Unearned Income 510-05-85-15

(Revised 10/1/04 ML #2939)

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(N.D.A.C. Section 75-02-02.1-37)

 

 

Unearned income is income that is not earned. Unearned income which is received in a fixed amount each month shall be applied in the month in which it is normally received. For example, Social Security benefits received in January will be applied against January need.

 

  1. Recurring unearned lump sum payments received after application for Medicaid are prorated over the number of months the payment is intended to cover. When a payment is received and prorated in an ongoing case, or after a period of Medicaid eligibility, and the case closes and then reopens during the prorated period, or within the following proration period, the lump sum payment must continue to be used. This prevents cases from being closed temporarily to avoid using the lump sum income. All other recurring unearned lump sum payments received before application for Medicaid are considered income in the month received and are not prorated.

  2. All nonrecurring unearned lump sum payments, except health or long-term care insurance payments, veterans administration aid and attendance, veterans administration reimbursements for unusual medical expenses, and Veteran’s Administration homebound benefits intended for medical expenses, must be considered as income in the month received and assets thereafter.

  3. If an individual has a life insurance policy that allows him or her to receive the death benefit while living and the individual meets the insurance company's requirements for receiving such proceeds, the individual will not be required to file for such proceeds. If, however, the individual does file for and receive the benefits, the payment will be considered income in the month it is received and available as an asset if held into following months.

  4. Income only becomes an asset in the month following the month it is counted as income.

Example 1: An annual recurring lump sum payment of $6000 is received in January and is prorated at $500 per month. In January, none of the $6000 is considered an asset. In February, if any portion of the $500 of January income is retained, it becomes an asset, but the remaining $5500 is not. In March, only $5000 is not an asset, and so on.

Example 2: A nonrecurring lump sum payment of $5000 is received in May, and is considered May income. Any amount of the $5000 that remains in June is an asset because it has already been counted as income.

  1. Types of unearned income include but are not limited to:

  1. Income from pension and benefit programs, such as Social Security, Railroad Retirement, veteran’s pension or compensation, unemployment compensation (including disaster assistance unemployment compensation), employee or individual pension plans and annuities, union compensation during strikes, Workforce Safety & Insurnace, etc.

These benefits are to be considered in the full amount awarded within the Medicaid unit. However, when a mandatory deduction for taxes is withheld, the benefit is reduced by those deductions (see 05-85-05(1) for policy on how to treat Social Security overpayments);

  1. Voluntary cash contributions from others;
  2. Court ordered or voluntary support payments and alimony;
  3. Income from a life estate;
  4. Income from rental of rooms, apartments, or other property except that income from room rentals is considered "earned" if the recipient is actively engaged in the venture by such means as making the bed, changing linens, cleaning the room, etc. The first $25 of income from each roomer is exempt to defray any associated expenses;
  5. Student income received from the Veterans Administration through the GI Bill, except that verified school expenses (tuition, books and fees) may be deducted;
  6. Money received by the Medicaid unit as a result of a benefit or fundraiser. (Money that is received and disbursed by a third party for the benefit of the Medicaid Unit is considered an in-kind contribution);
  7. Mineral lease income (count as income in the month received);
  8. Royalty income;
  9.  Conservation Reserve Program (CRP) program payments, less expenses, such as seeding and spraying necessary to maintain the CRP land in accordance with the CRP contract;
  10. Cooperative payments
  11. Interest payments received as a result of converting an asset (i.e. contractual right to receive money payments);
  12. Stipends received to attend an educational facility or training (other than those stipends specifically excluded for victims of domestic violence in 05-85-30, subsection 30);
  13. Payment of proceeds or profits to enrolled tribal members from tribal gaming/gambling establishments; and
  14. Payments, not otherwise disregarded in section 05-85-30 (relates to income from leases and trust or restricted funds for non-LTC and Medicare Savings Programs), that are deposited in Individual Indian Monies (IIM) accounts by the Bureau of Indian Affairs (BIA).

Payments received in either the past twelve months or in the most recent full calendar year may be used to estimate the current IIM payments. If the applicant or recipient demonstrates, by furnishing lease documents or reports, that the deposit amount will be substantially different, current payments may be determined by totaling all payments likely to be made in the twelve-month period beginning with the month in which the lease arrangement changed.

Because the first $2000 per year of income received from leasing of privately owned or restricted Indian lands is disregarded as income for individuals who are not residing in LTC facilities, client statement is acceptable verification of the amount in the IIM account unless one of the following applies:

  1. The balance of the account is more than $2000;
  2. The client statement information is questionable;
  3. The deposits include countable income such as inheritances, bonuses, or any other income that is not derived from leases, and trust or restricted lands; or
  4. The individual resides in a LTC facility.

When additional verification is necessary, the following three options are available:

  1. A request for verification, using SFN 413, Individual Indian Monies Account.  The form must be notarized before it will be accepted by the BIA, and is valid for one year.
  2. Individuals with IIM accounts receive quarterly statements.  A copy of the statement can be requested from the individual.
  3. The individual may obtain a statement of the individual's IIM account directly from the Office of Trust Funds Management through the BIA by requesting the information in person or by making a telephone request.  The individual will need to know the account number and provide at least two forms of identification.

IIM account ledgers have columns for:

  1. Debit, which is amounts paid out of the account and which do not affect eligibility; 
  2. Credit, which is amounts put into the account. This column is used to establish the amount of countable IIM for the year. Consider all deposits for the twelve-month period being looked at and subtract any per capita payments or judgment funds distributed by the Secretary of the Interior, subtract per capita payments distributed by the local tribe, and subtract other non-lease moneys deposited in the accounts. The remaining balance is the lease payments to which the $2,000 disregard is applied; and 
  3. Balance, which is the amount still in the account. This amount is what is currently in the account and is considered an asset. (This balance may not be available to children under age 18 if they cannot access the account.)