payments to volunteers under Title II, including the Retired Senior Volunteer Program (RSVP), Foster Grandparents Program and Senior Companion Program.

  1. Americorps income is excluded.  Americorp VISTA income is only excluded if the individual was receiving Food Stamps at the time they joined Americorp VISTA.
  2. Homestead tax credits including rental refunds.  
  3. Payments paid as a result of an emergency or major disaster as defined in the Disaster Relief Act of 1974 or the Disaster Relief & Emergency Assistance Amendments of 1988. This includes Federal Emergency Management Assistance (FEMA) payments and Emergency Unemployment Benefits.

 

A major disaster is any natural catastrophe regardless of fault, any fire, flood, or explosion that the President determines causes damage of sufficient severity and magnitude to warrant major disaster assistance.

 

An emergency is an occasion or instance for which the President determines that federal assistance is needed to save lives and protect property and public health and safety.

Exception:

Payments made when there is no major disaster or emergency are not excluded.

  1. Agent Orange Compensation Exclusion Act payments or all payments from the Agent Orange Settlement fund which are distributed by the Aetna Insurance Company.

Exception:

Payments from the Veteran’s Administration for service connected disabilities resulting from exposure to agent orange are not excluded.

  1. Earned Income Tax Credit payments are excluded for the month of receipt and the following month. If the individual was participating at the time of receipt, the exclusion continues for as long as they remain participating up to a maximum of 12 months. Breaks of one month or less due to delayed recertifications are not considered as nonparticipation in determining the 12-month exclusion.
  2. Allowances paid to children of Vietnam veterans who are born with spina bifida.
  3. Allowances paid directly or indirectly on behalf of a household by LIHEAP.
  4. Any allowances, earnings, or payments received under WIA.

Exception:

Earnings to individuals participating in an on-the-job training programs under Title I of WIA over the age of 19 or under the age of 19 who are not under parental control.

  1. Funds received by persons 55 and older under the Senior Community Service Employment Program Title V of the Older Americans Act are excluded from income. The organizations that receive some Title V funds are as follows:
  1. Department of Housing and Urban Development (HUD) vendor payments for rent or mortgage paid to landlords or mortgagors. HUD Section 8 Housing Voucher Program payments that are paid to the household are also excluded.  
  2. Women, Infants, and Children (WIC) Program.
  3. Payments or allowances made for the purposes of providing energy assistance, including utility reimbursements made by the Department of Housing and Urban Development (HUD), Rural Housing Service, and Tribal Utility Payments including Tribal LIHEAP.
  4. This includes a one-time payment or allowance applied for on an as needed basis and made under a Federal or State law for the costs of weatherization or emergency repair or replacement of an unsafe or inoperative furnace or other heating or cooling device. A down-payment followed by a final payment upon completion of the work will be considered a one-time payment for this provision.

Exception:

Any payments or allowances made for the purpose of providing energy assistance under Title IV-A (TANF) are counted as unearned income.

  1. Income that is excluded by express provision of federal statute for American Indians or Alaska Natives. Usually a law will specify payments to members of a tribe or band, and the law will apply to the members enrolled in the tribe or band wherever they live. The individuals should have documentation showing where the payments originated. These payments include, but are not limited to the following:

  1. Indian per capita payments distributed from judgment awards and trust funds up to $2,000 per person per payment. Amounts in excess of $2,000 are considered a countable asset.
  2. Interests of Indians in trust or restricted lands.
  3. Up to $2,000 per year of Individual Indian Monies (IIM) received by individual Indians which is derived from leases or other uses of individually owned trust or restricted lands.

Exception:

The $2000 exemption does not apply to inheritance, bonuses, and other income that is not derived from leases, trust or restricted land.

 

Client statement is acceptable verification of the amount in an IIM account unless:

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

 

  1. Monies made available to a household by an absent member deployed to a designated combat zone must be excluded when establishing the household’s income for food stamp purposes as follows:
  2. The worker must establish what amount of the military person’s net pay was actually available to the household prior to the deployment of the military person to a designated combat zone. The line of thinking here is that we would only count the absent person’s pay that was actually available to the food stamp household (net income).  

Keep in mind that the net income is used only if the military person was in the food stamp household prior to deployment to a combat zone.  If the military person was NOT in the food stamp household prior to deployment, the amount actually made available to the food stamp household is counted as unearned income.

  1. The worker must then determine the amount of his or her military pay that the absent member deployed in a designated combat zone is making available to his or her family.

If the amount of his or her military pay that the absent member deployed in a designated combat zone is making available is equal to or less than the amount the household was receiving from the military person prior to deployment to a designated combat zone (net income), all of the allotment would be counted as income to the household for food stamp purposes. Any portion of the amount that exceeds the amount the household was receiving prior to deployment of the military person to a designated combat zone should be excluded when determining the household’s income for food stamp purposes.

 

In order to arrive at this amount, the worker must review the last LES (Leave and Earnings Statement) of the military person immediately prior to deployment. The LES will identify combat pay if it is being received and can be used to establish deployment to a combat zone. Deployment to a combat zone can also be established through orders issued to the military person.

 

Example:

A food stamp household that included a military person was receiving $900.00 (net income) prior to deployment to a designated combat zone.  The military person is now providing $1,400.00 to the remaining household members.  When determining the household’s income for food stamp purposes, $900.00 would be counted and $500.00 is excluded.  

 

Designated Combat Zones

Combat zones are designated by an Executive Order from the President as areas in which the U.S. Armed Forces are engaging or have engaged in combat. There are currently three such combat zones (including the airspace above each):

 

Public Law 104-117 designates three parts of the former Yugoslavia as a Qualified Hazardous Duty Area, to be treated as if it were a combat zone, beginning Nov. 21, 1995 -- Bosnia and Heruegovina, Croatia, and Macedonia.

 

In addition, the Department of Defense has certified these locations for combat zone tax benefits due to their direct support of military operations, beginning on the listed dates:

 

In support of Operation Enduring Freedom (Afghanistan combat zone):

 

In support of Operation Iraqi Freedom (Arabian Peninsula Areas combat zone):