Revision 24-2; Effective April 1, 2024

Resources are assets or possessions that are either countable or exempt, depending on the program and Type of Assistance (TOA) . There are liquid and nonliquid resources. Liquid resources are those that are readily available, such as cash, checking or savings accounts, debit accounts, savings certificates, stocks, or bonds. Nonliquid resources are those that cannot be readily converted to cash, including vehicles, buildings, land, or certain other property. Count the equity value of all resources, liquid and nonliquid, unless otherwise specified or listed as exempt. The equity value is the fair market value (FMV) of an item minus all money owed on the item and the cost associated with the item’s sale or transfer.

Count resources of:

an alien's sponsor;

disqualified people;

stepparents in TANF households;

members of the TANF certified group;

members of the SNAP EDG ; and

children on TP 32 and TP 56 EDGs.

If payments exempted as resources are kept in a separate account, those payments remain exempt. If the money is placed in an interest-bearing account, the interest must be counted as income in the month received. If the money is combined with money that is countable, exempt the excluded funds for six months from the date the funds are combined. After six months, the total amount of combined funds should be counted as an available resource.

Related Policy

Resources of an Alien’s Sponsor, A-1245 Resources of Stepparents, A-1247

Categorical eligibility extends to any household authorized to receive services funded by the TANF program. The TANF non-cash (TANF-NC) program offers various services such as family planning, adult education, prevention and treatment of substance abuse, and employment services. Households must pass an income and resource test for determination of categorical eligibility based on receipt of TANF-NC services.

To meet the resource test, the household’s countable liquid resources plus excess vehicle value must be $5,000 or less. The excess vehicle value can be:

Up to $22,500, of the FMV for the highest valued countable vehicle is exempt. The excess over $22,500 FMV is counted toward the combined resource limit.

Up to $8,700 FMV for all other countable vehicles is exempt. The excess over $8,700 FMV is counted toward the combined resource limit. Note: Refer to vehicle policy for more reasons a vehicle can be exempted.

Once the recipient is authorized for TANF-NC services based on the initial resource test, all other nonliquid resources are exempt. Regular TANF policy must be followed when determining countable liquid resources within TANF-NC. Most resources are not applicable to SNAP.

Limits, A-1220 Prepaid Burial Insurance, A-1233.2 Vehicles, A-1238 How to Determine Fair Market Value of Vehicles, A-1238.5 General Policy, A-1310 Categorically Eligible Households, B-470 What to Report, B-621

Resources are not considered a factor in determining eligibility.

Resources are considered as a factor in determining eligibility for children on TP 56 and TP 32.

Exception : Do not consider resources when determining a newborn’s eligibility for TP 56 when the newborn’s mother was eligible for TP 56 or TP 32 at the time of the newborn’s birth.

Revision 15-4; Effective October 1, 2015

An individual must pursue all resources to which the individual is legally entitled unless it is unreasonable to pursue the resource. Advisors should develop a plan with the individual to pursue the potential resource and allow reasonable time (at least three months) to pursue the resource.

Advisors should use the comment section of Form TF0001, Notice of Case Action, to inform the individual of the requirement to pursue the resource, including the time the individual has to pursue it, and the resource is not considered available during that time.

If the individual does not pursue the resource within a reasonable time, the Eligibility Determination Group (EDG) is denied.

Exception: The individual does not have to pursue a resource if it would be unreasonable. It is unreasonable to pursue a resource if any of the following conditions exist:

The cost to the individual to pursue the resource exceeds the potential resource's value or causes the individual financial hardship;

Pursuing the resource would endanger the individual's health or safety; or

Legal action is required, but a private attorney or legal service refuses to accept the case. The individual must make a reasonable effort to obtain legal assistance.

Individuals receiving SNAP benefits do not have to pursue resources.

Note: Pursuing resources could help an individual become self-sufficient, and individuals should be provided examples of resources they might be entitled to receive.

Revision 13-2; Effective April 1, 2013

Revision 15-4; Effective October 1, 2015

Households are ineligible if, within three months before application or any time after certification, the household transfers a countable resource for less than its fair market value to qualify for assistance. This penalty applies if the total of the transferred resource added to other resources affects eligibility.

Resources transferred between members of the same TANF/SNAP household do not affect eligibility. If spouses separate and one spouse transfers individual property, the other spouse's eligibility is not affected.

Applicants or individuals who transfer resources to qualify for assistance must not be denied.

Revision 15-4; Effective October 1, 2015

In determining an individual's intent for transferring resources for TANF and SNAP benefits, staff must consider the following:

How recent was the transfer of property? A recent transfer may indicate the household transferred the resource to qualify for benefits.

How did the applicant support the household after transferring the resource? If the applicant was self-supporting or supported by the person who received the property, then the applicant's intent was to have support rather than qualify for benefits.

How did the applicant transfer the property? If the applicant loaned the property but cannot recover its value after making a reasonable effort, the applicant is eligible.

Special or unpredictable hardships that prevent the individual from making payments for the transferred resource do not affect eligibility. The supervisor and program manager must approve these situations.

Revision 24-2; Effective April 1, 2024

Base the length of denial on the amount of the transferred resources that exceed the resource maximum when added to other countable resources.

Amount in Excess of Resource Limit Denial Period $.01 to $249.99 1 month $250 to $999.99 3 months $1,000 to $2,999.99 6 months $3,000 to $4,999.99 9 months $5,000 and more 12 months

Examples:

TANF: A two-person household has $1,250 in a bank account and transfers ownership of a car worth $5,650. Exempt the first $4,650 of the vehicle’s FMV and add the remaining $1,000 to the$1,250 bank account. Subtract the $1,000 resource limit from the total. Use $1,250 to determine the number of months of ineligibility. The household is ineligible for six months.

SNAP: A two-person household has $2,000 in a bank account and transfers ownership of a car worth $26,500. Exempt the first $22,500 of the vehicle’s FMV and add the remaining $4,000 to the $2,000 bank account. Subtract the $5,000 resource limit from the total. Use $1,000 to determine the number of months of ineligibility. The household is ineligible for six months.

Revision 15-4; Effective October 1, 2015

The denial period begins in the application month unless the household is already certified when the advisor discovers the transfer.

Once the household is certified, the advisor must send a notice of adverse action and follow adverse action procedures. The advisor must begin the denial period the first month after the month the notice of adverse action expires unless the individual requests a fair hearing and receives continued benefits.

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Revision 15-4; Effective October 1, 2015

A household is not eligible for benefits if the total value of accessible resources is over $1,000.

A household is not eligible for benefits if resources are over the limit on or after the first interview date.

If a TANF applicant/recipient fails to provide resource verification for TANF, the advisor must:

deny the TANF application, and

process the application for non-public assistance (NPA) SNAP eligibility.

A household is not eligible for benefits if the total value of countable resources (liquid resources and excess vehicle value) is over $5,000.

A household is not eligible for benefits if resources are over the limit on or after the first interview date. Additionally, striker households are ineligible if resources are over the limit the day before the strike.

A child is not eligible for benefits if the total value of accessible resources is over:

$3,000 in households with a member who is aged or has a disability and meets relationship requirements; or

$2,000 for all other households.

Advisors must use the SNAP definitions of aged and disability found in B-431 , Definition of Elderly, and B-432 , Definition of Disability. The individual who is aged or has a disability does not have to be part of the Medical Programs budget group, but must meet relationship requirements.

A child is not eligible for benefits if resources are over the limit on the process date. In determining eligibility for a prior month, the household is not eligible if resources are over the limit anytime during the prior month.

General Policy, A-1210 Prepaid Burial Insurance, A-1233.2 Vehicles, A-1238 How to Determine Fair Market Value of Vehicles, A-1238.5 General Policy, A-1310 Categorically Eligible Households, B-470

Revision 15-4; Effective October 1, 2015

There are differences between TANF, Medical Programs and SNAP in countable and exempt income.

Income that is not specifically listed in this section must be counted.

Revision 13-2; Effective April 1, 2013

Revision 15-4; Effective October 1, 2015

Agent Orange Settlement Payments disbursed by AETNA Insurance Company and paid to the following individuals are exempt:

veterans with disabilities exposed to Agent Orange while in Vietnam who suffer from total disabilities caused by any disease, and

survivors of these deceased veterans.

These veterans receive yearly payments. Survivors of these deceased veterans receive a lump-sum settlement payment.

VA payments are counted as unearned income, including benefits paid to veterans with service-connected disabilities resulting from exposure to Agent Orange. See A-1324.20 , Veterans Benefits.

Lump-Sum Payments, A-1331

Revision 16-4; Effective October 1, 2016

Disability insurance benefits are normally paid to an individual who has suffered injury or impairment. These payments may be from an employer, insurance provider, or other public or private fund. Advisors must determine the source of the benefit.

If the source is covered by an income type listed in A-1320 , Income Types, such as RSDI [see A-1324.16 , Retirement, Survivors and Disability Insurance (RSDI)], the procedures for that benefit must be used.

If the source is not covered by another income type listed in A-1320, the policy listed below must be used.

Count as unearned income .

Disability insurance benefits are exempt.

Revision 15-4; Effective October 1, 2015

Payments from the Radiation Exposure Compensation Act (the “Act”), Public Law 101-426, are exempt.

The Act established a program to pay damages to individuals for injuries or deaths caused by exposure to radiation from nuclear testing and uranium mining. When the affected individual is deceased, the surviving spouse, children, parents, grandchildren, or grandparents receive the payments.

Revision 15-4; Effective October 1, 2015

The gross benefit is counted as unearned income, less amounts:

recouped for a prior worker's compensation overpayment ; or

paid for attorney's fees. Note: The Texas Workers' Compensation Commission (TWCC) or a court sets the amount of the attorney's fee to be paid.

A deduction from the gross benefit for court-ordered child support payments is not allowed.

Exception: Worker's compensation benefits paid to the individual for out-of-pocket medical expenses are considered as reimbursements.

All workers’ compensation payments are exempt.

Revision 13-2; Effective April 1, 2013

Revision 15-4; Effective October 1, 2015

Educational assistance, including educational loans, scholarships, fellowships, grant monies, and work study, are exempt, regardless of the source. Loans for education, including loans from relatives or other people, are considered as educational assistance only if payment is deferred.

Educational assistance is:

any financial aid for vocational or educational courses from: an organization (such as fraternal, alumni, etc.); or a government program or agency (such as the U.S. Office of Education or Department of Veterans Affairs).

provided to students who are enrolled in a: program that provides for completion of a secondary high school diploma or the equivalent (such as a general equivalency diploma [GED]); school for people with intellectual or physical disabilities; or post-secondary institution.

Note: "Post-secondary" includes institutions of higher education and others not requiring a high school diploma (such as community colleges and vocational educational programs) authorized by the state to provide educational or training programs beyond secondary education.

The U.S. Office of Education under Title IV of the Higher Education Act administers most educational assistance programs. A few examples of the most common Title IV educational assistance grants include:

Pell Grants,

Stafford Loan Program,

Parent Loans for Students (PLUS Loans),

Supplemental Educational Opportunity Grants,

College Work Study, and

Carl D. Perkins Loans (Title IV, Part E) (formerly National Direct Student Loans).

The National Community Services Act (NCSA) program also provides educational assistance. Individuals are awarded from $1,000 to $4,000 per year of completed services to apply toward past or future educational expenses. The educational award is not counted, as it is always made payable directly to the financial institution or institution of higher learning.

The Department of Veterans Affairs administers education programs designed for veterans, reservists, members of the National Guard, and their widows and orphans. These include:

Montgomery GI Bill (MGIB) Active Duty Educational Assistance Program,

Vocational Rehabilitation,

Post-Vietnam Era Veterans' Educational Assistance Program (VEAP),

Survivor's and Dependent's Educational Assistance (DEA), and

MGIB - Selected Reserve Educational Assistance Program.

Educational Assistance, A-1239

Revision 03-7; Effective October 1, 2003

Revision 15-4; Effective October 1, 2015

Temporary employment of six months or less for disaster-related work, paid under the Workforce Innovation and Opportunity Act and funded by the National Emergency Grant, is exempt.

All WIOA payments are exempt.

All WIOA payments are exempt except on-the-job training (OJT) payments funded under the Workforce Innovation and Opportunity Act. OJT payments are counted as earned income for adults.

OJT payments are exempt if received by a child who is under:

age 19, and

under parental control of another household member.

Government Disaster Payments, A-1324.3

Revision 15-4; Effective October 1, 2015

Portions of payments earmarked as reimbursements for training-related expenses are exempt, and any excess is counted as earned income.

Revision 13-2; Effective April 1, 2013

Revision 24-3; Effective July 1, 2024

Follow policy for who is included in a TANF household. Count a dependent child 's earned income unless the child attends school:

full-time, including a home-schooled child; or

part-time enrolled and employed less than 30 hours a week.

Exception : Refer to related policy concerning the Workforce Innovation and Opportunity Act (WIOA).

Count a dependent child's earned income unless the child:

is under 18;

attends elementary, middle or high school, including home schooling and general equivalency diploma (GED) classes; and

lives with a natural or adoptive parent, a stepparent or other household member with parental control in the SNAP household.

Exception : Refer to related policy concerning the WIOA.

Who Is Included, A-221 Workforce Innovation and Opportunity Act (WIOA), A-1322.2.1 Verification Sources, A-1641

Breaks in school attendance, such as summer vacation and holidays, do not change the student status of a child. Verify the child's enrollment will continue following the break.

If the child's earnings cannot be separated from other household members' earnings, divide the total earnings equally by the number of working members.

Exempt a child's earned income from the MAGI household income.

Income Limits and Eligibility Tests, A-1341

Revision 05-5; Effective October 1, 2005

Contractual earnings are wages and salaries only. Self-employment income , unearned income , or income received on an hourly or piecework basis are not included. The two basic types of contractual earnings are:

Seasonal employment — available only during certain months of the year and recurs each year. Examples: school-related employment, certain types of farm work, and summer or winter employment. Divide seasonal employment that is a household's annual means of support over 12 months. If the income supports the household for only a portion of the year and the household has income from other sources the rest of the year, average the earnings over the time they are intended to cover.

Contractual employment — nonseasonal employment that is contracted for a specific time and does not recur. Divide earnings over the time covered by the contract.

Revision 20-2; Effective April 1, 2020

Budget contractual earnings monthly by:

dividing the total gross amount earned under the contract by the number of months the contract covers or by 12 months, whichever is applicable; and

adding this amount to any other income, and budgeting according to usual procedures.

Note: If the person does not receive the income agreed to in the contract, or if income is interrupted because of participation as a striker in a work slow-down or stoppage, do not budget the contractual earnings using the steps above since the person cannot reasonably anticipate receiving the contractual income. For strikers, follow policy in A-1367.1 . If the person's employment situation changes and contractual earnings resume:

recalculate the income or adjust the benefits accordingly; and

document all the facts that caused the recalculation or adjustment.

How to Project Income, A-1355 Strikers, A-1367 Eligibility of Strikers, A-1367.1

Revision 15-4; Effective October 1, 2015

Military pay and allowances for housing, food, base pay, and flight pay is counted as earned income less pay withheld to fund education under the G.I. Bill.

An allotment is a specified amount of money from each paycheck of the military wage earner that is designated to go to someone else. Military allotments are counted as unearned income.

Revision 15-4; Effective October 1, 2015

The Family Subsistence Supplemental Allowance is a monthly payment made to certain low-income service members and their families so they will not have to depend on SNAP to meet their needs. The service members' pay statements usually include the FSSA and are counted as earned income.

FSSA payments are exempt.

Revision 15-4; Effective October 1, 2015

All of the combat payments, also known as hazardous duty payments, received by a legal parent who is a member of the U.S. military, absent solely because the individual has been deployed to a combat zone, are counted.

Any portion of military pay identified as combat pay, including any portion of combat pay contributed to a household from military personnel deployed to a combat zone, is excluded.

The advisor must determine whether any funds contributed to the household by military personnel, such as through joint bank accounts or military allotments, are considered combat pay. Any portion identified as combat pay is exempt from income. The following steps should be used to determine the amount of military income to exclude as combat pay:

Steps Action 1. Verify the monthly amount of combat pay received, as required in A-1370 , Verification Requirements. 2. Determine the amount of military pay the deployed individual was making available to the household before deployment to the combat zone. If the deployed person was: a household member before deployment, the amount would be the individual's net military pay. not part of the household before deployment, then consider any amount made available from the individual's pay before deployment. 3. Determine the amount of military pay the deployed individual is making available to the household after deployment to the combat zone. 4. If the amount of contribution the household receives from the military personnel after deployment: is equal to or less than the amount the household was receiving before deployment, then none of that contribution would be considered combat pay. Count the full amount of the contribution as unearned income. exceeds the amount received before deployment, exclude the excess as combat pay (not to exceed the verified monthly amount of combat pay) and count the remainder (if any) as unearned income.

Combat (hazardous duty) payments are exempt.

Who Is Included, A-241.1 Verification Requirements, A-1370 Glossary, Combat Pay and Combat Zone

Revision 12-4; Effective October 1, 2012

Self-employment income is usually income from one's own business, trade, or profession rather than from an employer. However, some individuals may have an employer and receive a regular salary. If an employer does not withhold income taxes or FICA, even if required to do so by law, the person is considered self-employed.

Advisors must inform households in writing to keep self-employment records and receipts for verification purposes for future recertifications. Form TF0001, Notice of Case Action, contains the self-employment information.

Note: If a household has self-employment income and meets the streamlined reporting criteria, assign a six-month certification period.

Revision 15-4; Effective October 1, 2015

Types of self-employment include:

odd jobs, such as mowing lawns, babysitting, and cleaning houses;

owning a private business, such as a beauty salon or auto mechanic shop;

farm income;

income from property; and

independent contracting.

Revision 15-4; Effective October 1, 2015

Income from renting, leasing, or selling property on an installment plan is self-employment income . Property includes equipment, vehicles, and real property .

Income from property is counted as:

earned if the: person spends an average of at least 20 hours a week in management or maintenance activities; or income is from noncommercial boarding situations.

unearned if the person spends an average of less than 20 hours a week in management or maintenance activities.

Work-related expenses are allowed for earned income. For unearned income , only the expenses associated with producing the income should be deducted.

If the individual sells property on an installment plan, the payments are counted as income. The balance of the note is exempted as an inaccessible resource.

Income from renting, leasing, or selling property on an installment plan is counted as self-employment income.

Revision 15-4; Effective October 1, 2015

The noncommercial roomer/boarder policy is used if a noncertified household member makes payments to a certified member under a formal or informal landlord/tenant relationship. Payments made by boarders for room, meals, and other shelter expenses are counted. Payments made by roomers for room and other shelter expenses are counted.

See A-1323.4.5 , Allowable Costs of Producing Income, to determine the countable amount of noncommercial roomer/boarder payments. If there is not a formal or informal landlord/tenant relationship, the policy in A-1326.1 , Cash Gifts and Contributions, applies.

Roomer/boarder status should not be given to:

anyone whose income can be applied to the certified group; or

a dependent child who is an ineligible alien .

To be considered a boarder, a person residing with the household must pay reasonable compensation for meals and lodging. Reasonable compensation is:

the amount of the full allotment for the number of boarders if the boarders eat an average of more than two meals a day with the household; or

two-thirds of the full allotment for the number of boarders if the boarders eat an average of two meals a day or less with the household.

In determining "reasonable compensation," only the amount paid for meals is counted if it can be separated from lodging.

If the individual chooses to include a boarder as a household member:

all of the boarder's income, resources and deductions are counted; but

the payment from the boarder is not counted as income since it is transferred between household members.

If the individual chooses not to include a boarder as a household member:

the boarder's income, resources, or deductions are not included in the household; but

the payment from the boarder is counted as self-employment income for the household.

The noncommercial roomer/boarder policy is used when an individual in the MAGI household composition receives payments from someone in their physical household under a formal or informal landlord/tenant relationship. Payments made by boarders for room, meals, and other shelter expenses are counted as self-employment income. Payments made by roomers for room and other shelter expenses are counted as self-employment income.

See A-1323.4.5 , Allowable Costs of Producing Income, to determine the countable amount of noncommercial roomer/boarder payments. If there is not a formal or informal landlord/tenant relationship, the policy in A-1326.1 , Cash Gifts and Contributions, applies.

Nonmembers, A-232.1

Revision 16-4; Effective October 1, 2016

If the household receives self-employment income monthly or more often (such as semi-monthly, bi-weekly, weekly or daily), recent self-employment pay amounts may be used to project income.

If the household had self-employment income for the past year that was received less often than monthly, the income figures from the previous year's business records or tax forms, including the IRS Schedule C-Form 1040- Profit or Loss from Business, may be used if the records are anticipated to reflect current self-employment income and expenses.

Exceptions:

If the previous year's records do not accurately represent the household's current self-employment income because the household has experienced a substantial increase or decrease in business, anticipate income using more current information such as updated business ledgers or day books, or contact people who have similar businesses.

If the business is new and there is insufficient information to make a reasonable projection based on last year's records, anticipate earnings and expenses using only the recent business records along with the individual's statements about expected income and expenses and any applicable information from collateral sources.

If the income terminates before completing the EDG, budget actual income and expenses for the month the income terminates.

For Children’s Medicaid programs (TP 43, TP 44, TP 45 and TP 48), the previous year’s business records or tax forms are acceptable, no matter the pay frequency.

When calculating self-employment income, the financial profit from a sale or transfer of capital goods, possessions (such as products, raw materials, equipment), or ownership of a business, must be considered.

Financial profit from the sale or transfer of capital goods that the household expects to receive in the next 12 months should be added and the total averaged over 12 months. This averaged amount should be used for each certification period within the next 12 months, unless a new average is computed because the person received a profit from the sale or transfer of capital goods that was unanticipated or a different amount than anticipated.

New applicants who have not received TANF, Medical Program coverage, or SNAP for a period of three consecutive months before the application month, or new household members who have not received benefits for three months before moving into the household, may not have been keeping accurate records of self-employment income and expenses. The policy in C-932 , Advisor Responsibility for Verifying Information, should be used to obtain verifications needed to determine eligibility and what types of verification are readily available to the household. Any business records that are available for use (even if this documentation is for a short period of time) should be accepted, in addition to the individual's statement and any proof that might be available from a collateral source, as sufficient proof.

The advisor must verify:

at least the last two recent pay amounts when determining the amount of self-employment income received monthly;

at least four consecutive recent pay amounts when determining the amount of self-employment income received more often than monthly, such as semi-monthly, bi-weekly or weekly; and

at least four consecutive weeks for self-employment income received daily.

The individual is not required to provide verification of self-employment income and expenses for more than two calendar months before the interview date for income received monthly or more often.

The applicant's statement is accepted as proof if:

there is a reasonable explanation why documentary evidence or a collateral source is not available; and

the applicant's statement does not contradict other individual statements or other information received by the Texas Health and Human Services Commission (HHSC).

Exception: If the business is new and there is insufficient information to make a reasonable projection, the income is calculated based on anticipated earnings and expenses.

The advisor must inform the household in writing to keep self-employment records and receipts for verification purposes for future recertifications. Form TF0001, Notice of Case Action, contains the self-employment information.

If the individual applies for three months prior Medicaid, the following should be budgeted in each prior month:

actual income and expenses for self-employment income received monthly or more often, or

projected monthly average amount for self-employment income received annually or seasonally.

For income received less often than monthly, only information from the period of time since HHSC last requested verification of self-employment needs to be verified. Verification that was previously verified is not needed (see C-932 ). Verification is needed for:

at least the last two recent pay amounts when determining the amount of self-employment income received monthly;

at least four consecutive recent pay amounts when determining the amount of self-employment income received more often than monthly, such as semi-monthly, bi-weekly or weekly; and

at least four consecutive weeks for self-employment income received daily.

The individual is not required to provide verification of self-employment income and expenses for more than two calendar months before the interview date for income received monthly or more often.

If the advisor informed the household to maintain accurate self-employment records and receipts after certification, the household must provide them before being recertified unless:

the records and receipts are not available because of a reason beyond the household's control, such as being lost in a fire or flood; or

if due to a verified physical or mental disability, the applicant is unable to complete the task. Note: This requirement is not applicable if the self-employed person has not received TANF, SNAP, or Medical Program coverage for three consecutive months before reapplying.

Computation Methods, A-1323.4.6

Revision 25-2; Effective April 1, 2025

Allowable self-employment expenses are based on costs that can be deducted from federal income taxes on the Internal Revenue Service’s (IRS) Schedule C, Form 1040 - Profit or Loss From Business (PDF) . Certain self-employment expense types are not allowed for SNAP.

Use an automatically calculated monthly expense amount generated by TIERS to determine eligibility if the IRS Schedule C, Form 1040 is provided.

Expense Types TANF and MAGI Programs SNAP Advertising Allowable Allowable Car and truck expenses Allowable Allowable Commissions and fees Allowable Allowable Contract labor Allowable Allowable Costs not related to self-employment Non-allowable Non-allowable Costs related to producing income gained from illegal activities, such as prostitution and the sale of illegal drugs Non-allowable Allowable Depletion Allowable Non-allowable Depreciation Allowable Non-allowable Employee benefit programs Allowable Allowable Insurance Allowable Allowable Interest Allowable Allowable Legal and professional services Allowable Allowable Net loss that occurred in a previous period Non-allowable Non-allowable Office expense Allowable Allowable Pension and profit-sharing plans Allowable Allowable Rent or lease Allowable Allowable Repairs and maintenance Allowable Allowable Supplies Allowable Allowable Taxes and licenses Allowable Allowable Travel, meals, and entertainment Allowable Non-allowable Travel to and from place of business Non-allowable Non-allowable Utilities Allowable Allowable Wages Allowable Allowable Other expenses Allowable Allowable

Note: When determining transportation costs, the person may choose to use 70 cents per mile instead of keeping track of actual expenses.

If the household receives roomer or boarder payments the cost of doing business is deducted from each monthly payment. Count the rest as self-employment income.

For roomers , the cost of doing business is actual costs. For boarders , the cost of doing business is:

the amount of the monthly SNAP allotment for the number of boarders which is the average of more than two meals a day;

two-thirds of a full allotment for the number of boarders which is the average of two meals a day or less; or

the actual cost of providing room and meals if the actual cost exceeds the monthly SNAP allotment for the number of boarders.

Note : Each expense must be identified and verified when using actual costs.

A self-employment net financial loss must not be deducted from other types of household income.

Exception: The loss may be deducted from other household income if:

the loss results from a self-employment farming operation; and

the household received or anticipates receiving an annual gross income of $1,000 or more from the farming operation, using Part I, Line A, Form H1049-3, Self-Employment Income Worksheet .

The farm loss amount may be deducted from other non-farm self-employment income during the budgetary (100 percent) needs test.

Any remaining farm loss amount may be deducted during the recognizable needs test.

The farm loss amount may be deducted from other non-farm self-employment income during the federal poverty level (FPL) test.

Any remaining farm loss amount may be deducted after the work expense standard deduction and child or incapacitated care costs.

The farm loss may be deducted from other non-farm self-employment income before applying the gross income test.

Any remaining farm loss may be deducted from other earned or unearned income after applying the 20 percent earned income deduction.

Noncommercial Roomer/Boarder Payments, A-1323.4.3

Revision 15-4; Effective October 1, 2015

There are four computation methods for self-employment income that may be used to calculate monthly income amounts for budgeting purposes:

annual,

monthly,

daily, and

anticipated.

For this method, the individual must have been self-employed for at least the past full year.

The self-employment income projection period, usually 12 months, is the period of time the household expects the income to support the family. A projection period should be established for households that receive self-employment income that is intended to support the household for:

the year, but is received less frequently than monthly, such as farm income that may only be received a few times per year when crops or livestock are sold; or

a specific period in time, but is received less frequently than monthly.

The projection period should be determined at application when the individual reports self-employment income received less often than monthly. Note: For Medicaid EDGs, if the individual is eligible for prior Medicaid, the prior months are not included in the 12-month projection period.

The following steps are used to determine the projection period for self-employment income:

Determine whether the self-employment is annual or seasonal, since that will determine the length of the projection period. Annual – intended to support the household for at least the next full 12 months. The projection period is 12 months whether the income is received yearly or less often than monthly. Seasonal – intended to support the household for less than 12 months since it is available only during certain months of the year. The projection period is the number of months the self-employment is intended to provide support.

Determine the first month of the projection period. It is always the first month the household receives benefits, unless the individual will begin working in a future month. In this situation, use the month the self-employment begins as the first month of the projection period.

Once the projection period is established, it must not be changed. The projection period remains the same until the:

individual no longer supports the household through self-employment;

12-month or seasonal period ends; or

EDG is denied, and the individual misses one full month's benefits before reapplying.

Exception: When there is a new source of self-employment income received less often than monthly, and the individual expects the income to support the household for the year or a specific period of time, establish a projection period for the months that the individual states the income is intended to cover. Since this projection period covers income from a new source, at redetermination, ensure that the income and circumstances still fit with the annual computation method criteria. Until the household has 12 months of income history, the projection period is conditional and may be changed as may the type of computation method used to calculate self-employment income.

In determining the monthly figure to use for new self-employment income when calculating a budget amount:

the monthly computation method is used if there are two full representative months of self- employment income received less often than monthly; and

the daily computation method is used if there are less than two full representative calendar months of self-employment income received less often than monthly.

On an active EDG, when an individual reports a new source of self-employment, the first month of the projection period is the change effective month.

The monthly computation method is used in two situations:

If the frequency is known and consistent, the appropriate conversion factor is used when calculating self-employment income and/or expenses. Conversion factors are not used when income is received on any other basis, such as daily or irregularly.

If the frequency is … use the conversion factor … weekly 4.33 bi-weekly 2.17 semi-monthly 2

If the individual has at least two full representative calendar months of self-employment income and the source or the frequency is unknown and inconsistent, each month's self-employment income should be totaled and deducted from the allowable expenses for each corresponding month.

The daily computation method is used when:

there are less than two full representative calendar months of self-employment income; and

the source or frequency of the income is unknown or inconsistent (income received irregularly, not on a weekly, bi-weekly or semi-monthly basis).

The daily method is used until there are at least two representative calendar months of income. Once there are two full representative calendar months, the monthly computation method is used.

The anticipated method to calculate self-employment income is used when:

there is no income history on which to base an average, and the individual will receive the income on a known and consistent basis; or

there is a change that will make the current or actual self-employment income non-representative.

Anticipated means the individual knows who will pay, when they will pay, and how much will be paid. If the individual knows the source, but not the amount and/or frequency, the daily computation method in A-1323.4.7 , Determining Net Self-Employment Income, should be used.

Revision 15-4; Effective October 1, 2015

The following steps are used to determine net self-employment income when using the annual computation method:

Determine the projection period.

Determine the total gross self-employment income for the past year.

Determine the total allowable expenses for the past year.

Determine the yearly net income by subtracting the total allowable expenses from the total gross income.

Determine the monthly net income by dividing the total yearly net income by the number of months of earnings history used.

If the self-employment income is annual and no substantial changes are expected, the income should be projected for 12 months. If the self-employment income is seasonal and no substantial changes are expected, the income should be projected for the seasonal period.

The following steps are used for the monthly computation method:

Determine the total monthly gross self-employment income.

Determine the total allowable expenses for each corresponding month.

Subtract the total allowable expenses from the total gross self-employment income for the corresponding month.

Look at the net monthly income and determine which months are representative of future earnings and project over the length of the certification period.

Note: If the frequency is known and consistent, the appropriate conversion factor should be used in Step 1 and Step 2.

The following steps are used for the daily computation method:

Determine the total gross income earned from the day the self-employment began through the interview date.

Determine the number of days the income was received. The day self-employment begins is the day any part of the self-employment activity occurs (for example, buying supplies, working, earning income, etc.).

Divide the total gross income by the number of days in the period the income was received.

Multiply the daily income by 30 to get the monthly estimate of gross self-employment income.

Determine the total verified self-employment expense paid from the day the self-employment began through the interview date.

Determine the number of days the expense was to cover. Use the same number of days used to calculate income.

Divide the total expense amount by the number of days in the period.

Multiply the daily expense deduction by 30 to get the monthly estimate of the expense.

Subtract monthly expenses from gross monthly income to determine net monthly self-employment.

The following steps are used for the anticipated self-employment method:

Determine how often the individual will be paid and the amount.

Multiply the pay amount by the appropriate frequency to determine the projected monthly amount: Weekly: amount x 4.33 Bi-weekly: amount x 2.17 Semi-monthly: amount x 2 Note: If the income amounts will fluctuate, a pay period average should be determined and multiplied by the appropriate conversion factor.

Projection should be made over the length of the certification period.

How to Project Income, A-1355 Length of Certification, A-2324

Revision 15-4; Effective October 1, 2015

When an individual reports a change in self-employment income during the certification period, it should be considered part of the normal fluctuations of the business if the current budget already includes fluctuations as significant as the change that the individual is reporting, and the budget is not revised. If a reported change is not part of the normal fluctuations of the business, the income and expenses should be re-evaluated and the change considered substantial if it results in a change to the average monthly net self-employment income of more than $25. If the change results in a change of $25 or less, benefits should not be adjusted.

If a 12-month income projection period was previously established, the period should not be changed, unless it has expired or the individual reports no longer supporting the household with self-employment income. Even if the income or expense changes resulted in a different projected self-employment income, the projection period is the same.

If the income projection period has expired, a new projection period should be established with required verifications, even if the individual indicates no changes in the business.

Note: When the individual reports a change in self-employment income that is not received annually or seasonally, the policy in B-631 , Actions on Changes, should be followed.

Revision 15-4; Effective October 1, 2015

If the individual reports a substantial change in annual or seasonal self-employment income, the income and expenses must be rebudgeted using the following method for actual income and expenses received.

Actual income from the beginning of the projection period through the month before re-evaluation should be used. The following steps are used to rebudget income in this situation.

Determine the actual income for the months from the beginning of the projection period through the month before re-evaluation.

Project the new income for the rest of the projection period.

Add the income from Step 1 and 2 to determine the annual or seasonal amount.

Divide the total from Step 3 by 12 or the number of months in the seasonal period to get the new monthly average.

Compare the new monthly amount to the previous average. If the change is substantial, budget the new amount over the remainder of the projection period.

Revision 21-2; Effective April 1, 2021

Except for MAGI Medical Programs, the gross amount of all wages, salaries, commissions, bonuses, and tips count as earned income before deductions. This includes flexible fringe benefits, cafeteria plans, and employee retirement contributions that are withheld from the amount. MAGI Medical Programs exclude pre-tax contributions from gross income.

Wages held by the employer at the request of the employee and garnished wages are counted as income in the month the household would otherwise have received them. If an employer holds the employee's wages as a general practice, this money counts as income in the month it is actually received by the employee.

An advance counts in the month it is received. When an advance is repaid, the payback amount is deducted from the gross pay in the month it is paid back and the remainder is budgeted as the countable gross amount.

Review income verification documents to determine if the person makes pre-tax contributions through their employer.

Pre-tax contributions are deducted before the gross income is taxed and must be excluded when determining MAGI countable gross income. Pre-tax contributions consist of the following:

Retirement Savings Accounts (401K, 457, etc.);

Dependent Care Flexible Spending Accounts;

Health Savings Accounts;

Health Insurance Premiums;

Commuter Expenses Accounts; and

Life Insurance Premiums.

Pend the EDG if the person claims pre-tax contributions, but verification is not provided. If verification is not provided by the due date, do not exclude the pre-tax contribution from the employment income. Count the gross income including the pre-tax contribution amounts. Staff must not deny the EDG for failure to provide pre-tax contribution information.

How to Project Income, A-1355 Budgeting Options for SNAP Households, A-1355.1

Revision 21-2; Effective April 1, 2021

Households with earnings below levels established by the Internal Revenue Service (IRS) are potentially eligible to receive EIC payments from the IRS.

EIC money is included in a person's:

paycheck (advance EIC payments) before the person files an income tax return, or

IRS refund after the person files an annual income tax return.

Federal tax refunds and EIC payments are exempt as income.

Federal Tax Refunds and Earned Income Tax Credits (EIC), A-1232.2

Revision 15-4; Effective October 1, 2015

Fringe benefit plans allow the employee to choose from benefit components such as insurance, extra vacation time, and payments to third parties for medical bills or child care. These are also called "cafeteria plans."

Under some plans, employers may:

withhold wages to pay for benefits selected by the employee; or

offer benefit credits in addition to wages, which the employee can use to purchase benefits.

Some plans may pay the remaining unused credit as part of the employee's wages.

If the employer … the advisor must count … withholds the employee's wages to purchase benefits, the held wages as earnings in the pay period that the employee would have normally received them. provides credit in addition to wages, as earnings only the portion that is paid directly to the employee. If the employer pays the unused credit in cash, the advisor must follow the steps below to determine countable excess income. Determine the total amount of gross wages/salary. Add the benefit credit amount to the wages/salary from Step 1. Subtract the cost of fringe benefits up to the amount of the benefit credit from the amount in Step 2. The remaining income from Step 3 is the countable gross earned income for the EDG.

Flexible fringe benefits are exempt.

Revision 15-4; Effective October 1, 2015

Household members who are employed in service-related occupations (beauticians, waiters, delivery staff, etc.) are likely to earn tips in addition to wages. Tips are counted as earned income.

Tip income is added to wages before applying conversion factors.

Note: Tips are not considered as self-employment income unless related to a self-employment enterprise.

Revision 15-4; Effective October 1, 2015

If an individual receives vacation pay … the payment is considered … during or before termination of employment, earned income. after termination of employment in one lump sum, a liquid resource in the month received. after termination of employment in multiple checks, unearned income.

Vacation pay is counted as unearned income.

Lump-Sum Payments, A-1242 and A-1331

Revision 20-3; Effective July 1, 2020

Wages paid by the Census Bureau for temporary employment related to census activities are exempt.

Wages paid by the Census Bureau for temporary employment related to census activities are counted as earned income.

Revision 15-4; Effective October 1, 2015

Government payments are counted unless exempted in this section or by other policy in A-1300 , Income.

Government payments are exempt.

Revision 15-4; Effective October 1, 2015

Adoption assistance payments are exempt.

Note : A person receiving adoption assistance in a TANF budget or a certified group is exempt.

Who Is Not Included, A-222

Revision 15-4; Effective October 1, 2015

Crime victim's compensation payments are provided from the funds authorized by state legislation to assist a person who:

was a victim of a violent crime;

was the spouse, parent, sibling , or adult child of a victim who died as a result of a violent crime; or

is the guardian of a victim of a violent crime.

The Office of the Attorney General (OAG) distributes the payments monthly or in a lump sum. These payments are exempt.

Crime Victim's Compensation Payments, A-1232.1

Revision 15-4; Effective October 1, 2015

Federal disaster payments and comparable disaster assistance provided by states, local governments, and disaster assistance organizations are exempt if the household is subject to legal penalties when the funds are not used as intended (including temporary employment of six months or less for disaster-related work, paid under the Workforce Innovation and Opportunity Act and funded by the National Emergency Grant).

Examples:

Payments by the Individual and Family Grant Program or Small Business Administration to rebuild a home or replace personal possessions damaged in a disaster.

Payments from the Federal Emergency Management Agency (FEMA) to assist with rent.

Government Disaster Payments, A-1232.4

Revision 15-4; Effective October 1, 2015

See A-1326.3 , Energy Assistance, for energy or utility payments.

The value of government housing or rental subsidies, whether cash, two-party check, in-kind, or vendor-paid, are exempt.

The following payments are counted:

cash payments;

vendor payments paid from state or local government funds unless exempt as shown below; and

vendor payments paid from state or local funds for transitional housing for the homeless.

The following payments are exempt:

in-kind payments; and

federally funded vendor or two-party check payments.

Revision 15-4; Effective October 1, 2015

Transitional living allowances (TLA) are exempt. The Texas Department of Family and Protective Services (DFPS) distributes TLA to a foster child who:

is under age 21;

has completed the preparation for adult living (PAL) classes; and

has left foster care or is transitioning out of foster care.

Payments:

are received for a maximum of 12 months;

cannot exceed $500 a month;

cannot total more than $1,000; and

are intended for expenses other than ongoing room and board.

Transitional Living Allowance, A-1232.5

Revision 18-3; Effective July 1, 2018

Revision 24-3; Effective July 1, 2024

The National and Community Service Act of 1990 (NCSA) established a corporation to administer paid volunteer service programs. The corporation provides funds, training and technical assistance to states and communities to develop and expand human, education, environmental and public safety services.

The corporation oversees programs created under the Domestic Volunteer Service Act (DVSA) of 1973 such as:

Volunteers in Service to America (VISTA);

Retired and Senior Volunteer Program (RSVP);

Foster Grandparents; and

Senior Companions.

The corporation also administers programs established in 1993 that include:

AmeriCorps;

Learn and Serve; and

National Senior Service Corps (Senior Corps).

For programs established in 1973:

Payments, living allowances and stipends are exempt.

For programs established in 1993:

Exempt payments except on-the-job training (OJT) payments. OJT payments are:

counted as earned income for adults; and

exempt for: AmeriCorps volunteers; and children 19 and younger under the parental control of another household member.

Use the exceptions for counting a child’s OJT income in the MAGI household income. Refer to related policy for Medical Programs, Step 3.

VISTA payments under Title I of the DVSA of 1973 are:

exempted only if the person received SNAP before participating in the VISTA program; and

counted as earned income for a person who applies for SNAP while already participating in the VISTA program.

Exempt payments under Title V of Public Law 106-501, the Community Service Employment Program for Older Americans, which was formerly known as the Senior Community Service Employment Program.

Related Policy

Income Limits and Eligibility Tests, A-1341

Revision 20-3; Effective July 1, 2020

Exempted payments made to Native Americans under various public laws include, but are not limited to, the following:

Distributions from Native Corporations made under the Alaska Native Claims Settlement Act (ANCSA) (Public Law [PL] 92-203 and Section 15 of PL 100-241).

Funds distributed per capita or held in trust by the Indian Claims Commission for members of Indian tribes, as follows: Grand River Band of Ottawa Indians (PL 94-540); Income to certain tribal members from land held in trust by the United States government (PL 94-114, Section 6); Income resulting from provisions of PL 92-254; and Red Lake Band of Chippewa (PL 98-123, Section 3) or Assiniboine Tribe of the Fort Belknap Indian Community, and the Assiniboine Tribe of the Fort Peck Indian Reservation (PL 98-124, Section 5).

Funds distributed by the Secretary of the Interior to tribal members from: tribal trust funds on a per capita basis (PL 98-64); or judgment funds up to $2,000 per year, per person, from claims against the United States and held in trust or distributed on a per capita basis (PL 93-134, as amended by 97-458).

Payments by the Indian Claims Commission to the: Passamaquoddy Tribe, the Penobscot Nation, and the Houlton Band of Maliseet Indians or any of their members [Maine Indian Claims Settlement Act of 1980, PL 96-420, Section 9(c)]. Confederated Tribes and Bands of Yakima Indian Nation or the Apache Tribe of the Mescalero Reservation (PL 95-433). Seneca Nation or its members (Seneca Nation Settlement Act of 1990, PL 101-503). Blackfeet, Gros Ventre, and Assiniboine tribes of Montana (PL 97-408). Saginaw Chippewa of Mississippi [PL 99-123, Section 6(b)(2)].

Payments to the Turtle Mountain Band of Chippewa, Arizona (PL 97-403).

Payments $2,000 per year, per person, to heirs of deceased Indians made under the Old Age Assistance Claims Settlement Act (PL 98-500).

Exception: Money given to Native Americans from gaming revenues (such as from casino profits, race tracks, lotteries, etc.) is not exempt under these laws. Gaming revenues are counted as unearned income.

American Indian/Alaskan Native (AI/AN) disbursement income is exempt and not counted under MAGI only if the person claiming that income type has verified their AI/AN status and provided verification of the income source, as explained in A-1370 , Verification Requirements, for Medical Programs.

AI/AN disbursements include:

distributions from Alaska Native corporations and settlement trusts;

distributions from property held in trust, in the boundaries of a prior federal reservation;

distributions and payments from rents, leases, rights of way, royalties, usage of rights, or using natural resources from land under the supervision of the Secretary of the Interior or rights to off-reservations hunting, fishing, gathering, or natural resource usage;

payments from ownership/usage rights to items that are religious, spiritual, traditional, or cultural or rights that support subsistence/traditional lifestyle according to tribal law or custom; and

student financial assistance from the Bureau of Indian Affairs education program.

Revision 15-4; Effective October 1, 2015

The following amounts are exempt:

the value of food assistance under the Child Nutrition Act of 1966 and under the National School Lunch Act; and

benefits received under Title VII, Nutrition Program for the Elderly, of the Older American Act of 1965.

Revision 22-2; Effective July 1, 2022

One-Time TANF for Relatives payments are exempt as income.

One-Time TANF for Relatives, A-2412

Revision 15-4; Effective October 1, 2015

OTTANF is exempt as income.

Revision 03-7; Effective October 1, 2003

Revision 15-4; Effective October 1, 2015

These VA payments made to Vietnam veterans' children who are born with spina bifida are exempt.

Revision 15-4; Effective October 1, 2015

VA payments made to the children of women Vietnam veterans who are born with a birth defect are exempt.

Payments to Children of Women Vietnam Veterans Born with Certain Birth Defects (Public Law 106-419), A-1232.7.2

Revision 15-4; Effective October 1, 2015

Payments made to individuals because of their status as victims of Nazi persecution are exempt.

Revision 15-4; Effective October 1, 2015

Under the American Recovery and Reinvestment Act of 2009 (Division A, Title X, Section 1002), some World War II Filipino veterans who served in the military forces of the Government of Commonwealth of the Philippines, and their spouses, are authorized to receive one-time lump-sum payments of up to $15,000.

These payments are exempt.

Revision 25-3; Effective July 1, 2025

Exempt the payments provided under the following:

Title II of the Uniform Relocation Assistance and Real Property Acquisitions Act of 1970;

Title I of Public Law 100-383 (payments to Aleuts or individuals of Japanese ancestry [or their heirs] who were relocated during World War II); or

Public Law 93-531, relocation assistance payments to members of the Navajo or Hopi Tribes.

Relocation Assistance, A-1232.12

Revision 18-4; Effective October 1, 2018

The benefit amount, including the deduction for the Medicare premium, less any amount being recouped for a prior RSDI overpayment, is counted as unearned income.

Note: If DFPS is the payee and the child gets Foster Care Medicaid:

No Cash , the RSDI income is counted; or

With Cash , the RSDI income is exempt.

See A-1326.15 , Income Legally Obligated to Children in Department of Family and Protective Services (DFPS) Conservatorship, for more information on foster care types of assistance.

Note : SSA may deposit RSDI benefits into a Direct Express card debit account. See Get Your Payments Electronically (PDF) .

For people who meet a MAGI exception as defined under Step 3 in A-1341, Income Limits and Eligibility Tests, calculate the countable amount of the person’s RSDI using the formula in Table 3, Step 3 of the Form H1042, Modified Adjusted Gross Income (MAGI) Worksheet: Medicaid and CHIP.

Debit Accounts, A-1231.2 Income Limits and Eligibility Tests, A-1341

Revision 17-1; Effective January 1, 2017

The income of an SSI recipient is exempt.

If the SSI recipient contributes to a member of the TANF unit, the contributions policy in A-1326.1.1 , Contributions from Noncertified Household Members, applies.

Exception: All of the SSI benefits are exempt when the SSI recipient meets one of the following criteria.

The SSI recipient would otherwise be an eligible member of the TANF unit.

The SSI recipient would otherwise be someone whose income is "applied" to the TANF unit.

A TANF-certified member is the SSI recipient's payee .

Note: This policy applies to people who cannot get SSI financial assistance because of earnings but who continue to get SSI Medicaid.

Counted as unearned income . The following amounts are deducted if the amount is being:

recouped for an SSI overpayment ; or

collected by a qualified organization providing representative payee services, up to the lesser of 10 percent of the monthly benefit amount or: $50 for SSI benefits based on alcoholism and/or drug abuse (SSI/DAA); or $25 for non-SSI/DAA benefits.

Notes:

Advisors must verify with SSA that the qualified organization is authorized to collect a fee for representative payee services. The advisor must also verify with the qualified organization the amount collected for representative payee services.

If DFPS is the payee and the child gets Foster Care Medicaid: No Cash , the SSI income is counted; or With Cash , the SSI income is exempt.

A-1326.15 , Income Legally Obligated to Children in Department of Family and Protective Services (DFPS) Conservatorship, includes more information on foster care types of assistance.

Note: SSA may deposit SSI benefits into a Direct Express card debit account. See Get Your Payments Electronically (PDF) .

SSI is exempt. Count the other income of an SSI recipient unless the income is exempt.

Plan for Achieving Self-Sufficiency (PASS), A-1326.8 Debit Accounts, A-1231.2

Revision 15-4; Effective October 1, 2015

TANF benefits are exempt from income.

The TANF benefit amount (after recoupment ) counts as unearned income .

Retroactive or restored TANF or refugee cash assistance payments are exempt as income. These payments should be considered lump-sum payments and counted as a resource.

Note: TANF benefits may be deposited into an Electronic Benefit Transfer (EBT) cash debit account and made accessible to recipients via an EBT card.

Exception: The recommended grant amount continues to be counted when the TANF grant is lowered for one or more of the following reasons:

a Personal Responsibility Agreement (PRA) penalty;

a recoupment for a TANF intentional program violation (IPV);

a disqualification for IPV or noncooperation with a TANF requirement (unless the individual is disqualified in SNAP for the same offense); or

an active TANF EDG is denied because of: the noncooperation disqualification of an individual; failure to sign Form H1073, Personal Responsibility Agreement ; PRA noncooperation; or noncooperation with an audit or investigation.

SNAP benefits must not be increased in an existing certification period when TANF benefits are forfeited because of a noncooperation penalty. In situations where the TANF is denied:

the full TANF benefit is counted until the next SNAP certification period begins; and

the benefit continues to count when a SNAP certification period is extended.

In situations where there is a break in SNAP benefits of less than a month, the TANF continues to count through the next certification period when the:

individual received or will receive SNAP in the month of the PRA noncooperation, and either the first or second noncooperation month is also the first month of a new SNAP certification period; or

file date of the SNAP application and the TANF PRA noncooperation date are the same month, and SNAP benefits do not prorate to less than $10 in the month of application.

Note: This policy does not apply to other types of TANF disqualifications or denials or to denied TANF applications.

Examples:

During the SNAP certification period January – June, the date of noncooperation is February 1. The first noncooperation month is February, and the second noncooperation month is March. The TANF grant is denied in April. The TANF grant continues to count in the SNAP budget through June.

At a SNAP redetermination when there is a certified TANF EDG, the household fails to comply with TANF PRA requirements and is denied effective with March benefits. The date of noncooperation is January 1. The first noncooperation month is January, and the second noncooperation month is February. The SNAP application file month is January. When the SNAP redetermination is untimely in January:

because the last benefit month was December, the TANF counts in the ongoing SNAP budget since there is not at least a one-month break in SNAP benefits.

and the last benefit month was November, the TANF does not count in the forfeit and ongoing months because there is a break in SNAP benefits of one month or more. The TANF grant received in January, the month of redetermination, must be counted.

because the last benefit month was December, and the SNAP benefit prorates to zero for the application month, the application month is considered a break in benefits of at least one month. The TANF grant does not count in the forfeit or ongoing months.

When the SNAP redetermination is a new application or the individual was receiving SNAP in a different household, the TANF does not count in the forfeit or ongoing months. However, the TANF grant received in January, the month of application, must be counted.

Revision 15-4; Effective October 1, 2015

TANF annual school subsidy payments are exempt.

Revision 15-4; Effective October 1, 2015

Unemployment insurance benefits (UIB) are:

deposited into a debit account and accessible to claimants via the UIB debit card;

deposited directly into a personal checking or savings account; or

issued through a mailed paper check.

The gross UIB benefit, less any amount being recouped for a UIB overpayment , counts as unearned income .

Exception: The gross amount counts if the household agreed to repay a SNAP overpayment through voluntary garnishment.

How to Project Income, A-1355 Debit Accounts, A-1231.2 Payments Exempt as a Resource While Being Considered Income, A-1243

Revision 15-4; Effective October 1, 2015

The VA provides payments to veterans with disabilities and/or their spouses/dependents and to spouses/dependents of deceased veterans. VA benefits are not subject to federal or state income tax or child support garnishment.

Three basic VA benefit programs are described in this section:

Pension,

Disability Compensation, and

Dependency and Indemnity Compensation (DIC).

VA pension payments are made to certain veterans with disabilities based on financial needs. Low-income veterans who either have a disability or are age 65 and older may be eligible for a VA pension if they have 90 days or more of active military service with at least one day during a period of war. Payments are made to bring the veteran's total income, including other retirement or Social Security income, to a level set by Congress. Recipients must re-qualify each year to continue to receive payments. There is a similar pension benefit available for surviving spouses and dependent minor children of such deceased veterans.

VA disability compensation is a payment made to a veteran with a service-related disability. Eligibility is not based on financial need. The amount of the payment varies with the percentage of the veteran's disability and the number of the veteran's dependents living in or out of the home. The payment can also be made to a spouse, child or parent of a veteran because of the service-related death of the veteran.

DIC is a monthly benefit paid to eligible survivors of active duty service members and survivors of those veterans whose deaths are determined by VA to be service-related. This payment is a flat monthly payment, regardless of other income. The payment is payable for the life of the spouse, provided the spouse does not remarry before age 57; however, should a remarriage end, DIC benefits can be reinstated. This payment is adjusted annually for cost-of-living increases and is non-taxable. VA adds a monthly transitional payment to the surviving spouse with minor children for the first two years of DIC entitlement or until the last child turns age 18, whichever occurs first. See http://benefits.va.gov/Compensation/current_rates_dic.asp for current payment amounts.

Veterans with certain disabilities may be eligible for additional special monthly compensation such as:

Aid and Attendance and Housebound payments, which are an allowance to veterans and dependents who are in need of regular aid and attendance by another person, or a veteran who is permanently housebound; and

reimbursement for unusual medical expenses.

The gross benefit less any amount recouped or suspended for VA overpayment is counted as unearned income, except as described below for reimbursement for medical and attendant care expenses.

These special compensation payments that are intended to cover medical and attendant care expenses are exempt. These payments are exempt as reimbursement as explained in A-1332 , Reimbursements.

Apportioned VA payments are a direct payment of the dependent's portion of the VA benefit to a dependent spouse or child not living with the veteran. Apportioned VA payments are unearned income to the dependent spouse or child not living with the veteran.

Military retirement payment — A payment made to an individual who retired from active duty military service after at least 20 years of service. Military retirement is not a VA program, but is paid by the Defense Finance and Accounting Service in Cleveland (DFAS-CL). The gross payment is counted as unearned income.

Survivor Benefit Plan (SBP) — Active duty members are automatically enrolled in this program. Surviving spouses and/or children of service members who die while on active duty may be entitled to SBP payments made by DFAS-CL. SBP payments are equal to 55 percent of what a member's retirement pay would have been had the member been retired at 100 percent disability. An SBP payment is reduced by the amount of payments provided under the VA DIC program.

At retirement, retirees may choose to purchase the SBP. In this case, the SBP pays retired military members’ eligible survivors an inflation-adjusted monthly income. Basic SBP for a spouse pays a benefit equal to 55 percent of the retired individual's pay. Eligible children may also be SBP beneficiaries while they are dependents of the retired individual, either alone or added to spouse coverage. Any VA DIC paid to a spouse is subtracted from SBP payments, although VA DIC payments to or for children do not affect SBP payments. SBP premiums are refunded to the survivor if the monthly VA DIC amount is greater than the SBP monthly annuity.

The gross amount of any SBP payment is counted as unearned income.

VA educational assistance programs — Different programs provide education assistance, including vocational rehabilitation. The policy in A-1322.1 , Educational Assistance, applies.

All veterans benefits are exempt from income

Revision 19-1; Effective January 1, 2019

There are two types of Relative and Other Designated Caregiver Program Payments issued by DFPS, these include:

Kinship Reimbursement payments; and

Post-Permanent Managing Conservatorship Annual Reimbursement payments.

Both of these types of payments are exempt from income.

Relative and Other Designated Caregiver Program Payments, A-1232.13

Revision 15-4; Effective October 1, 2015

A payment received for completing the Healthy Marriage Development Program is exempt. The advisor must document as required by policy in A-1380 , Documentation Requirements.

Revision 18-4; Effective October 1, 2018

Railroad retirement benefits may be paid to a person, the person's dependents or survivors. Some examples of railroad retirement benefits are sick pay, annuities, pensions and unemployment insurance benefits. Count the gross benefit amount, including the deduction for the Medicare premium as unearned income.

Exception : For Medicaid and Children’s Health Insurance Program (CHIP), people who meet a MAGI exception as defined under Step 3 in A-1341, Income Limits and Eligibility Tests, calculate the countable amount of the person’s railroad retirement benefits using the formula in Table 3, Step 3 of the Form H1042, Modified Adjusted Gross Income (MAGI) Worksheet: Medicaid and CHIP.

Income Limits and Eligibility Tests, A-1341

Revision 02-8; Effective October 1, 2002

Revision 15-4; Effective October 1, 2015

Dividends count as unearned income . Exception: Dividends from insurance policies are exempt as income.

Royalties count as unearned income, less any amount deducted for production expenses and severance taxes.

Royalties count as unearned income. For allowable expenses, see A-1420 , Types of Deductions.

Revision 15-4; Effective October 1, 2015

Payments for oil, gas, and mineral rights count as unearned income .

Revision 08-1; Effective January 1, 2008

Revision 18-1; Effective January 1, 2018

Cash gifts and contributions count as unearned income unless they:

are made by a private, nonprofit organization on the basis of need; and

total $300 or less per household in a federal fiscal quarter. The federal fiscal quarters are January to March, April to June, July to September, and October to December.

If these contributions exceed $300 in a quarter, the excess amount counts as income in the month received.

Exception: Contributions from noncertified household members are budgeted according to policy explained in A-1326.1.1 , Contributions from Noncertified Household Members.

Count cash support only if:

it is given from a taxpayer to his or her tax dependent;

it is given by a taxpayer who is someone other than the receiver’s spouse or parent; and

the total amount exceeds $50 a month.

For example, a person gives $100 a month to her nephew and plans to claim her nephew as her tax dependent. This cash support will count for her nephew because the she is a taxpayer giving an amount to her tax dependent. She is not her nephew’s parent or spouse, and the amount exceeds $50 a month.

Energy Assistance, A-1326.3 Lump-Sum Payments, A-1242 and A-1331 MyGoals Payments, A-1326.27

Revision 15-4; Effective October 1, 2015

If a noncertified person(s) lives in the home with a TANF/SNAP unit and shares household expenses (no landlord/tenant relationship), any payments the noncertified person makes to the unit for common household expenses (including food, shelter, utilities, and items for home maintenance) are exempt. If a noncertified household member makes additional payments for use by a certified member, it is a contribution.

If a noncertified household member makes payments to a certified member under a formal or informal landlord/tenant relationship, countable income is determined according to the roomer/boarder policy in A-1323.4.3 , Noncommercial Roomer/Boarder Payments.

Medical Programs

For contributions from noncertified household members, advisors must follow the policy explained in A-1326.1 , Cash Gifts and Contributions, for Medical Programs.

Revision 15-4; Effective October 1, 2015

Gifts from tax-exempt organizations are exempt if the gift is for a child with a life-threatening condition and the amount of the gift is:

less than $2,000 annually, and

not converted to cash.

If the gift is converted into cash or exceeds $2,000 a year, the conversion or the excess counts as unearned income in the month of receipt and is exempt as a resource in the months that follow.

See A-1326.1 , Cash Gifts and Contributions, for Medical Programs.

Revision 15-4; Effective October 1, 2015

Payments obtained on behalf of a child count as unearned income. See A-1326.2.1 , Counting Child Support, for when to count for Temporary Assistance for Needy Families. Payments are considered as child support if:

a court ordered the support, or

the child's caretaker or the person making the payment states the purpose of the payment is to support the child.

Child support collections distributed through the Texas OAG may be received through warrants, direct deposits or the Texas Debit Card. Refer to A-1326.2.1 for the various methods and availability.

Child support payments may be received by a person in Texas through another state’s Office of Attorney General. Several other states use debit accounts for the distribution of child support payments.

Note: If DFPS is the payee and the child receives Foster Care Medicaid:

With Cash , child support is exempt.

No Cash , the child support income is counted.

Advisors must contact DFPS child support representatives to verify the amount of child support and dates of disbursements because DFPS may not forward the total legally obligated amount. OAG inquiries are not used in this situation.

See A-1326.15 , Income Legally Obligated to Children in Department of Family and Protective Services (DFPS) Conservatorship, for further information on foster care types of assistance.

Advisors must consider the following in determining child support:

Gifts or donations as contributions are not considered child support. Gifts are items or money that only benefit the child for a specific purpose, such as a birthday present. These gifts or donations include (but are not limited to) clothes, toys, or personal items, or money to purchase clothes, toys, or personal items.

Ongoing child support income is considered as income to the children, even if someone else living in the home receives it.

Child support arrears is considered as unearned income to the caretaker.

If an absent parent is making child support payments but moves back into the home of the caretaker and child, the child support is not counted. The earnings and/or other income count as a regular household member.

If a caretaker receives current child support for a nonmember (or a member who is no longer in the home) but uses the money for personal or household needs, the amount counts as unearned income. The amount actually used for or provided to the nonmember for whom it is intended to cover is not counted.

If a single payment covers two or more children (including at least one who is not an applicant/recipient) and the support order does not specify a portion for each child, the payment is prorated among all of the children. When two or more children receive child support from the same father and one child receives Supplemental Security Income, the payment is always prorated.

Child support is exempt.

Revision 15-4; Effective October 1, 2015

For child support payments issued via … funds are … warrants, mailed from Austin, Texas, the day after the disbursement date listed on the Texas Child Support Enforcement System (TXCSES) inquiry system. When determining availability, consider the distance the payment has to travel through the mail. direct deposit/electronic transfers, available two business days after the disbursement date listed on the TXCSES Web inquiry system. Texas debit cards, available two business days after the disbursement date listed on the TXCSES Web inquiry system.

How to Project Income, A-1355 Debit Accounts, A-1231.2

Applicants are not required to remit any child support received before the certification date. At application and prior to certification, the following procedures may be used to determine the countable child support to budget.

When determining … count … eligibility, all child support already received and/or expected to be received each month, less the $75 disregard. If the countable child support plus other countable income is less than the TANF recognizable needs, proceed to determining the benefit amount. benefits, child support received from the beginning of the month through the date of certification, less the $75 disregard. Exception: For One-Time TANF, issue the full grant.

Note: If the applicant refuses to remit the child support after signing Form H1073, Personal Responsibility Agreement , prior to certification, a child support penalty is applied.

TANF recipients should be instructed to remit all child support received after the certification date to the OAG. See A-1124 , TANF, for instructions on remitting child support payments to the state. Child support payments remitted to the OAG as required are not counted.

Child support received after certification is counted if the:

individual receives an excess payment from the OAG; or

legal parent keeps payments received directly from the absent parent instead of remitting them to the state.

A sanction is imposed for noncooperation. Child support payments are counted, less the $75 disregard deduction. The advisor must process a claim for any overissuance.

Child support counts as unearned income. If a TANF individual remits child support to the state, only the portion the OAG sends to the individual is counted.

The OAG sends HHSC a monthly computer tape for all TANF individuals receiving OAG child support payments that month. Each month, the Texas Integrated Eligibility Redesign System (TIERS):

updates the child support payment history file on SNAP data inquiry; and

rebudgets any associated SNAP EDG not correctly budgeted. This rebudgeting results in an automated Form TF0001, Notice of Case Action, if rebudgeting results in adverse action.

Full child support payments are counted, less the $75 disregard deduction.

Revision 22-2; Effective April 1, 2022

Lump-sum child support payments received or anticipated to be received more often than once a year count as unearned income in the month received. Lump-sum child support payments received once a year or less frequently count as a resource in the month received.

Lump-sum payments on child support arrears are received from the following sources:

IRS intercept program — This occurs when the IRS intercepts the absent parent's tax refund to pay child support arrears.

Excess payment — When the OAG sends a second excess payment to the recipient, HHSC receives the payment date and amount.

OAG adjustments — HHSC receives a PBS-OAGF1 Report, Clients Receiving a Lump Sum Adjustment from OAG-Possible Ineligibility. HHSC produces this report when the OAG adjusts an EDG that results in a lump-sum distribution to the recipient. Adjustments may occur when federal distribution changes are implemented, court orders are modified, or EDG errors are corrected.

Lump-sum payments on current child support are received from the following sources:

Advance pay — Advance pay occurs when the absent parent is current on obligated amounts and voluntarily pays an amount in advance of the obligated monthly amount. Example: The absent parent is obligated to pay $200 a month and is current on that amount. The absent parent loses their job and receives a severance payment of $2,000 and decides to pay $1,000 in advance to cover child support for the next five months. The payment to the recipient counts as a resource in the month received.

Future pay — Future pay occurs when the absent parent is current on obligated amounts and voluntarily and routinely pays an extra amount over the obligated amount. Example: The absent parent is obligated to pay $200 a month and is current on that amount. The absent parent pays $25 extra each month (or some months). The OAG releases the money as received. This payment counts as unearned income if staff anticipate that it will be received more often than once a year.

Lump-Sum Payments, A-1242 Calculating Household Income, A-1350 TXCSES Menu Screens, C-832.2

Revision 15-4; Effective October 1, 2015

When a court order is entered, it designates the amount of child support and/or medical support a parent receives on behalf of the children. Medical support is in the form of:

health insurance, ordered in addition to child support; or

a cash amount for the purpose of offsetting medical expenses.

TANF and SNAP

If the individual does not receive Medicaid and is responsible for paying medical expenses, the payments are considered a reimbursement and the policy for reimbursement in A-1332 , Reimbursements, applies.

Cash medical support payments the individual receives and remits to Third Party Recovery (TPR) are not counted. Any of the cash medical support payment from the absent parent that the individual continues to keep counts as income.

Remitting Cash Medical Support Payments to the Third-Party Resources (TPR) Unit, A-861.5 TANF, A-1124 Reimbursements, A-1332

Medical support payments are exempt.

If the individual has an open child support case with the OAG for children receiving Medicaid, the OAG processes medical support payments through an interface with HHSC/TPR, and the individual does not receive a direct payment. If an individual is not referred to the OAG for services and is receiving or begins receiving cash medical support payments, the individual is required to remit the payments to the TPR unit.

Revision 15-4; Effective October 1, 2015

Energy or utility payments and supplements are paid to or on behalf of the TANF, SNAP, and Medical Programs households from various governmental and private sources. The assistance may be in the form of cash, vendor, in-kind, and two-party check payments.

The chart below indicates when to exempt or count energy/utility assistance as TANF, SNAP, and Medical Programs income. Note: If an energy assistance payment is combined with other payments, only the energy assistance portion is exempt from income (if applicable).

Source Type Payment TANF SNAP Medical Programs Federally-funded, state, or locally administered programs including CEAP , weatherization, Energy Crisis, and one-time payments for emergency repairs of a heating or cooling device (down payment and final payment) Vendor In-kind Two-party check Cash Exempt Exempt Exempt Energy assistance received through HUD , U.S. Department of Agriculture’s Rural Housing Service (RHS) or Farmer's Home Administration (FmHA) Vendor In-kind Two-party check Cash Exempt Exempt Exempt State or local government-funded utility supplement or energy assistance payments (not federally-funded) Vendor In-kind Two-party check Exempt Exempt Exempt State or local government-funded utility supplement or energy assistance payments (not federally-funded) State or local government-funded utility supplement or energy assistance payments (not federally-funded) Cash Exempt Count Exempt Private nonprofit organization Vendor In-kind Two-party check Exempt Exempt Exempt Private nonprofit organization Cash Count per A-1326.1 , Cash Gifts and Contributions Count per A-1326.1 Exempt State or federal regulated utility company, a municipal utility company, or a supplier of home heating oil or gas Vendor In-kind Two-party check Exempt Exempt Exempt State or federal regulated utility company, a municipal utility company, or a supplier of home heating oil or gas Cash Exempt Count Exempt

Revision 15-4; Effective October 1, 2015

Foster care or permanency care payments are exempt.

Do not include a person receiving foster care or permanency care payments in a TANF budget or certified group.

If a foster parent or caregiver chooses to exclude a foster/PCA child/adult from the certified group:

the foster care/PCA income for the foster/PCA child/adult who is excluded from the certified group is exempt; and

all other income received by the excluded foster/PCA child/adult is exempt.

If a foster parent or caregiver chooses to include a foster/PCA child/adult in the certified group:

the foster care/PCA income counts as unearned income for the foster/PCA child/adult;

any other non-exempt income received by the foster/PCA child/adult is counted; and

the foster care/PCA income under the foster/PCA child's/adult's name is budgeted for whom the payment is intended.

Who Is Not Included, A-222 , No. 8

Revision 15-4; Effective October 1, 2015

In-kind income is exempt.

Revision 17-1; Effective January 1, 2017

Interest counts as unearned income unless specifically excluded.

Note: “Note interest” is one type of interest that is also counted as unearned income.

Revision 15-4; Effective October 1, 2015

Financial assistance is considered a loan if:

there is an understanding that the individual will repay the money; and

the individual can reasonably explain how the loan will be repaid.

These loans are exempt from income. Contributions that are not considered loans must be considered as explained in A-1326.1 , Cash Gifts and Contributions.

Note: See A-1234 , Noneducational Loans, for policy on treating loans as a resource.

Revision 15-4; Effective October 1, 2015

Any amount an SSI recipient deposits into a PASS account or uses toward completion of a PASS plan is exempt.

Note: If the PASS contribution is made from earned income, the advisor should enter the PASS income in the Employer – Employee Screen – Amount Totals – PASS Income. TIERS will deduct the PASS contribution from the gross earnings.

A PASS can be, but is not limited to, money that is:

deposited into a savings account to purchase a vehicle for employment transportation;

deposited into a savings account to start a new business; or

used toward an educational program.

The PASS plan must be approved by the Social Security Administration.

The SSI recipient will receive a notice from SSA approving or disapproving the PASS plan. Advisors may use this notice as verification of the PASS plan.

Individual Development Accounts (IDAs), A-1231.3

Revision 15-4; Effective October 1, 2015

A pension is any benefit derived from former employment (such as retirement benefits or a disability pension). A pension counts as unearned income .

Revision 15-4; Effective October 1, 2015

Withdrawals or dividends that the household can receive from a trust fund (also referred to as trust payments) count as unearned income.

Trust Funds, A-1237

Revision 15-4; Effective October 1, 2015

R&P payments are exempt.

Revision 15-4; Effective October 1, 2015

Individuals can receive RCA only if they are not eligible for TANF.

RCA counts as income in the month received.

RCA income is exempt.

Revision 15-4; Effective October 1, 2015

Individuals can receive Match Grant only if they are not eligible for TANF.

Follow the policy in A-1326.1 , Cash Gifts and Contributions.

Match Grant is exempt.

Revision 15-4; Effective October 1, 2015

The portion of income from a spouse or parent in a nursing facility that is diverted to the family members living in the community counts as unearned income .

The spousal diversion and dependent allowance are determined by the Medicaid for the Elderly and People with Disabilities worker processing the application for nursing facility coverage. When nursing facility coverage is approved and disposed, TIERS will add this income in the community family member's approved Texas Works (TW) EDGs upon running Eligibility. Advisors do not make Data Collection entries for this income.

Spousal diversion payments are exempt.

Revision 15-4; Effective October 1, 2015

DFPS has systems in place to become a payee for legally obligated income the child received prior to DFPS taking conservatorship. This income may include (but is not limited to) child support, RSDI and SSI.

Foster care (FC) types of assistance (TOA) are identified in TIERS Inquiry as:

Foster Care – Federal Match – With Cash,

Foster Care – No Federal Match – With Cash,

Foster Care – No Federal Match – No Cash, and

Foster Care – Federal Match – No Cash.

Federal Match identifies Medicaid paid by matched funds from the federal government. No Federal Match identifies state-paid Medicaid only without matching federal funds. With Cash types of assistance (with or without federal match) indicate that the foster parent receives FC financial assistance for an FC child in addition to FC Medicaid. No Cash indicates the foster parent does not receive an FC financial payment but DFPS provides FC Medicaid only.

When reviewing inquiry systems such as WTPY/SOLQ and OAG, and DFPS is identified as the payee for the legally obligated income:

The legally obligated income for an FC child who is receiving FC With Cash is not counted since DFPS keeps the legally obligated income.

Legally obligated income for the FC child who receives FC No Cash is counted since DFPS sends the legally obligated income to the foster parent.

The legally obligated income is counted when a child is placed back in the home of the individual from whom the child was removed. DFPS remains the conservator of the child receiving FC No Cash , and the legally obligated income is not forwarded. The individual must inform the income source they are now the payee. If DFPS has not already provided the issuing agency this verification, that agency must verify with DFPS before changing the payee.

FC and Adoption Assistance (AA) children placed in Texas from another state will receive a TOA No Cash from DFPS in Texas. However, the child may receive an FC or AA payment from the home state. When a child is receiving FC or AA in Texas and is from another state, the advisor must contact the home state to verify any countable legally obligated income.

Examples:

A child receives SSI. DFPS removes the child from the custody of her mother. DFPS becomes the payee for the child’s SSI.

The child is placed with a foster parent. The child receives FC – Federal Match – With Cash. The foster parent chooses to include the child in the foster parent’s SNAP household. The child is added to the foster parent’s SNAP EDG. Since the child receives an FC payment, DFPS retains the child’s SSI. The FC payment and SSI are not budgeted in the SNAP EDG because the FC payment is exempt income and DFPS keeps the SSI income.

Months later, DFPS places the child with her great-aunt. The child now receives FC – Federal Match – No Cash. The child’s great-aunt chooses to include the child in the great-aunt’s SNAP household. The child is removed from the former foster parent’s EDG and is added to her great-aunt’s EDG and SNAP EDG. DFPS remains the payee for the child’s SSI but sends it to her great-aunt. The SSI must be counted in the SNAP budget.

Several months later, DFPS places the child back with her mother; however, DFPS retains conservatorship. The child continues to receive FC – Federal Match – No Cash. DFPS informs the SSA that the child now resides with her mother. The child’s mother must inform SSA to have the child’s SSI sent to her. The SSI must be counted in the SNAP budget.

Note: DFPS does not become the payee for children who receive adoption assistance.

Revision 21-1; Effective January 1, 2021

Revision 21-2; Effective April 1, 2021

Alimony payments, also referred to as spousal support, are payments received from a spouse or former spouse under a divorce or separation agreement.

Count alimony received as unearned income for the person receiving the payment.

If the divorce or separation agreements that include alimony payments were executed or last modified:

on or before Dec. 31, 2018, count alimony received as unearned income for the person receiving the payment.

after Dec. 31, 2018, do not count alimony received in the household’s budget.

Revision 15-4; Effective October 1, 2015

An annuity is a series of payments paid under a contract and made at regular intervals over a period of more than one full year. Payments can be either fixed (under which one receives a definite amount) or variable (not fixed). An individual can buy the contract alone or with the help of an employer.

Annuity payments are counted as unearned income.

Revision 15-4; Effective October 1, 2015

Capital gains are profit from the sale of property or of an investment when the sale price is higher than the initial purchase price (for example, profits from the sale of stocks, bonds, or from the sale of real estate).

Capital gains are exempt.

Capital gains are counted as unearned income.

Revision 24-3; Effective July 1, 2024

For specific types of housing allowances follow:

military pay allotments and allowances policy; or

government housing assistance policy.

If the employer garnishes or diverts a household member's wages and pays them to a third party to cover a housing expense like rent, the payments made to the third party are counted. However, if the employer pays the household’s rent directly to the landlord and pays the household its regular wages, the rent payment is excluded from income.

Similarly, if the employer provides a housing allowance to an employee along with wages, exclude the value of the housing allowance from the employment income.

Count all other housing allowances as unearned income.

Housing allowances provided as compensation for ordained, commissioned or licensed members of the clergy are excluded from MAGI budgeting if:

the employing church or organization officially designates the payment as a housing allowance before it makes the payment;

the total amount of the allowance does not exceed the total cost of renting or purchasing the home, including furnishings and utilities; and

the amount of the allowance does not exceed the value of the services the person provides as a member of the clergy. If the housing allowance exceeds the housing costs or value of services provided, count the excess amount as earned income.

Housing allowances not addressed in this section, military pay allotments and allowances policy, or government housing assistance policy are counted as unearned income.

Military Pay Allotments and Allowances, A-1323.3 Government Housing Assistance, A-1324.4 Vendor Payments, A-1334

Revision 15-4; Effective October 1, 2015

Life estate income is income an individual receives from ownership of property that an individual only possesses ownership of for the duration of one’s life (for example, rental income).

Life estate income is counted as unearned income.

Revision 15-4; Effective October 1, 2015

Jury duty pay is taxable income received from jury duty as compensation.

Jury duty pay is exempt.

Jury duty pay is counted as unearned income.

Revision 15-4; Effective October 1, 2015

Court awards are taxable money that an individual receives as the result of a lawsuit (for example, compensation for lost wages or punitive damages awards).

Follow policy in A-1331, Lump-Sum Payments.

Court awards income is counted as unearned income.

Revision 15-4; Effective October 1, 2015

Canceled debts are debts that have been canceled, forgiven, or discharged, and the canceled amount is included as countable income on federal income tax returns (for example, loan foreclosures or canceled credit card debt).

Canceled debt income is exempt.

Canceled debt income is counted as unearned income.

Revision 17-1; Effective January 1, 2017

Achieving a Better Life Experience (ABLE) programs allow individuals (beneficiaries) who become blind or disabled before age 26 to establish tax-free savings accounts for the designated beneficiary's disability-related expenses.

Contributions to an ABLE account from individuals other than the designated beneficiary, and any distributions from an ABLE account, are not considered income to the designated beneficiary.

Income of the designated beneficiary, or an individual whose income is considered when determining eligibility, that is deposited into an ABLE account, remains countable income when determining eligibility.

Interest and dividends earned on an ABLE account are exempt.

Interest and dividends earned on an ABLE account are countable as unearned income.

Achieving a Better Life Experience (ABLE) Accounts; A-1231.6

Revision 17-1; Effective January 1, 2017

School-Based Savings Accounts are accounts set up by students or their parents at financial institutions that partner with school districts. The accounts are intended to help students save for higher education.

Interest earned on School-Based Savings Accounts is exempt.

Interest earned on School-Based Savings Accounts is countable as unearned income.

School-Based Savings Accounts, A-1231.7

Revision 18-1; Effective January 1, 2018

MyGoals payments are cash payments received by participants in the MyGoals for Employment Success demonstration project. The demonstration studies the impact of combining workforce development and financial payments on employment outcomes for recipients of the Housing and Urban Development, Section 8 Rental Assistance. Only residents within the jurisdiction of the Houston Housing Authority are selected to participate in the project.

MyGoals payments are counted as cash contributions made by a private, nonprofit organization according to policy in A-1326.1 , Cash Gifts and Contributions.

Revision 18-2; Effective April 1, 2018

Count the gross amount of winnings as unearned income in the month received, regardless of the frequency of pay. The Data Broker information includes debt offset (recoupment) information.

Example: Applicant wins $1,000/month; however, there is a debt offset (recoupment) of $100 from the OAG for child support. The income budgeted will be $1,000.

Note: Some winners may elect to place their winnings in a trust fund.

Trust Funds, A-1326.10 Trust Funds, A-1237 Payments Exempt as a Resource While Being Considered Income, A-1243 Texas Lottery Commission, C-825.18

Revision 08-1; Effective January 1, 2008

Revision 21-3; Effective July 1, 2021

There are two eligibility tests for TANF.

The budgetary needs test is the first eligibility test for the household. It applies to all households who have not received TANF in the last four months (in Texas or another state).

If an unmet need of less than 50 cents remains, the household is ineligible.

The recognizable needs test is the final eligibility test for the household. This test applies to all applicants and certified households.

The recognizable needs test has two parts. Applicant households (those subject to the budgetary needs test) must pass both Part A and Part B. All other households must pass only Part B.

If an unmet need of one cent or more remains, the household is eligible.

Include all countable earned and unearned income. Follow the steps below:

Total the gross earned and unearned income for each person.

Add applied income amount. Applied income is the countable amount of income after allowing deductions for tax dependents, child support, alimony, and people a legal parent is legally obligated to support.

Subtract the child support disregard, if applicable.

Subtract the standard work-related expense (not to exceed the household member's monthly earned income) for each qualifying member with countable earnings.

Subtract each member's allowable costs for dependent care (up to the maximum).

Subtract any child support expense.

Compare the net income to the budgetary needs amount. If the net income or unmet need is 50 cents or more, the household passes the budgetary needs test.

Note : If there is a diversion amount and someone other than the person with diversions has count income (or two household members with joint diversions both have countable income), each member's income or earned income deductions are computed separately until the actual amount allowed to be diverted from each person's income is subtracted. Then the total net incomes are combined.

When two members have joint diversions, any amount of the diversion that exceeds one member's income can be diverted from the other member's income using the steps below:

Subtract 1/3 of the net income for applicants with earned income who have not been active TANF in the last four months.

Subtract 90 percent of the remaining earnings (up to a cap of $1,400). Allow this deduction for each employed household member who is eligible for it. The person can receive this deduction for four months in a 12-month period. The four months do not have to be consecutive. Note: Do not count a month in which a full-family sanction is imposed as one of the 90 percent earned income deduction (EID) months.

Note: If there is a diversion amount and someone other than the person with diversions has countable income (or two members with joint diversions both have countable income), each member's income and earned income deductions are computed separately until after subtracting the actual amount allowed to be diverted from each person's income. Then the adjusted gross incomes are combined.

When two members have joint diversions, any amount of the diversion that exceeds one member's income can then be diverted from the other member's income.

For each household member with earnings, the deductions cannot exceed the person's total income. This also applies when there is more than one household member with earnings, diverted income or both. The adjusted income should be compared to the recognizable needs amount. If the adjusted income is one cent or more, the household passes the recognizable needs test. The adjusted income is subtracted from the maximum grant amount to determine the benefit amount.

Child Support Deductions, A-1421 $75 Disregard Deduction, A-1422 Dependent Care Deduction, A-1423 Diversions, Alimony, and Payments to Dependents Outside the Home, A-1424 Work-Related Expense ($120 and 20%), A-1425.1 1/3 Disregard for Applicants, A-1425.2 90% Earned Income Deduction, A-1425.3 Income Limits, C-111

There are two eligibility tests for SNAP.

Gross income is the total countable income. This test applies to all households except those:

with a member who is elderly or has a disability; or

that are categorically eligible.

To be considered categorically eligible, all household members must be approved for TANF or SSI, or a combination of TANF and SSI, or the household must meet resource criteria and have gross income below or equal to 165 percent Federal Poverty Level (FPL) for its size.

A household subject to the gross income test is ineligible if unrounded gross income exceeds the limit by one cent or more.

Note: For households with a deductible farm loss, the loss is subtracted before applying the gross income test.

Households with Elderly Members or Members with a Disability, B-430

Net income is the gross income minus allowable deductions. This test applies to all households, except categorically eligible households.

Note: The net income test applies to a household with a member who is elderly or has a disability if the household’s gross income exceeds 165 percent FPL and the household does not meet categorically eligible requirements.

If a household's rounded income exceeds the net income limits, the household is ineligible. Fifty cents or more is rounded up and 49 cents or less is rounded down. The EDG is denied if net income results in zero allotment for the initial and ongoing months.

TIERS will assign the appropriate income test at Eligibility Summary after running Eligibility Determination Benefit Calculation (EDBC).

Benefits, A-2322 Maximum Income Limits, C-121

For Medical Programs, Modified Adjusted Gross Income (MAGI) financial eligibility is determined by comparing the applicable program income limit and the MAGI household income calculated using Step 1 through Step 5 below.

Follow the five steps below in the specified order for each person applying for benefits to determine MAGI financial eligibility for each person.

Step 1 — Determine MAGI Household Composition

The MAGI household composition for the person will be used to complete Steps 2, 3, 4, and 5.

Step 2 — Determine MAGI Individual Income

Identify and list all income, expenses, and overpayments for each person in the MAGI household.

Form H1042 , Modified Adjusted Gross Income (MAGI) Worksheet: Medicaid and CHIP, is used for each person included in the person’s MAGI household composition to list and calculate:

earned income, excluding any pretax contributions;

unearned income;

self-employment income;

American Indian/Alaska Natives (AI/AN) disbursement;

overpayments; and

expenses.

Step 3 — Determine Whether Any Exemptions Apply to MAGI Household Income

If a person meets one of the following exceptions for the taxable year in which Medicaid or Children’s Health Insurance Program (CHIP) eligibility is requested, their MAGI individual income is not included when calculating MAGI household income (as explained in Step 4 ).

Exception 1:

A person is a child (natural, adopted or step), regardless of age, who is:

included in the MAGI household composition of a parent or whose MAGI household composition includes a parent; and

not expected to be required to file a federal income tax return since the child’s monthly income is below the monthly Internal Revenue Service (IRS) income threshold.

Exception 2:

A person is a tax dependent who is:

included in the MAGI household composition of the taxpayer claiming them as a tax dependent; and

not expected to be required to file a federal income tax return since the tax dependent’s monthly income is below the monthly IRS income threshold.

If a person meets the criteria for Exception 1 or 2 and does not have any income, it is not necessary to determine whether the person is expected to be required to file an income tax return because there is no income to compare with the IRS income threshold. Move to Step 4 at this point.

Note: Even if a person’s tax status is “non-taxpayer/non-tax dependent,” the person may be “expected to be required to file” a federal income tax return based on the IRS threshold amounts.

For a person who is expected to be required to file a federal income tax return, all MAGI Individual Income from Step 2 counts in every household composition in which that person is included.

If a child meets Exception 1:

their income is excluded from the MAGI household income of every applicant or recipient whose MAGI household composition includes that child; and

the child’s income is exempt from their own MAGI household income.

If a tax dependent meets Exception 2:

the tax dependent’s income is excluded from the MAGI household income of the taxpayer who plans to claim that person on a federal income tax return for the taxable year in which the taxpayer is requesting Medicaid or CHIP eligibility; and

this tax dependent’s MAGI Individual Income counts in their own MAGI household income and counts in the MAGI household income of everyone else in whose MAGI household they are included.

If a person meets the criteria for both exceptions (a child (regardless of age) included in the MAGI household composition of a parent and a tax dependent included in the MAGI household composition of the taxpayer), Exception 1 applies. Exception 1 is more beneficial for the child because the child’s income would then be exempt from the child’s MAGI Individual Income.

Example: A child (regardless of age) lives with her mother, has no income, and her mother expects to claim the child on her federal income tax return. The child would meet Exception 1 and Exception 2. For the purposes of exempting the child’s income, the child (regardless of age) is considered a child who is included in the MAGI household composition of a parent whose MAGI group includes a parent (Exception 1). Because the child has no income to exempt, there is no need to compare her income to the tax thresholds. If the child did have income under the threshold, it would be more beneficial to allow her Exception 1 so that her income would not be counted on her own MAGI household income.

Example : Grandma Mary and Grandpa John expect to file taxes jointly and claim their three grandchildren, Sally, 8, Lucy, 12 and Mike, 14, as tax dependents. Grandma Mary and Grandpa John have not adopted their grandchildren. Grandma Mary applies for medical assistance for her grandchildren but does not apply for medical assistance for herself or Grandpa John.

Sally, Lucy, and Mike each receive $1500 a month in Social Security survivor benefits (SSB). The children meet a tax dependent exception because they are claimed as a tax dependent by a taxpayer who is not their spouse or parent. Their MAGI household compositions are determined using the non-taxpayer and non-tax dependent rules.

The MAGI household for each child includes the three siblings (Sally, Lucy and Mike) and the survivor benefits count in each child’s own MAGI household income and in the MAGI household income of their siblings. If Grandma Mary and Grandpa John had applied for medical assistance, the children’s survivor benefits would NOT count in their MAGI household income.

Step 4 — Calculate MAGI Household Income

First, the MAGI Individual Income for each person included in the applicant’s or recipient’s MAGI household composition is calculated by:

adding earned income, unearned income, self-employment income, and AI/AN disbursements (if AI/AN status is not verified per policy or the income source is not verified);

subtracting overpayments; and

subtracting expenses.

Income and Expenses Person 1 Person 2 Person 3 Person 4 Total earned/unearned income Add + + + + Total self-employment Income Add + + + + Total AI/AN disbursement Subtract - - - - Total recoupment of overpayments Subtract - - - - Total expenses Equals = = = = MAGI Individual Income

Second, the MAGI Individual Income for all people included in the applicant’s or recipient’s MAGI household composition must be totaled. Anyone’s income (as applicable) based on Exceptions 1 and 2 from Step 3 is exempt.

Add MAGI Individual Income + + + =

Third, the standard MAGI income disregard, by MAGI household size, must be subtracted from the sum of the MAGI Individual Incomes to get the MAGI household income. The standard MAGI disregard is an income disregard equal to five percentage points of the FPL. It is a standard amount based on the applicable household size across all Medical Programs that use MAGI rules to determine income.

Ex. Sum of MAGI Individual Incomes subtract Standard MAGI Disregard equals MAGI Household Income

Note: The standard MAGI income disregard is updated annually based on the annual updates to the FPL.

Step 5 — Determine MAGI Financial Eligibility

The person’s eligibility is determined by comparing whether the applicant’s or recipient’s MAGI household income is less than or equal to the income limit of the applicable program based on FPL and MAGI household size.

Steps 1 to 5 must be repeated for each person applying for Medical Programs.

Medical Programs, A-240 Who Is Included, A-241.1 Verification Requirements, A-1370 Income Limits, C-131 Standard MAGI Income Disregard, C-131.4 IRS Monthly Income Thresholds, C-131.5 Guidelines for Providing Retroactive Coverage for Children and Medical Programs, C-1114

Revision 24-4; Effective Oct. 1, 2024

The TANF grant amount is the amount of the monthly benefit. The TANF grant is approximately 17 percent of the Federal Poverty Level (FPL) . The federal government periodically adjusts the FPL.

After the household passes the recognizable needs test, the recommended grant amount is calculated. Subtract the household's adjusted gross income, rounded down to the nearest dollar, from the maximum grant amount allowed for the household's size and composition.

The minimum grant amount is $10. The household is eligible to receive the minimum grant if the recommended grant amount is less than $10.

Benefits of less than $10 are issued only for:

supplemental payments; and

payments made after processing a recoupment.

Income Limits, C-111

Revision 15-4; Effective October 1, 2015

A household's income is computed to determine eligibility and benefit amount. Household income is computed by using:

actual income (income that was already received), or

projected income amounts (not received but expected).

Notes:

Both actual income amounts and projected income amounts for the current month are used to determine eligibility and benefits.

For households paid on a monthly or semi-monthly basis, income is counted for the month it is intended if the household receives: the income in a different month because of a change in the mailing cycle or pay date; or an additional or missed payment because of weekends or holidays.

Exception: A-1355.2 , How to Use Texas Workforce Commission (TWC) Quarterly Wage Information to Budget Earned Income, may be used when using the TWC wage record to calculate income.

If a child lives with a married relative (not a parent) who wants to be the caretaker, eligibility and benefits are determined using:

normal budgeting for the applicant's income, and

stepparent budgeting for the income of the applicant's spouse.

See A-1341 , Income Limits and Eligibility Tests, for Medical Programs.

Revision 15-4; Effective October 1, 2015

Income that is irregular and unpredictable is exempt if both of the following conditions apply:

The anticipated income will be less than or equal to $30 per household in a federal fiscal quarter; and

The individual receives the income too infrequently or too irregularly to reasonably anticipate it. "Reasonably anticipate" means the individual knows: who the income will come from, in what month it will be received, and how much it will be.

Revision 15-4; Effective October 1, 2015

Terminated income counts in the month received. Actual income must be used and conversion factors are not used if terminated income is less than a full month's income.

Income is terminated if it will not be received in the next usual payment cycle.

Income is not terminated if:

someone changes jobs while working for the same employer;

an employee of a temporary agency is temporarily not assigned;

a self-employed person changes contracts or has different customers without having a break in normal income cycle; or

someone receives regular contributions, but the contributions are from different sources.

Revision 15-4; Effective October 1, 2015

If actual or projected income is not received monthly, the income should be converted to monthly amounts using one of the following methods:

Divide yearly income by 12.

Multiply weekly income by 4.33.

Add amounts received twice a month (semi-monthly).

Multiply amounts received every other week by 2.17.

Note: A-1355.2 , How to Use Texas Workforce Commission (TWC) Quarterly Wage Information to Budget Earned Income, can be used for converting TWC wages.

Revision 15-4; Effective October 1, 2015

The following procedures should be followed if an individual has a new source of semi-monthly income and has not received enough checks to reliably project the income:

Determine the estimated number of hours the individual will work per week.

Estimate weekly gross income by multiplying the weekly estimated hours by the hourly wage.

Determine the monthly projected gross income by multiplying the estimated weekly gross income by 4.33.

To determine the semi-monthly income amount to enter on the income screen, divide monthly gross income by two.

Revision 15-4; Effective October 1, 2015

Actual income is income that has already been received. Actual income is budgeted by:

determining the actual income received in a past month; and

converting the averaged amount to a monthly amount. See A-1353 , How to Convert Income to Monthly Amounts, for instructions on how to convert income to a monthly amount.

Actual income should not be converted when:

determining eligibility for three months prior Medicaid; or

the income received from a new or terminated source is less than a full month's income.

Note: A-1355.2 , How to Use Texas Workforce Commission (TWC) Quarterly Wage Information to Budget Earned Income, can be used for budgeting TWC wages.

Revision 20-4 Effective October 1, 2020

Projected income is income a person has not received, but expects to get. To project income:

Evaluate the household's income and circumstances with the person.

Budget income in the month the person anticipates getting it. Budget:

actual income received as of the interview date (or the date the information was requested); and

income that can be reasonably anticipated for pay periods after the interview or information request date. "Reasonably anticipated" means the person knows: the source of the income; in what month the person will get the income; and what amount of income the person will get.

When a person does not get income monthly but anticipates getting a full month's income, convert it to a monthly amount using conversion factors.

When a person gets an additional payment outside the regular payment cycle, convert the regular payments and add the additional payment to the converted amount.

Note: To determine the date income can be reasonably anticipated, use factors specific to the source of income, distance it travels through the mail, electronic transfers, weekends and holidays.

For people getting unemployment insurance benefits, determine the availability of funds in the account by adding one business day to the payment date listed on the Texas Workforce Commission Inquiry Benefit Payment screen.

For child support payments disbursed through the Texas debit card, follow policy in A-1326.2.1 , Counting Child Support.

If income is ongoing, but the amounts fluctuate, it is best to anticipate income by averaging income from past pay periods. When using this method:

Verify at least two pay amounts in the time period beginning 45 days before the file date through the interview date (or the date the EDG is being processed if an interview is not required).

Continue to enter amounts for all pay periods in the required budget months, using either year-to-date (YTD) amounts or the average amount of received payments for any unverified pay dates.

If the household states the payments are representative of current income, use YTD amounts, if available, for missing pay periods and use the average amount of verified payments for other unverified pay periods in all budget months. Use more than two pay amounts if they are available, but do not pend to require more than two pay amounts when a person says the pay amounts are representative of current income and the statement is not questionable.

Exception: For Children's Medicaid, see policy in A-1371 , Verification Sources.

Use a different method to anticipate income when someone has a new job, seasonal fluctuations occur, or expected changes (such as changes in work hours or rate of pay) cause too many past amounts to be unrepresentative of current income.

Different methods of anticipating future income are:

asking the employer for an estimate;

using less than the required number of pay periods when they are not all available;

multiplying anticipated hours by the rate of pay; or

other methods.

Document the reason and calculations for the method used.

Example: When an applicant has paychecks, use the YTD amounts to find any missing pay amounts, if possible. In this situation, the gross pay on the checks is representative of current income.

Pay Date Gross Pay Amount YTD 05/11 (missing paycheck) (missing paycheck) 05/25 $265.50 $4,675.93 06/09 (missing paycheck) (missing paycheck) 06/23 $262.84 $5,199.18

You must have the checks before and after the missing paycheck. Take the YTD gross amount of the check prior to the missing paycheck and subtract it from the check received directly after the missing paycheck.

$5,199.18 YTD of check dated 06/23 - $4,675.93 YTD of check dated 05/25 = $523.25 Difference of the YTD amounts

Then subtract the gross pay amount of the paycheck received after the missing paycheck from the difference of the YTD amounts.

$523.25 Difference of the YTD amounts - $262.84 Gross pay amount of check dated 06/23 = $260.41 Gross pay amount of check dated 06/09

Then add the three amounts together and divide by three to determine the average for the other missing pay period.

$265.50 Gross amount of 05/25 + $260.41 Gross amount of 06/09 + $262.84 Gross amount of 06/23 = $788.75 ÷ 3 Total of three checks then divide by three = $262.92 Average to use for check dated 05/11

Verify that a source of income (earned or unearned) does not fluctuate.

Verify the frequency of the payment.

Require gross pay from only one payment received in the 45 days before the file date through the interview date if the person states the frequency and gross pay have not changed. Use this income amount for unverified pay periods in all budget months.

Exception: Do not apply this policy to sources of income that involve fluctuations in pay due to overtime, tips, commission, bonuses, hourly wages, etc.

Examples:

At initial certification, a person gave proof he is paid a weekly gross salary of $400 with no fluctuations. He is now being interviewed for a SNAP redetermination and has one pay stub dated within 45 days of the application file date showing earnings of $400 for the week. He states there have been no changes in his weekly gross pay or the pay frequency. One pay stub is acceptable proof in this example, because the pay amount and frequency were previously verified and the person stated the pay amount and frequency have not changed.

Another person is being interviewed for a SNAP application and has one pay stub dated within 45 days of the application file date. She states she is paid a weekly gross salary of $500 and that her pay does not fluctuate. The employer verifies the pay frequency and that the gross amount does not fluctuate. Accept the single pay stub as proof of gross pay and do not pend for other pay stubs unless the income is otherwise questionable.

Revision 15-4; Effective October 1, 2015

If income is received more than once a month, monthly converted amounts are used to compute the monthly average. If the monthly income fluctuates, the household may choose to average its monthly income over the entire certification period. The advisor must determine the household's eligibility and benefits based on the average income.

Exception: The income of destitute households must not be averaged over the certification period.

Revision 21-2; Effective April 1, 2021

The quarterly wage records displayed on TWC inquiry reflect wages earned in the quarter ending as late as one month before the current calendar month. However, because the wage records are updated quarterly, wages may be further in the past. TWC quarters are displayed as a number corresponding to the quarter of the year in which the wages were earned, as illustrated below:

The first quarter is January through March and is displayed as a 1 and the corresponding year.

The second quarter is April through June and is displayed as a 2 and the corresponding year.

The third quarter is July through September and is displayed as a 3 and the corresponding year.

The fourth quarter is October through December and is displayed as a 4 and the corresponding year.

Use the gross monthly amount determined from using TWC wage records, when applicable, in all of the following budget months:

application; and

ongoing.

Note: A-831.3 , Income Computation, may be used when determining the budget for prior Medicaid months.

Use the following chart to determine payment amounts when using TWC wage records to budget earned income.

Did the person receive three full months of income in this quarter? then use one of the following calculations: Yes Weekly – Divide the quarterly amount by the number of pay periods in the selected quarter. Bi-Weekly – Divide the quarterly amount by the number of pay periods in the selected quarter. Semi-Monthly – Divide the quarterly amount by 3 and then divide the monthly amount by 2. Monthly – Divide the quarterly amount by 3. Quarterly – Use the quarterly amount. No Weekly – Divide the quarterly amount by 3 and then divide the monthly amount by 4.33. Bi-Weekly – Divide the quarterly amount by 3 and then divide the monthly amount by 2.17. Semi-Monthly – Divide the quarterly amount by 3 and then divide the monthly amount by 2. Monthly – Divide the quarterly amount by 3. Quarterly – Use the quarterly amount.

Note : TIERS uses the calculations in the chart above to derive the Calculated Payment value on the "TWC Inquiry" section of the Employment Payments screen.

Before using TWC quarterly wage information as a verification source for earned income, use the preferred methods of verification for the applicable program.

The following sources continue to be the preferred methods of wage verification if they are available without having to pend the EDG to obtain them:

the most recent consecutive check stub(s); or

Form H1028 , Employment Verification.

If these preferred sources of verification are not available during the interview, or when processed if no interview is required, and it would be necessary to pend for wage verification, the TWC quarterly wage information should be used as verification as explained below.

Using TWC Quarterly Wage Information as Verification of Earned Income Did the person receive pay for all pay periods in all months of the most recent quarter posted from the current employer, and none of the months includes leave without pay or a change in work hours from full-time to part-time? Yes– Continue No – Pend for other wage verification Is the person still employed by the employer listed on the most recent TWC quarter? Yes– Continue No – Pend for other wage verification Is the person's pay rate the same now as it was for each month of the most recent quarter reported to TWC? Yes– Continue No – Pend for other wage verification After discussion with the person, do they agree that the result is representative of anticipated future gross wages per pay period? Note: Convert the income to the frequency the person receives the income before discussing with them whether the earnings shown in TWC records are representative of current and/or future earnings. Yes – Use TWC wage record as verification No – Pend for other wage verification

Note: Verify tip income not included on a person's wage statement by obtaining a signed and dated statement from the person.

If the person's reported income is not reasonably compatible with electronic data sources, pend for verification of earned income and determine whether the TWC quarterly wage information can be used as verification of earnings. The TWC wage record may be used as a verification source if both of the following conditions are met:

the current employer listed on the Medicaid application or redetermination form matches the employer listed on the most recent TWC wage record; and

all household members for whom the household is applying are eligible based on the TWC quarterly wage information.

Convert the quarterly wage data to monthly income amounts, as described above.

If the income reported on the application or redetermination form makes the household ineligible, do not require the verification of earnings. If a member is ineligible based on the TWC data but appears eligible based on wages reported on the application form, request other income verification.

Note: If the TWC quarterly wage data is older than the verification used in the current SNAP budget, use the SNAP budget to determine eligibility for Medicaid applications or renewals.

Income Computation, A-831.3 Verification Requirements, A-1370 Verification Sources, A-1371

Revision 15-4; Effective October 1, 2015

If income is received less often than monthly, the income is prorated over the period covered.

If income is received less often than monthly, the income:

counts in the month received, or

is prorated over the period the income is intended to cover (at the individual's option).

Exception: Income of destitute farm workers is not prorated.

Revision 14-1; Effective January 1, 2014

Action Type Budgeting Application For past months, use the actual amounts for the entire month and use the appropriate conversion factor. For three months prior, use the actual amounts received for the entire month but do not use a conversion factor. For the interview month, use a combination of actual amounts (amounts that have already been received) and projected amounts for amounts that have not been received yet, based on policy in A-1355 , How to Project Income. For future months, project amounts. For TWC, see A-1355.2 , How to Use Texas Workforce Commission (TWC) Quarterly Wage Information to Budget Earned Income. Untimely redetermination – interview after the last benefit month For past months, use the actual amounts for the entire month and use the appropriate conversion factor. For three months prior, use the actual amounts received for the entire month but do not use a conversion factor. For the interview month, use a combination of actual amounts (amounts that have already been received) and projected amounts for amounts that have not been received yet, based on policy in A-1355 , How to Project Income. For future months, project amounts. For TWC, see A-1355.2 , How to Use Texas Workforce Commission (TWC) Quarterly Wage Information to Budget Earned Income. Untimely redetermination – interview during the last benefit month For the new certification period, project amounts. For TWC, see A-1355.2 , How to Use Texas Workforce Commission (TWC) Quarterly Wage Information to Budget Earned Income. Timely redetermination For the new certification period, project amounts. For TWC, see A-1355.2 , How to Use Texas Workforce Commission (TWC) Quarterly Wage Information to Budget Earned Income. Changes Project amounts. Claims/Restored benefits Use actual amounts.

Revision 15-4; Effective October 1, 2015

Only household expenses expected during the certification period should be considered to determine eligibility and benefits.

Expenses should be projected using the most recent month's bills and any anticipated increases or decreases. The household may choose to average expenses if they are anticipated to fluctuate or occur less often than monthly.

If the individual is billed for expenses weekly, biweekly or semi-monthly, the income conversion factors found in A-1353 , How to Convert Income to Monthly Amounts, may be used to determine monthly expenses.

Budgeting MAGI expenses is explained in A-1411 , Rules That Apply to Deductions, Medical Programs.

Revision 05-1; Effective January 1, 2005

Revision 15-4; Effective October 1, 2015

Children and pregnant women with unpaid medical bills must first be determined ineligible for Medicaid or CHIP before being considered for TP 56 or TP 32.

TP 56 and TP 32 use MAGI rules to determine financial eligibility as explained in A-1341 , Income Limits and Eligibility Tests, Medical Programs, with the following exception.

Exception: When calculating MAGI household income in Step 4 for TP 56 and TP 32, the only income that is included for the applicant or recipient is income from the following individuals, if these individuals are in the applicant's or recipient's MAGI household composition:

The applicant;

The applicant's parents, if the applicant is under age 19; and

The applicant's spouse (if applicable).

Informing individuals about spend down is explained in A-1532.1 , Spend Down EDGs.

Revision 15-4; Effective October 1, 2015

Children and pregnant women must be determined ineligible for Medicaid or CHIP before being considered for TP 56 or TP 32 coverage for three months prior to the application month and must have:

unpaid medical bills during the prior month(s), or

received Medicaid services from the Texas Department of State Health Services during the prior months.

Advisors must determine financial eligibility for TP 56 and TP 32 for the three months prior to the application month by following the MAGI rules as explained in A-1359.1 , Determining Eligibility/Spend Down for the Application and Following Months.

Children and pregnant women may be determined eligible for TP 56 or TP 32 coverage for any month in the three months prior to the application month. Advisors must notify the applicant of the eligibility determination for each month.

Revision 15-4; Effective October 1, 2015

The following procedures are used to notify the Medically Needy Clearinghouse (MNC) when:

a correction must be made to a TP 56 EDG with spend down; and

the Clearinghouse has not processed the EDG.

The claims administrator at 1-800-252-8263 is the contact entity to speak with someone concerning a Medicaid EDG with spend down. Advisors should have access to the following information concerning the EDG before calling:

EDG name;

EDG number;

advisor's name;

advisor's employee number and mail code;

advisor's telephone number; and

all information about the change.

Revision 12-3; Effective July 1, 2012

Revision 15-4; Effective October 1, 2015

Diversion policy in A-1424 , Diversions, Alimony, and Payments to Dependents Outside the Home , applies.

Advisors should deduct child support payments (current or arrears) that a household member is legally obligated to pay and that member or another household member:

actually pays to an individual outside the SNAP household; or

actually pays for an individual outside the SNAP household; or

makes to a child support agency.

Revision 15-4; Effective October 1, 2015

Allowable child support payments may be in the form of:

cash support;

medical support; or

payments to third parties.

To be an allowable deduction, these payments must be ordered by a court or administrative authority and be equal to or less than the household's child support obligation.

Payments for alimony or spousal support are not deductible.

Revision 24-2; Effective April 1, 2024

Child support collected through a tax intercept is not an allowable child support deduction.

A child support payment may be owed by one household member but paid by another member. The child support expense for the household member paying the expense is allowed.

If the household member with the legal obligation or the household member paying the legal obligation leaves the home, the household's eligibility for the deduction must be redetermined.

A child support deduction for households that pay legally obligated child support is allowed. For current support, a deduction up to and including the legally obligated amount is allowed. For arrears, only the amount a household member actually pays is allowed.

For households with new obligations, the anticipated amount is budgeted if the household member can reasonably explain the basis for future payment. For households with previous payments, the amount, not to exceed the legal obligation, is averaged and projected over the certification period. Consider any other anticipated changes that will affect the payment.

When child support is collected by an employer through wage garnishment or by the custodial parent through a private collection agency, the absent parent may be charged a processing fee. The processing fee is not an allowable expense. Only the legally obligated amount a household member pays is allowed as a deduction, even if a processing fee is added or subtracted from the gross amount of the child support.

If a household member pays child support in advance, the household is eligible for the child support deduction. The household is allowed the option of deducting the entire amount in the month paid or averaging the amount over the period it is intended to cover.

If legally obligated child support is paid by a household member who is disqualified due to then intentional program violation , employment sanction, felony drug convictions or being a fugitive, deduct the entire amount of eligible child support paid. alien status, citizenship, Social Security number or ABAWD work requirement, prorate the amount of eligible child support paid by the disqualified member. Deduct all but the disqualified member's share.

The full child support expense is deducted when another household member pays the legally obligated child support on behalf of a disqualified member.

SNAP — Budgeting for Members Disqualified for Citizenship, SNAP ABAWD Work Requirement or Noncompliance with Social Security Number Requirements, A-1362.3 SNAP — Budgeting for Persons Disqualified for Intentional Program Violations, SNAP Employment Services Non compliances, Felony Drug Convictions or Being a Fugitive, A-1362.4

Revision 15-4; Effective October 1, 2015

Up to $75 of child support received before the certification date may be deducted.

Child Support, A-1326.2

Revision 23-1; Effective Jan. 1, 2023

The maximum dependent care deduction is:

$200 a month for each child under 2;

$175 a month for each child 2 or older; and

$175 a month for each adult with disabilities.

An earned income deduction is allowed for the actual cost of unreimbursed payments up to and including the maximum amount when the person incurs an expense for:

the care of a child or adult with disabilities, even when the child or adult with disabilities is not included in the certified group;

the transportation of a child or adult with disabilities to and from day care or school; or

activity fees associated with a structured dependent care program.

Note: Activity fees do not have to be a required cost to participate in the program, but the fees must be an explicitly defined cost.

The dependent care expense must be necessary for employment and incurred by an employed person included in the Temporary Assistance for Needy Families (TANF) budget group or who would be included except the person is disqualified for one of the following reasons:

non-compliance with Social Security Number (SSN);

third party resource;

failure to timely report a child’s temporary absence;

intentional program violation;

being a fugitive; or

having a felony drug conviction.

Allow the expense for household members who meet these requirements, even if there are other adults in the household who could care for the child or disabled adult. The person's expense may be considered necessary for employment, training, or school attendance if the child or adult with disabilities lives with the person at least one day a month.

The deduction in the budgetary and recognizable needs tests is allowed.

A deduction is allowed for the actual cost of unreimbursed payments when the person incurs an expense for:

the care of a child or adult with disabilities even when the child or adult with disabilities is not included in the certified group;

the transportation of a child or adult with disabilities to and from day care or school; or

activity fees associated with a structured dependent care program.

Note: Activity fees do not have to be a required cost to participate in the program, but the fees must be an explicitly defined cost.

The dependent care deduction is allowed if the expense is necessary for a household member to seek or continue employment, attend training or go to school.

Allow the expense for household members who meet one of the above conditions, even if there are other adults in the household who could care for the child or adult with disabilities. These expenses are deducted from earned or unearned income. The person’s expense may be considered necessary for employment, training or school attendance if the child or adult with disabilities lives with the person at least one day a month.

Disqualified Members, A-1362

TANF — Budgeting for a Household Member Disqualified for Noncompliance with SSN, TPR, Failure to Timely Report a Certified Child's Temporary Absence, Intentional Program Violation, Being a Fugitive or a Felony Drug Conviction, A-1362.2

Revision 21-2; Effective April 1, 2021

The following deductions from the income of a caretaker, second parent, or minor parent are allowed before either of the two needs tests are applied (after earned income deductions in the budgetary and recognizable needs tests):

Budgetary needs amount for a family size equal to the number of noncertified persons in the home whom the legal parent can claim as tax dependents or is legally obligated to support (including Supplemental Security Income [SSI] recipients). The needs figure applicable to the number of noncertified members is used. An amount for the needs of a dependent who is disqualified for a reason other than citizenship, alien status, time limits, or unmarried minor parent domicile requirement is not diverted.

Actual amount of child support and alimony a household member pays to persons outside the home.

Actual amount of a household member's payments to persons outside the home whom a household member can claim as tax dependents or is legally obligated to support.

When two household members are married or filing a joint tax return, any portion of their joint diversion amount that exceeds one person's income can be deducted from the other person's income.

Step 3 on Form H1100 , Addendum Income Worksheet , should be completed to allow this deduction.

If the divorce or separation agreements that include alimony payments were executed or last modified:

On or before Dec. 31, 2018, alimony paid by members of the MAGI household can be deducted.

After Dec. 31, 2018, alimony paid cannot be claimed as a MAGI deduction.

Revision 15-4; Effective October 1, 2015

The following table may be used when diverting for the needs of noncertified tax dependents in the home.

If the tax dependent is a ... then use the budgetary needs figure for ... parent, spouse (including spouse of child), or child age 19 or older, an adult.* child under age 19, a child. * If the number of persons whose needs are diverted includes more than two adults, use the chart figure for two adults and the number of children from the column labeled Caretaker EDGs With Second Parent. If there are a total of three adults, add an additional amount from the chart for the family size of one ($313); or if there are a total of four adults, add an additional amount from the chart for a family size of two ($498). Continue the pattern depending upon whether the number of additional adults is an odd number (5 = $498 + $313) or an even number (6 = $498 + $498).

When diverting for an 18-year-old child who turns age 19 during one of the budget months, the budgetary needs figure of an adult is used beginning with the month after the child turns age 19.

Revision 15-4; Effective October 1, 2015

Earned income deductions are the:

standard work-related expense (up to $120);

1/3 earned income disregard for applicants;

90 percent earned income deduction; and

dependent care costs.

An applicant or recipient does not qualify for deductions if:

income is gained from illegal activities, such as prostitution and selling illegal drugs.

the individual did not notify the Texas Health and Human Services Commission (HHSC) timely about a new job or increased earnings without good cause. Allow the deduction for ongoing budgets, but do not allow it when determining an overpayment or supplemental budgets. Count the months it should have been budgeted as used months based on when the change would have been effective if the individual had reported it timely.

individual voluntarily quits a job without good cause within the 60 days prior to the: application file date, or after filing but before certification; or household addition request date, or after the request but before being added. Deductions are not allowed until the next complete review. Deductions beginning with the Texas Integrated Eligibility Redesign System (TIERS) effective month are allowed when processing the next complete review.

A 20 percent deduction of all gross earned income is allowed. See B-752 , Determining Claim Amounts, for exceptions.

Revision 15-4; Effective October 1, 2015

A work-related expense deduction of up to $120 a month (not to exceed the person's monthly earnings) is allowed from the earned income of each employed household member:

whose needs are included in the budget or certified group; or

who is a disqualified member.

In TANF, this deduction is allowed in the budgetary and recognizable needs test.

Allow a 20 percent deduction of all gross earned income.

Revision 15-4; Effective October 1, 2015

Applicant households that must pass the 100 percent budgetary needs test are also required to pass Part A of the 25 percent recognizable needs test. This Part A test allows the standard work-related deduction ($120) and a disregard of 1/3 of the remaining income. If the applicant fails this test, the household is ineligible for TANF.

Note: For this purpose, an applicant household is one that has not received TANF in any state in the four months before applying.

Revision 15-4; Effective October 1, 2015

Applicant households that pass Part A of the recognizable needs test and all other households must pass Part B of the test (see A-1341 , Income Limits and Eligibility Tests ). After subtracting the standard work-related expense, 90 percent of the remaining earnings (up to a cap of $1,400) is subtracted. This deduction is allowed for each employed household member who is eligible for it. The individual can receive this deduction for four months in a 12-month period. The four months do not have to be consecutive. Note: A month in which a full-family sanction is imposed is not counted as one of the 90 percent earned income deduction (EID) months.

The 12-month period is a fixed period that begins with the first month the 90 percent deduction is used. The first month that counts as a used month is the first month the individual receives a cash benefit that includes the 90 percent deduction. This period is referred to as the 90 percent EID eligibility period.

If the individual has not used all four months of the deduction within the 90 percent EID eligibility period, a new fixed 12-month period and four new months of the 90 percent EID are allowed after the first 12-month period ends. The new 12-month period begins with the first month that the individual uses the 90 percent deduction again.

If the household member received the 90 percent deduction for four months in a 12-month period, the member may not receive it again until:

TANF is denied and remains denied for one full benefit month; and

12 calendar months have passed since the denial. This 12-month period is known as the 90 percent EID ineligibility period and begins with the first full month of denial after the individual used the fourth month of the 90 percent deduction.

Revision 15-4; Effective October 1, 2015

A household member is eligible to receive the 90 percent EID if:

the individual has not previously received the deduction for four months in the individual's 12-month period; and

the individual's needs: are included in the certified group; or would be included except the individual is disqualified for noncompliance with child support, Social Security number (SSN), Choices, third-party resource (TPR) requirements, intentional program violation (IPV), or for reasons other than alien/citizenship status, TANF state time limit policies, and the TANF unmarried minor parent domicile requirement.

TIERS default settings automatically allow the 90 percent EID for eligible EDG members. The 90 percent EID page appears by choosing the screen from the left navigation bar. The effective begin and end dates are used to allow the deduction for specific months.

An individual may decline use of the deduction even if it results in EDG denial without its use. The individual may decline at any time, but the deduction may not be removed retroactively. Any removal from the budget will take effect according to timely change processing for future months.

If the client wishes to decline the deduction, the client answers "yes" to the questions, "Does individual decline the TANF 90 percent earned income deduction?" and "Does individual decline the FMA 90 percent earned income deduction?" on the 90 percent Earned Income Deduction – Details screen. TIERS requires answers for both questions.

Revision 15-4; Effective October 1, 2015

An individual is not allowed the deduction if any of the situations listed in A-1425 , Earned Income Deductions, apply to the individual .

An individual is not allowed the deduction if the member's needs are not included in the EDG because the member is disqualified due to:

alien/citizenship status;

TANF state time limits policies; or

TANF unmarried minor parent domicile requirement.

The deduction is not allowed if the individual has already received the 90 percent deduction for four months in a 12-month period. When the 90 percent ineligibility period ends, the deduction is not allowed again until the individual obtains new employment. The new employment must begin after the 90 percent ineligibility period ends.

Revision 15-4; Effective October 1, 2015

After the individual receives the 90 percent deduction for four months in a 12-month period, the deduction ends. TIERS automatically removes the deduction and rebudgets the EDG for the appropriate month based on advisor entries.

Revision 20-2; Effective April 1, 2020

Revision 15-4; Effective October 1, 2015

The homeless shelter standard shown in C-121.1 , Deduction Amounts , is budgeted for any month the household:

meets the definition of a homeless household ;

has any amount of out-of-pocket shelter expenses; and

chooses the standard.

Households that choose the homeless shelter standard are not entitled to any other shelter deductions or utility standards.

Note: Advisors must ensure that the household has out-of-pocket shelter expenses before allowing the deduction.

Revision 15-4; Effective October 1, 2015

A medical deduction is allowed for households with a member who meets the definition of elderly in B-431 , Definition of Elderly , or of having a disability in B-432 , Definition of Disability , if the:

member who is elderly or has a disability incurred the expense; and

medical expenses exceed $35 a month. If two or more people in the household qualify for a medical deduction, combine the medical expenses. If an applicant has been or will be reimbursed for a medical expense, deduct only the nonreimbursed amount.

Expenses that the household is still legally obligated to pay are allowed for someone who was a household member:

immediately before entering the hospital or nursing home; or

when the member died.

Revision 25-2; Effective April 1, 2025

Deductions are allowed for the following medical expenses:

medical care provided by a licensed practitioner or other qualified health professional, including a registered dietician;

dental care provided by a licensed practitioner or other qualified health professional;

psychotherapy care provided by a licensed practitioner or other qualified health professional;

rehabilitation care provided by a licensed practitioner or other qualified health professional;

hospitalization provided by a facility recognized by the state;

outpatient treatment provided by a facility recognized by the state;

nursing care provided by a facility recognized by the state;

nursing home care provided by a facility recognized by the state;

diapers for children with disabilities;

incontinence pads for the elderly or adults with disabilities;

drugs prescribed by a licensed practitioner, including insulin;

over-the-counter medication, including aspirin, ibuprofen, and medicated creams, when approved by a licensed practitioner or other qualified health professional;

medical supply costs, including rental costs, are deductible with a prescription or approval;

sickroom equipment costs, including rental costs, are deductible with a prescription or approval;

adaptive aids;

health insurance policy costs, including dental insurance and vision insurance costs;

hospitalization insurance policy costs, including hospital indemnity insurance costs;

Medicare premiums, cost-sharing and deductibles;

Spend Down expenses incurred by Medicaid recipients;

Medicaid Buy-In for Children (MBIC) premium payments;

dentures;

hearing aids;

prostheses;

service animal costs, including the costs of securing, maintaining, feeding, and visiting the veterinarian for any animal trained to serve the needs of a person with disabilities, such as a guide dog or dog to help the hearing impaired;

eyeglasses prescribed by a qualified health professional;

lodging costs to obtain medical services;

care costs, including the costs of maintaining an attendant, home health aide, child care provider or housekeeper necessary because of age or illness. If the household furnishes most of the attendant's meals, also include a deduction equal to the allotment for a one-person SNAP household. If the household has attendant care costs that could qualify under both medical and dependent care deductions, consider the cost a medical expense;

repayment of a loan used to pay medical expenses; or

transportation costs, including trips to the doctor, hospital, therapy, drug store, or paying someone to drive the person for medical services.

Note: When determining transportation costs, the person may choose to use 70 cents per mile instead of keeping track of actual expenses.

Deductions are not allowed for the following medical expenses:

the costs of policies that do not specifically cover medical costs such as income maintenance or lump sums for death or dismemberment;

food supplements that can be purchased with SNAP, such as Ensure and baby formula, even if prescribed by a physician;

paid or past due expenses billed before the initial certification period, meaning before the person was receiving SNAP;

medical marijuana, even if prescribed by a physician; or

herbal products which are a form of dietary supplements derived from plants used to improve or maintain one's health which usually do not require a prescription, including: melatonin; valerian root; echinacea; flaxseed; ginseng; ginkgo; St. John's wort and; garlic.

Income, A-1300

Revision 24-2; Effective April 1, 2024

Households that have a member who is eligible for a medical expense are eligible for a deduction using either the standard medical expense (SME) or actual medical expenses.

At then verify and budget application, if the household has medical expenses over $35 and $170 or less a month, the household has medical expenses over $35, the SME. application, if the household has medical expenses over $170 a month, actual medical expenses, actual monthly medical expense amount, if the household provides verification of medical expenses over $170; or the SME, if verified medical expenses are over $35 and $170 or less. If the household does not provide verification of medical expenses, do not allow a deduction $170, then allow the SME instead of actual. redetermination, if: the household already has medical expenses over $35 and $170 or less; and there is no change, or the amount changed but the monthly medical expense is still over $35 and $170 or less, no additional verification is required, the SME. redetermination, if SNAP budget does not already include the SME and the household states an eligible member has medical expenses over $35 and $170 or less, the household has medical expenses over $35, the SME. redetermination, if SNAP budget does not already include actual medical expenses and the household states an eligible member has medical expenses over $170, actual medical expenses, actual monthly medical expense amount, if the household provides verification of medical expenses over $170; or the SME, if verified medical expense is over $35 and $170 or less. If the household does not provide verification of medical expenses, do not allow a deduction. redetermination, if: the household has actual medical expenses over $170 already budgeted, and there is over a $25 change in the monthly amount, the change in medical expenses, the SME if the new total is over $35 and $170 or less; or actual medical expenses if the new total is over $170.

When the medical expense ends, staff must end-date the medical expense record in TIERS.

TIERS automatically subtracts $35 from the SME or actual medical expenses to determine the net amount of the medical deduction.

If a member is disqualified for:

SNAP Employment and Training (E&T), a felony drug conviction, IPV, refusal to cooperate with the quality control review process, or being a fugitive, and is billed for or pays medical expenses — the full deduction is allowed; or

SSN noncompliance, citizenship requirements, alien status, or the ABAWD work requirement, and is billed for or pays medical expenses for the disqualified member's own expenses or the medical expenses of another household member who is elderly or has a disability — the expense or the standard medical deduction is prorated among all household members and the pro rata share for people disqualified for SSN noncompliance, citizenship requirements, alien status, or the ABAWD work requirement is not allowed. The full medical deduction is allowed if the medical expenses are paid by an eligible household member.

If the disqualified person has the only income, the medical expenses are considered paid by the only person with income.

The following information describes how the SME or actual medical expenses are prorated in the event a disqualified member pays for some or all the allowable medical expenses.

Eligibility for the SME or actual medical expenses is determined based on verified medical expenses of all aged members or members with disabilities, including a disqualified member. The SME is used if the total verified medical expenses are over $35 and l $170 or less. The household may claim actual expenses if the total verified expenses are over $170.

If then and the household is eligible for the SME, prorate the SME among all household members, use the eligible household members' portion of the SME in the budget. In TIERS, enter the amount each member actually pays, and TIERS prorates accordingly. the household is eligible for actual medical expenses, prorate the portion paid by the disqualified member among all household members, add the eligible household members' prorated portion to the actual amount of medical expenses any eligible member pays and use this amount in the budget. In TIERS, enter the amount each member actually pays, and TIERS prorates accordingly.

Example 1 (SME): The household consists of three eligible members with total verified monthly medical expenses of $75 and one member who is disqualified due to citizenship. The disqualified person pays for half of the medical expenses, and an eligible person pays for the other half. The household is eligible for the SME because the total verified monthly medical expenses are $75, which is more than $35 but less than $170. The SME is prorated among the eligible members because the disqualified member pays for part of the medical expenses.

$170 / 4 = $42.50 $42.50 x 3 = $127.50

In TIERS, a medical expense of $37.50 ($75 divided by 2) is entered for both the disqualified person and for the eligible member, which is the amount of monthly medical expenses each member actually pays, and TIERS will budget a prorated SME of $127.50.

Example 2 (Actual Medical Expenses): The household situation is the same as Example 1, except that the monthly amount of verified medical expenses is $200. The disqualified member pays $100 of the medical expenses. The household is eligible for the actual amount of medical expenses. The amount the disqualified member pays is prorated and added to the portion paid by the eligible member to determine the total amount of the medical deduction.

$100 / 4 = $25 $25 x 3 = $75 $75 + $100 = $175

The following amounts are entered in TIERS:

$100, for the eligible member; and

$100, for the disqualified member and TIERS will prorate the allowable amount to $75.

Finally, TIERS automatically subtracts $35 from the total deduction to determine the net amount of the medical deduction.

Revision 15-4; Effective October 1, 2015

If the applicant is enrolled in Medicare Drug Plan Part D, the individual's prescription costs are budgeted following normal rules by reasonably anticipating the individual's unreimbursed out-of-pocket expenses.

Note: The household may opt for the SME.

Revision 21-4; Effective October 1, 2021

When averaging the medical expenses, the SME is budgeted for each month of the certification period, as long as the household's allowable averaged monthly medical expense is greater than $35. If the expense recurs monthly or more often, and the medical expense exceeds $35 and is less than or equal to $170 a month, the SME is budgeted for each month of the certification period. When allowable medical expenses for the household exceed the SME, the actual medical expenses are budgeted. The following chart is used to determine when to budget the SME or actual medical expenses.

If the expense ... then budget the ... recurs less often than monthly and the amount averaged for each month is less than or equal to $35, actual amount of verified actual medical expense in the month billed, or use the SME in the month billed if the medical expense is greater than $35 and less than or equal to $170. recurs less often than monthly and the amount averaged for each month is greater than $35 and less than or equal to $170 a month, SME for each month of the certification period. recurs less often than monthly and the amount averaged for each month is greater than $170, averaged amount of actual verified medical expenses for each month. Budget the SME only if the household chooses to use the SME or fails to provide enough verification to qualify for actual medical expenses. occurs one time and the amount averaged over the certification period is less than or equal to $35 a month, actual amount of verified medical expenses in the month billed, or use the SME in the month billed if the medical expense is greater than $35 and is less than or equal to $170. occurs one time and the amount averaged over the certification period is greater than $35 and less than or equal to $170 a month, SME for each month of the certification period. occurs one time and the amount averaged over the certification period is greater than $170 a month, averaged amount of the actual medical expenses for each month. Budget the SME only if the household chooses to use the SME or fails to provide enough verification to qualify for actual medical expenses.

Note: A deduction is allowed for payments made on a monthly payment plan set up before the expense became past due.

Revision 15-4; Effective October 1, 2015

SNAP households are not required to report changes in medical expenses during the certification period.

Households should be advised that a new one-time expense or change in a recurring medical expense that is reported and verified timely may be budgeted in the certification period.

If the household voluntarily reports a change in medical expenses and the change is reported and verified timely, the advisor must consider the newly reported change to determine if the individual should consider switching from the SME to actual expenses.

A medical expense, paid or unpaid, is reported timely if it is reported before it becomes past due to the provider:

anytime during the certification period, or

at the next redetermination.

A one-time medical expense reported and verified too late to budget in the current certification period may be deducted in the first month of the next certification period or averaged over the next certification period.

When the household timely reports and provides timely verification of a paid or unpaid expense (one-time medical expense or recurring) at the redetermination interview:

the expense is deducted in the first month of the new certification period, or

averaged over the new certification period.

When a change in medical expenses is reported during the certification period by a ... then ... household member or the authorized representative, follow the procedures in B-600 , Changes, for both increases and decreases in benefits. source other than a household member or the authorized representative, act on the change if it is considered to be verified at the time of receipt and the change can be made without contacting the household for additional information or verification. Note: If the change would require contact with the household, do not act on the change until the household is recertified.

Revision 15-4; Effective October 1, 2015

Households may switch between actual expenses and the SME at redetermination. Households may also switch at an incomplete review if changes in medical expenses are reported and it is to the household's advantage to switch from the SME to actual medical expenses.