Medical Care Services--Income
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Medical Care Services--Income


Revised April 22, 2013


Medical care services (MCS)--Income - Ownership and Availability


Purpose: This section includes rules, clarifying information and worker responsibilities in determining and maintaining medical care services eligibility.

WAC 182-509-0005MCS income--Ownership and availability.
WAC 182-509-0015MCS income--Excluded income types.
WAC 182-509-0025MCS Income--Unearned income.
WAC 182-509-0030MCS income--Earned income.
WAC 182-509-0035MCS income--Educational benefits.
WAC 182-509-0055MCS income--Needs-based assistance from other agencies or organizations.
WAC 182-509-0065MCS income--Gifts--Cash and noncash.
WAC 182-509-0080MCS income--Self-employment income.
WAC 182-509-0085MCS income--Self-employment income--Calculation of countable income.
WAC 182-509-0095MCS income--Allocating income--General
WAC 182-509-0100MCS income--Allocating income--Definitions.
WAC 182-509-0110MCS income--Allocating income to legal dependents.
WAC 182-509-0135MCS--Allocating income of an ineligible spouse to a medical care services (MCS) client.
WAC 182-509-0155MCS income--Exemption from sponsor deeming for medical care services (MCS).
WAC 182-509-0165MCS income--Income calculation.
WAC 182-509-0175MCS--Earned income work incentive deduction.

WAC 182-509-0005

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WORKER RESPONSIBILITIES

Determine if clients have any potential income available.

1.  Making a source of income available:

a.  If someone meets all other eligibility factors, do not delay eligibility if they try to make a potential source of income available but aren't able to.

b.  If a person can't make a source of income available for reasons beyond their control, consider the income as unavailable to the client.

c.  Clients must give proof of how a source of income can be available and when the income will be available.  Request verification.  Ask for proof that the client has tried to make potential income available.  Examples of proof include:

i.  Financial statements;

ii.  Collateral statements; and

iii.  Letter from the person or company that has control of the income.

See VERIFICATION for information on how to ask for proof from clients.

See WAC 388-406-0030 to decide how much time to allow clients to provide the proof.

d.  Clients must take all needed steps to get any income such as annuities, pensions, and retirement benefits they can receive.

i.  Clients do not have to take steps to get the income if they can show a good reason for not doing so.

ii. Examples of benefits the client must try to make available include:

A.  Veteran's compensation and pensions;

B.  OASDI benefits;

C.  Railroad retirement benefits; and

D.  Unemployment compensation.

e.  Refer clients to the correct agency to apply for potential income and/or help clients get potential income if they ask for assistance.

2.  When the date income is available changes:

a.  Budget the income for the date you expect the client to receive the income.

b.  Set an alert in ACES for the date we expect the client to receive the income to check if the income is available.

3.  Community income:

a.  When a husband and wife live together, count the following as community income:

i.  Income in the name of the husband, wife, or both spouses;

ii.  Income that the husband, wife, or both spouses have access to;

iii. Income the husband, wife, or both spouses received; and

iv.  Earnings of the husband, wife, or both spouses.

b.  Always count community income as available for MCS.  It doesn't matter if one or both spouses are applying for or receiving benefits.

4.  Separate income:

a.  We count income as separate income when the income:

i.  Was received by either spouse before marriage;

ii.  Was received as a result of a gift or inheritance;

iii. Was received from separate property; or

iv.  Are the earnings of the husband, wife, or both spouses when the spouses live separate and apart.

b.  Separate income becomes community income  when someone puts the income in an account with community income.

5.  If a client refuses to make income available:   Deny or terminate assistance.

6.  Jointly owned bank accounts:

a.  When a client has a joint bank account or is holding funds for someone else, determine if the client and the other person have a written or verbal agreement about the amount of the funds available to the client.

b.  If the client and the other person have an agreement, decide if the client uses more than this amount to meet their current needs.  Count the excess as available unearned income and budget it for the assistance unit.

c.  If the client and the other person do not have an agreement, decide if the funds are available to meet the client's needs:

i.   Get a detailed record of the dates and amounts of money deposited into the account or given to the client to hold for the other person.

ii.   Get a detailed record of the types and amounts of payments for the other party.

iii.  Consider any amount over the itemized payments for the other party as income available to the client.  Budget it as unearned income for the assistance unit.

d.  Review the client's circumstances at each eligibility review, reapplication, or when they report a change in the joint bank account or the source of funds.

 

 


WAC 182-509-0015

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WAC 182-509-0025

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WAC 182-509-0030

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CLARIFYING INFORMATION

See the Treatment of Income Chart  for instructions on how to treat specific types of income.

 


WORKER RESPONSIBILITIES

1.  Annuity:  Payments and interest received from an annuity is counted as unearned income.

2.  Bona fide loans:

      Exclude bona fide loans from MCS.  If a loan is not bona fide, count the money someone receives as unearned income for the month they receive it.  Determine if a loan is bona fide by getting proof of the details of the loan.  Examples of proof that a loan is bona fide include:

a.  When the loan is through a bank, credit union, or other institution that loans money as a part of their business:

i.  A copy of the formal loan agreement; or

ii..A written agreement to repay the money within a certain timeframe; and

iii. Proof that the money came from a person or business that loans money.

b.  If the money is from a person or business who does not normally loan money, proof to show:

i.  That the borrower understands they must repay the loan either with or without interest;

ii.  The borrower's intent to repay by promising real property, personal property, or anticipated income; or

iii. A timetable and plan for repayment with details of the plan to repay the loan when the person receives the anticipated income.

c.  If there isn't a formal written loan agreement, accept a written statement from the borrower and the lender about the terms of the loan.  Request additional verification if the proof they give you is questionable.

 


NOTE:

For information on how to request additional proof and how much time someone has to give proof, see VERIFICATION


3.  Court-ordered payments:

Count payments, other than child support, made to someone by order of the court as follows:

a.  If someone receives the money as a one-time payment, count this as a lump-sum payment.

b.  If they will receive more than one payment, count the payments as unearned income.


NOTE:

See LUMP SUM PAYMENTS to decide how a lump sum payment affects someone's benefits.


4.  In-kind income:

When someone works for something of value other than cash, count the value of the item they receive as earned income.  People receive earned income in kind when they work in exchange for things like:

i.   Rent;

ii.  Furniture;

iii. A car; or

iv.  Any other item of value.

v.   If a person does not have full ownership of the item from the work they do in a single month, count the amount they earn toward ownership as income for the month.


EXAMPLE

Charlie works for his cousin Ray in exchange for Ray's used car.  Charlie and Ray agree that the car is worth the Kelly Blue Book stated value of $1000.

Charlie works six hours each week.  Charlie and Ray agree the hours worked amount to $200 toward the car each month.

Count $200 as earned income in kind for each month until Charlie has worked off the debt.  After he has worked off the debt for the car, count the car as a resource.


5.  Joint bank accounts:

a.  When someone has a joint bank account or holds funds for someone else, decide how much of the money belongs to them.  See Worker Responsibilities of MCS INCOME - Ownership and Availability to decide how much of the money belongs to them.

b.  If the person uses more than their share of the money in the account, count the money the person uses above their share as unearned income to the AU.

6.  Military pay:

a.  Count the following allowances as earned income:

i.  Basic allowance for housing (BAH); and

ii.  Basic allowance for subsistence (BAS).

b.  Exclude the following allowances or in-kind benefits:

i.  Clothing maintenance allowance (CMA);

ii.  Basic housing or barracks;

iii.  Meals; and

iv.  Reimbursement or an allowance for transportation or moving costs.

c.  Advance pay:

i.  Count advance pay as earned income for the month someone receives the income, unless they requested for travel.

ii.  If someone has asked for advance pay for travel, exclude the amount that is to reimburse actual travel expenses.  Count any excess as earned income for the month they will receive it.

d.  Count enlistment and re-enlistment bonuses as earned income for the month the person will receive it.

7.  Military Income - Special and incentive pay received while serving in a combat zone:

Military personnel in a combat zone are not members of the assistance unit, but may give income to people in the AU.  If an AU receives income from an armed service member serving in a combat zone, decide how much income to budget as described below:

a.  First, determine the amount of money the service member made available to the AU before being deployed to a designated combat zone;

b.  Second, determine the amount of money the service member now makes available to the AU after being deployed to a designated combat zone; and

c.  Last, determine how much of the service person's military pay we must count as income to the AU:

i.  Before deployment to a combat zone:  If the amount of military pay the service person makes available to the AU after deployment is equal to or less than before they were deployed to a combat zone, count the income currently made available to the AU as income for cash and food benefits.

ii.  After deployment to a combat zone:  If the military pay the service person makes available to their family is greater since being deployed to a combat zone, exclude the additional income.

8.  Money received for an absent or non-household member:

a.  Exclude income the AU receives for the care and maintenance of an absent or non-household member as long as the AU doesn't keep the income.  Examples of income for absent or non-household members include:

i.  Child support for an ineligible child;

ii.  SSI benefits for a couple when one of the spouses is in a nursing home; and

iii.  SSDI paid to a relative as the protective payee.

b.  If the AU keeps a portion of the income, count the portion the AU keeps as unearned income for the month they receive the income and as a resource in the next month.

9.  Money withheld for repayment:

If people have money withheld from their benefits to recover an overpayment from the same income source, exclude the amount withheld from their gross benefit.  Count the net benefit amount as income to the AU.

  • SSA does not determine intent of an overpayment.  Assume that the overpayment of SSI or SSA benefits was unintentional unless there is something to clearly show otherwise.  Therefore, we always exclude these overpayments when they are from the same source.

10.  Real estate / mortgage sales and contracts:

a.  When someone sells real estate that they owe money on under a mortgage or contract, and they carry the contract for the new buyer, count the proceeds from the sale as unearned income for all programs after you subtract any amount paid for:

i.  Insurance;

ii.  Property taxes; and

iii.  Interest on the prior purchase.

b.  Look at the value of the contract to decide if the AU is eligible for benefits:

i.  If the value of the contract puts the AU over resource limit, the AU is ineligible for benefits.

ii.  If the total resources are below the resource limit, the AU is resource eligible for benefits.  Count payments from the contract as unearned income.

11.  Reimbursements for out-of-pocket expenses:

Exclude money to reimburse a person's past or future out-of-pocket expenses.  These payments are not a gain to the household.  Examples of some reimbursements we exclude as income are:

a.  Work or training expenses;

b.  Title XX services (such as CHORE services); and

c.  HUD and FMHA utility allowances. 


NOTE:

For health insurance reimbursements, see THIRD PARTY LIABILITY and LUMP SUM PAYMENTS.


12.  Vendor or third party payments:

a.  We exclude third-party payments as income when a payment is specifically directed to be paid to a third party, does not pass through the assistance unit's control at any point, and is not otherwise payable to them.

We also exclude support payments made directly to a third party for a household expense when:

  • There is no court order for support; such as a separated parent paying the house payment of the parent still in the home when there is no court order; or
  • The payment is more than the court-ordered amount.  For example, an ex-spouse pays $50 over the court-ordered support to the landlord.

EXAMPLE

A court awards someone support payments in the amount of $400 a month and in addition orders the parent to pay $200 directly to a bank to repay a loan.

We count the $400 support payment as income.  We exclude the $200 loan payment as income because it is not otherwise payable to them.


EXAMPLE

A friend or relative uses his or her own money to pay the household's rent directly to the landlord; or someone's employer pays  the household's rent directly to the landlord in addition to their regular wages.


NOTE:

This is not the same as diverted payments from income that is otherwise payable to someone.


b.  We count money that is legally obligated and payable to the household but has been diverted to a third-party as income to the AU.  Count the diverted payment as:

i.  Earned income if the household diverted employment or self-employment income;

ii.  Unearned income if the money was not earned by employment or self-employment.

 

ACES PROCEDURES

See Interview - (EARN) Earned Income Screen 

See Income Eligibility and Budgeting 


WAC 182-509-0035

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CLARIFYING INFORMATION

  1. Title IV education assistance that is excluded regardless of how the money is used or a client's graduate or undergraduate status:
  • College Work-Study (CWS) Program, both federal and state programs
  • Direct Loan Demonstration Program
  • Family Education Loan Program (FELP)
  • HEP/CAMP Programs, special programs for students whose families are engaged in migrant and seasonal farm work
  • National Early Intervention Scholarship and Partnership Program
  • Pell Grant Program
  • Perkins Loan Program
  • Presidential Access Scholarships
  • PLUS Loan Program
  • Robert C. Byrd Honors Scholarship Program
  • Special Child care Services for Disadvantaged College Students
  • Stafford Loan Program
  • State Need Grant (SNG) Program
  • State Student Incentive Grant (SSIG) Program
  • Supplemental Education Opportunity Grant (SEOG) Program
  • Supplemental Loans for Students (SLS) Program
  • TRIO Programs, special programs for students from disadvantaged backgrounds

2.  Educational assistance benefits where we exclude just the funds used for attendance costs:

  • Carl D Perkins vocational and Applied Technology Education Act, P.L. 101-391
  • Bilingual Education - Fellowship Program
  • Christa McAuliffe Fellowship Program
  • Dwight D. Eisenhower Mathematics and Science Education Program
  • Jacob K. Javits Fellowship Program
  • Library Career Training Program
  • National Science Scholars Program
  • Patricia Roberts Harris Fellowship Program
  • Ronald E. McNair Post-Baccalaureate Achievement Program
  • Other educational assistance, not listed above, in the form of grants, work study, scholarships, or fellowships.

3.  Bureau of Indian Affairs (BIA) education assistance benefits that are excluded regardless of use:

  • BIA Higher Education Grants
  • Indian Education - Fellowship for Indian Students

4.  Employment or training funds:

For information on employment or training funds, see WAC 182-509-0045.


WORKER RESPONSIBILITIES

1.  Averaging education assistance over the period of use:

Average educational assistance income meant to cover more than one month over the months the school expects the client to use the money.

2.  Changing from one school term to another:

a.  When one school term ends and a new term begins in the same month, count the first day of the next full month as the start of the term.

b.  Do not use costs from one school term to offset the educational assistance a client earns or gets in another term.

3. Student Loans:

Consider student loans that clients must repay as bona fide loans under WAC 182-509-0015.  Do not count student loans as income regardless of whether the student is part-time, full time, a graduate student, or an undergraduate.

4.  Work study:

Count work-study income that is not specifically excluded in WAC 182-509-0035 as earned income using the following steps:

a.  For MCS assistance:

i.  Exclude the amount earmarked for educational expenses;

ii.  Subtract the AUs eligibility standard from the remaining income of (i) above; and

iii.  Budget the remaining income as earned income to the AU.  Average this income over the period of time the client's award letter states the assistance is for.

b.  Refer to the ACES manual , Income Eligibility and Budgeting - Special Income Situations - Work Study Income

5.  Educational assistance for MCS:

a.  Look at the student's financial aid award letter to identify the amount and type of educational assistance.

b.  Use the Student Grant and Expense Verification, DSHS 14-173, to verify the gross amount of the educational assistance and the student's attendance costs.

c.  Disregard and exclude educational assistance as allowed under WAC 182-509-0035.

d.  Subtract the AU's eligibility standard from the remaining income of (c) above.  See STANDARDS - Medical Care Services to find the eligibility standards for the AU.

e.  Budget the remaining income as unearned income to the AU.  Average this income over the period of time the client's award letter states the assistance is for.

6.  Carl D. Perkins (Perkins Loan Program) educational assistance for MCS:

a.  Decide if the student is a full-time or half-time student.  The school defines a full-time schedule.  A half-time schedule  is at least 1/2 the full-time schedule.

b.  Subtract attendance costs allowed in subsections (2)(a) and (b) of WAC 182-509-0035 from the student's educational expenses based on the student's full - or half-time status.

c.  subtract the AU's eligibility standard from  the remaining income of (b) above.  See STANDARDS - Medical Care Services  to find the eligibility standards for the AU.

d.  Budget the remaining  income as unearned income to the AU.  Average this income over the period of time the client's award letter states the assistance is for.

7.  Veteran's Administration educational assistance for MCS:

a.  Subtract all attendance costs allowed in sub-sections (2)(a) and (b) of WAC 182-509-0035 from the student's educational assistance.  Budget the amount left as unearned income to the AU.  Average this income over the period of time the VA states the assistance is for.

b.  DO NOT deduct the AU's eligibility standard.


EXAMPLE

MCS client began school in September and has attendance costs of $600 for the semester of September through December.  The client gets VA educational assistance of $400 a month.

$1600  VA educational assistance Sept. - Dec. ($400 x 4)

- $600  Attendance costs

$1000  Non-excluded income

$1000 Non-excluded income

÷      4  Months in term

$250  Monthly unearned income


WAC 182-509-0035

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CLARIFYING INFORMATION

1.  Job Training Partnership Act (JPTA)

JTPA ended and was replaced by the Workforce Investment Act (WIA)

2.  Job Corps

Job corps is funded through Title 1-C of WIA and is treated as described in WAC 182-509-0045 (1).

3.  WIA Paid Work Experience

Paid work experience that is funded by Title 1 of WIA is treated as described in WAC 182-509-0045 (1).

4. AmeriCorps Income

The AmeriCorps program is issued under the National and Community Service Trust Act of 1993.  We exclude all payments issued under AmeriCorps.  Although it sounds similar, the AmeriCorps and AmeriCorps VISTA programs are two different programs and how we treat the income varies between the two programs.

5.  VISTA / AmeriCorps VISTA Income

The Volunteers In Service To America (VISTA) program, commonly known as AmeriCorps VISTA, is issued under title II of the Domestic Volunteer Act of 1973.

We exclude VISTA income for MCS.

6.  How to identify AmeriCorps or AmeriCorps VISTA and know which stipends to count as income:

AmeriCorps AmeriCorps VISTA


  • AmeriCorps participants (typically referred to as members) generally begin their term of service in late summer or fall. (August - October), but on occasion may start at other times throughout the year.
  • Full-time AmeriCorps members serve for a period of no less than 9 months and not more than 12 months per term of service.
  • An individual is eligible to serve up to two terms of service in AmeriCorps.
  • Receive funds under the National and Community Services Trust Act of 1993.
  • VISTA participants (typically referred to as volunteers) attend a Pre-Service Orientation (PSO) prior to beginning their term of service. Enrollment windows are established by the Corporation for National Service. Enrollment occurs at various times throughout the year.
  • VISTA volunteers serve for 12 months.
  • An individual is eligible to serve up to three terms of service in VISTA.
  • Receive funds under Title I of the Domestic Volunteer Act of 1973.
How to treat AmeriCorps income:

Exclude AmeriCorps income for MCS.
How to treat AmeriCorps VISTA income:

Exclude VISTA income for MCS.
If someone is not sure whether they are volunteering in a program under AmeriCorps or AmeriCorps VISTA, ask the person for a copy of their letter of introduction.  The letter will identify the program and should include one of the logos shown in the above table.

WAC 182-509-0055

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CLARIFYING INFORMATION

1.  Assistance from other agencies and organizations:

a.  Includes cash and in-kind income; and

b.  Can come from public or private agencies or organizations.

2.  For MCS, we can exclude money given by public or for-profit companies as long as the money  is not intended for ongoing living expenses.


WORKER RESPONSIBILITIES

1.  Verify the following information:

a.  How much assistance the client receives;

b.  How often the client receives the assistance;

c.  Why the client receives the assistance;

d.  What conditions the client had to meet to receive the assistance;and

e.  What the client must do to continue to receive the assistance.

2.  Subtract the following from the gross assistance:

a.  Any amount that is not intended to cover ongoing living expenses; and

b.  Any amount provided under conditions which prevent it from being used for the client's current living expenses (e.g., a damage deposit provided by the Salvation Army for the AU to relocate after a fire); and

c.  The eligibility standard for the AU.

3.  Budget any remaining assistance as unearned income for the month.


EXAMPLE

In the month of application, a MCS applicant received $1,000 in assistance from a local community agency after their apartment complex was condemned.  Of the $1,000, $600 is intended for a damage deposit at the new apartment the agency found for the AU.  The other funds are for household items.

Total Assistance                      $1,000                                      Eligibility Standard                $339

Less Damage Deposit                 -600

Amount Duplicating Need           $400

Eligibility Standard                       -339

Available Income                          $61

 

Budget $61.00 as unearned income in the initial month of application.


WAC 182-509-0065

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CLARIFYING INFORMATION

A gift is an item voluntarily given to someone without expecting something in return.  Some common examples when someone may receive a gift include birthdays, Christmas, wedding and graduations.

a. A cash gift is a gift that is in the form of cash, checks or a sellable security such as stocks or bonds.

b.  A non-cash gift is any gift that is not considered a cash gift.  Examples of non-cash gifts include:

i.  Real or personal property (e.g., a home, television, furniture, jewelry or new furnace); and

ii.  Goods or services provided at no charge to the client (e.g., free phone service provided by the telephone company).


WORKER RESPONSIBILITIES

1.  Cash gifts for MCS:

a.  If more than one person share a cash gift, find out the client's  share in the gift by dividing the value of the gift by the number of persons receiving it.  If the person giving the gift states that the gift must be divided a specific way, use the method stated by the gift giver.

b.  Disregard the first $30 each person gets in cash gifts for each calendar quarter.

c.  Budget any amount above the $30 disregard as unearned income to the AU.

2.  Non-cash gifts for MCS:

a.  Disregard non-cash gifts when:

i.  The gift is a voucher or vendor payment (a payment made for a client by another person to a vendor of goods and services);

ii.  The donor states in writing that the gift must be used for a specific purpose;

iii.  The gift is within the resource limits for the program the client receives; or

iv.  The gift is excluded.

b.  For information on non-cash gifts as resources, see the specific resource type in MCS RESOURCES.

 


WAC 182-509-0080

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CLARIFYING INFORMATION

1.  Self-Employment Status

To determine whether a job is self-employment, we:

a.  Accept the customer's statement that their work is self-employment unless it is questionable.

b.  Accept the company's statement that the customer is self-employed unless there is evidence to the contrary.

c.  Review the specific circumstances of the work only when the customer statement is questionable and there is no company to verify the business relationship.


NOTE:

Document whether the job is self-employment once this has been determined.


EXAMPLE

Jorge is a newspaper carrier.  He is not certain if he is an employee or an independent contractor (self-employed).  We contact the people at the newspaper, and they state that Jorge is an independent contractor.  We treat Jorge's newspaper income as self-employment earnings.


EXAMPLE

Lydia works constructing patios for people.  She declares that she is an independent contractor (self-employed).  There is no reason to question her statement, and we treat her earnings as self-employment.


2.  Self-Employed versus Employee:

a.  When we do have to review the specific circumstances of a case to determine whether someone is self-employed/independent contractor or an employee, we consider the relationship of  the worker to the person or business, and whether or not this forms an employer/employee relationship.

b.  Often tax documents will sufficiently address the relationship of a person to either their employer or business.

c.  When tax information is unavailable or unclear, we must review the specific circumstances to decide if  a person's work is self-employment.  In general:

i.  Self-employed persons will have ultimate control of the way the work is done - when, where and how.  Self-employed persons will generally use their own tools and offer their services to the public to seek business.

ii.  Employees will be under more direct control as to how their work is done and will usually have set hours and wages by the employer.

Click Here for a chart that gives more guidance on determining self-employment status.


EXAMPLE

The Aging and Disability Services Administration (ADSA) individual providers work at the direction and control of the person to whom they provide care as well as the state.  Their hours and wages are set by the customer and the state.  Also, they receive benefits and have representation.  WAC 388-71-0505 requires COPES customers to establish an employer-employee relationship.  COPES and other ADSA individual providers are employees.


EXAMPLE

Yvonne cleans houses for several people.  She uses some of her own tools, but mostly the cleaning products of the homeowners.  She bases when she does the work upon the schedules of the different homeowners, but has ultimate control of when she schedules her different jobs or whether she accepts more houses to clean. Yvonne calls her service "Yvonne's Housecleaning" and posts fliers at local businesses to attract more customers.  Yvonne is self-employed.


3.  Child Care:

a. People who are child care providers that are subject to the licensing requirements under chapter 74.15 RCW are considered self-employed, even if they do not have a current license.  Child day-care center operators and family home day-care providers are self-employed.

b.  People who are not required to be licensed under state law to provide care are considered to have an employer/employee relationship with the parent of the child for whom they provide care.  These unlicensed individual providers are considered employees.


EXAMPLE

Beth is an individual provider paid by Ms. Lee to provide care in the child's home.  Beth is Ms. Lee's employee.


EXAMPLE

Lance cares for ten neighborhood children in his home while their parents are at work on a regularly scheduled basis.  He has not yet applied for a license to operate this family home, as is required by state law for people regularly caring for children outside of their own homes.  Lance is self-employed.


4.  Independent contractors:

Independent contractors are self-employed.  The guidelines above apply to determining a self-employed contractor from an employee.  Subcontractors are independent contractors who contract with another firm versus directly with the customer, and are also self-employed.


EXAMPLE

Robert works as a freelance gardener for several private households.  He also subcontracts his services with a local landscaping firm for additional business.  Robert is self-employed.


5.  Corporations:

People who run their business out of a corporation are not considered self-employed.  This is true even if the person is the sole investor in the business.  Corporations are separate entities from their investors and employees.  The person is considered an employee of a corporation, and may also have income from dividends related to any investment in the corporation.  See Treatment of Income for information on budgeting income from dividends and regular earnings.

Corporations include S Corporations and can include Limited Liability Companies (LLC) if they are set up as corporate structures.  Partnerships are not incorporated, and are considered self-employment enterprises.  For more information on various business structures, visit the IRS website.

6.  Selling self-produced items:

Examples of selling self-produced items include someone running a lemonade stand or selling vegetables from their garden at the local farmer's market.

7.  Re-sale income:

Examples of re-sale income include selling items for profit at garage sales, or on an online auction site such as e-bay.


NOTE:

This does not include when someone sells their personal belongings at a garage sale or even on an auction site for at or under the amount they originally paid.  A person selling their belongings who does not make a profit is selling a resource and is not self-employed.


WAC 182-509-0085

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CLARIFYING INFORMATION

1.  We always allow the $100 standard deduction if the client doesn't choose to claim actual costs for non-boarder self-employment income.

This includes when the client:

     a.  Claims no self-employment expenses;

     b.  Has self-employment expenses under $100.00;

     c.  Has gross self-employment income under $100.00.

2.  Some examples of allowable expenses are:

     a.  Rent or lease of business equipment or property;

     b.  Utilities;

     c.  Postage;

     d.  Telephone;

     e.  Office supplies;

     f.  Advertising;

     g.  Business related insurance, taxes, licenses, and permits;

     h.  Insurance premiums for a medical plan established under the business;

     i.  Legal, accounting, and other professional fees;

     j.  Repairs to business equipment and property;

     k.  Gross wages and salaries paid to employees;

     l.  Business loans (interest and principle) used to buy income-producing property or equipment;  

          and

     m.  The cost of a home office or place of business in the home if the area is used exclusively and regularly for business purposes.  We cannot allow the cost for any area used for both personal and business use.

     n.  Transportation costs such as gas, oil, replacing worn items, registration and licensing fees, and auto loans.  The client may claim the actual transportation costs or use the State standard cost-per-mile.  The Office of Financial Management publishes the standard cost for a privately owned vehicle in section 10.90.20 of the State Administrative and Accounting Manual:  http://www.ofm.wa.gov/policy/10.90a.pdf.

 


NOTE:

The rate as of October 1, 2011 was $.51 / mile.

 


3.  If someone chooses to use their actual expenses instead of the standard deduction, they must list out and give us proof of the expenses before we can use them.


WORKER RESPONSIBILITIES

1.  Determine gross self-employment income:

To determine gross self-employment income, count:

  • The sales from items the business sold;
  • Gross income from providing services;
  • Profit from selling business property or equipment.

2.  Net self-employment income:

A person's net self-employment income is Gross self-employment income minus:

  • Their allowable self-employment expenses; or
  • The $100 self-employment expenses deduction.

3.  Budget self-employment income:

When someone earns self-employment income, average the income over the period the income covers.  If they choose to claim actual self-employment expenses, average their allowable expenses over the same period.

a.  If the person gets their annual income as self-employment income, and they get this income over a period of less than a year, average the self-employment over the year.

b.  If a person's income is from self-employment for only part of the year, average the income over the period of time the income covers.

c.  If the averaged income doesn't reflect what the person will get because of a significant increase or decrease in business:

i.  Anticipate the person's self-employment income for each month; and

ii.  Average any capital gains they will get over the year.

d.  If someone chooses to use their actual expenses instead of the standard deduction, average or anticipate the expenses for the same period of time you use for the income.

4.  Calculate each self-employment business separately:

Each self-employment business is separate.  Calculate the net self-employment income for each self-employment enterprise separately.  Do not use the losses on one business to offset the profit of another business.

5.  Roomer income:

Use the steps described below to determine what deductions to allow when someone has roomer income.

a.  Use either the standard self-employment deduction as a self-employment expense or:

i.  Verified non-board costs, such as laundry expenses; and

ii.  For people buying their home, a prorated share of the mortgage, taxes, and insurance if they don't use the entire shelter costs toward the shelter deduction.  Base the pro-ration on the number of total bedrooms in the house.

b.  Give the person the choice of using the entire shelter cost toward their shelter deduction or using a portion of it as a business expense.

c.  Households that rent and have a roomer cannot use their rent as a business expense.  Count the amount of rent from the roomer that is more than their rent obligation as income to the household.

 


NOTE:

People in the same Assistance Unit who share household costs are not roomers.  We do not count these shared household costs as roomer income.


EXAMPLE

Stan is buying his 3 bedroom home and rents out a room for $400.  His mortgage payment of $750 includes taxes and insurance.  Stan chooses to use actual expenses, rather than the standard $100 self-employment deduction.  The pro-rated portion of his mortgage, taxes, and insurance is $250 ($750/ 3 bedrooms).  We allow the pro-rated portion of his mortgage, taxes and insurance, as an allowable business expense.

Stan has $150 in net self-employment income.  His shelter deduction would be the $500 mortgage (the portion of his housing costs that wasn't taken as a business expense) and the utility allowance he is eligible for under WAC 388-450-0195.

Enter $400 as roomer income and enter the mortgage payment and number of bedrooms in Stan's home for ACES to calculate his expenses correctly.


6.  Rental Property:

a.  Rental property that is subject to the criteria in WAC 182-509-0080 (7) is property that someone owns, but is not their residence.

b.  We count any managerial duties toward the 20-hour weekly requirement for us to count rental property as self-employment  earned income under WAC 182-509-0080.  Count time people spend bookkeeping, showing the property to possible tenants, doing yard work, repairs, etc. as time spent managing the property.

c.  Budget the gross earned or unearned income from renting the property after subtracting the standard self-employment deduction or the following verified expenses:

i.  Property tax or a prorated share of the tax if their home and rental property are taxed as a single unit;

ii.  Maintenance costs for the property;

iii. The mortgage or sales contract payment for the rental property or a prorated share if their property and the rental property are in the same loan or contract; and

iv.  The insurance premium or a prorated share if they insure their home and rental property as a unit.

 

ACES PROCEDURES

For Work Study income, see Income Eligibility and Budgeting - Special Income Situations - Work Study Income

See Interview - EARN screen

See Income Eligibility and Budgeting - Special Income Situations - Cash Gifts


WAC 182-509-0095

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CLARIFYING INFORMATiON

  1. Unmarried persons are not legally or financially responsible for each other. 
  2.  A parent’s income is not allocated to children living in the home.

WORKER RESPONSIBILITIES

  1. Determine if there is income possessed by someone outside the assistance unit that must be allocated to meet the needs of the assistance unit.
  2. Determine if there is income possessed by someone included in the assistance unit that must be allocated to meet the needs of someone outside the assistance unit.
  3. Refer to the appropriate sections under Income – Allocation and Deeming for specific allocation rules and worker responsibilities.

WAC 182-509-0100

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CLARIFYING INFORMATION

  1. Do not allocate income of an AU member to legal dependents living in the home unless it’s to the non-applying spouse.
  2. Allocate the one-person eligibility standard as specified under WAC 182-508-0230 to the non-applying spouse living in the home.
  3. Children cannot be included in the AU.
  4. A financially responsible person can only have income allocated to the following individuals:

a.  A spouse living in the home; and

b.  Legal dependents living outside the home when there is an ordered amount for court or administratively ordered current or back support. 

 


WAC 182-509-0110

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CLARIFYING INFORMATION

For treatment of income of a non-applying spouse, see WAC 182-509-0135.

 


WORKER RESPONSIBILITIES

MCS client living at home

  1. To determine a MCS client's net countable earned income, apply rules in WAC 182-509-0175.
  2. Combine the countable earned income with the countable unearned income.
  3. Income is allocated to the following individuals:

a.  A spouse living in the home in an amount not to exceed the one-person MCS eligibility standard under WAC 182-508-0230; and

b.  Legal dependents living outside the home when there is an ordered amount paid for court or administratively ordered current or back support.

MCS client living in a nursing home, alternate living facility, or adult family home

When a MCS client does not live in the home with their spouse (and/or dependents), the client is allowed a deduction for the support of their spouse living in the home and for legal dependents living outside the home for whom they pay court ordered child support.

  1. Determine a MCS client's net countable earned income under WAC 182-509-0175.  Combine the countable earned income with any countable unearned income.
  2. Deduct an amount up to the one person MCS eligibility standard (minus the spouse's income) for the support of the spouse from the income of the MCS applicant.
  3. Deduct court ordered child support payments for a child living outside the home if paid by the MCS client or their spouse.
  4. Compare the remainder to the following standards:

a.  For a client living in a nursing home, compare the remainder to the Personal Needs Allowance (PNA) described in WAC 388-478-0040 (currently $41.62).  If the client's countable income exceeds the PNA, the client is not eligible for MCS medical.

b.  For a client living in an alternate living facility, compare the remainder to the Personal Needs Allowance (PNA) described in WAC 388-478-0045 (currently $38.84).  If the client's net countable income exceeds the PNA, the client is not eligible for MCS medical.

c.  For a client living in an adult family home, compare the remainder to the one-person MCS eligibility standard described in WAC 182-508-0230.  If net income is below this standard, the client keeps a Personal Needs Allowance of $38.84 and pays the remainder of their income to the adult family home for room and board.


WAC 182-509-0135

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CLARIFYING INFORMATION

A non-applying spouse doesn't receive the earned income incentive deduction. 


WAC 182-509-0155

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CLARIFYING INFORMATION

  1. SSA qualifying work quarters:  SSA decides how much income someone must earn in order to earn a qualifying quarter of work.  See WAC 388-424-0008  for information on how to decide if someone has 40 qualifying quarters of work.

 

          If an immigrant has 40 qualifying quarters of work using the spouse's work quarters, the immigrant keeps the exemption even if the immigrant divorces the spouse at a later date.

  1. Deeming is time-limited for state-funded benefits:  For state funded benefits, including MCS, we only deem a sponsor's income to the immigrant for five years from the date the sponsor signed the affidavit of support. 
  2. Using in-kind income:  We do not deem in-kind income to the client.  We add the sponsored immigrant's in-kind and other income outside of ACES and compare against 130% of the FPL to decide if the client is exempt from the deeming process.  The United Stated Department of Health and Human Services (HHS) publishes the federal poverty level on the Internet at:  http://www.poverty.us/Poverty-Guidelines.html
  3. Value of in-kind income:   We use the amount someone would normally pay for items or services (the market rate) as the value of free rent, commodities, goods, or services when we look at a client's in-kind income to decide if they are exempt from the deeming process.
  4. Alien Emergency Medical:  If a non-citizen isn't eligible for other medical benefits, that person may be eligible for AEM.  We don't deem a sponsor's income or resources for AEM.  See WAC 182-507-0110.
  5. Special Immigrants Immigrants from Iraq or Afghanistan who were granted Special Immigrant status under section 101 (a)(27) of the INA are not required to have a sponsor, and therefore, are not subject to deeming rules.
  6. Renewing Indigence Exemptions: While indigence exemptions expire at the end of 12 months, they may be renewed for additional 12-month periods if the eligibility criteria are met.
  7. Reporting Indigence Exemptions: The requirement to report indigence exemptions to the U.S. Attorney General described in WAC 388-450-0156 (7) applies only to recipients of federal benefits and is only done after giving them the opportunity to opt out and decline the exemption. Sponsored immigrants must be told the consequences of opting out of the deeming exemption to avoid indigence reporting.  Although recipients of state benefits are also eligible for the exemption, they will not be reported. See Worker Responsibilities #5 for instructions.

WORKER RESPONSIBILITIES

  1. When a sponsor abandons an immigrant:
    1. If the sponsor abandoned the client, look to see if the client meets the exemption for having income at or below 130% of the FPL and explain to the client about the requirement to notify the U.S. Attorney General if they decide to use the indigence exemption.
    2. If the client meets this exemption, the department must notify the U.S. Attorney General only after giving the client the opportunity to opt out and decline the exemption.  See Notifying U.S. Attorney General.
  2. Deciding if a sponsor is permanently incapacitated:

Unless it is questionable, accept the client's statement that the sponsor is permanently incapacitated.  If you think the sponsor may not be incapacitated, request a note from the sponsor's doctor.

  1. When a sponsored immigrant gets long-term care services:  See WAC 388-513-1325WAC 388-513-1340, and WAC 388-513-1350  for information on how to treat income and resources for a client who gets long-term care services.
  2. Deciding if the AU has more than 130% of FPL:
    1. Start with the AU's earned and unearned income;
    2. Add any cash or in-kind benefits the client receives from any source.
    3. The result is the client's total cash and in-kind income.
    4. Multiply the current FPL based on the client's AU size by 1.3.
    5. Compare the total cash and in-kind income to 130% of FPL.
    6. If the client's total income is at or below 130% of FPL, exempt the client from deeming for 12 months. 

EXAMPLE

A sponsored immigrant applies for benefits.  He gets $250 a month from their sponsor and he stays in an apartment furnished by the sponsor's church.  The apartment has been rented for $600 a month. 

250

Monthly income from sponsor

+600

In-kind income (free-rent) from church

$850

Total cash and in-kind income

 

 

1128

2010 Monthly FPL for one person

X  1.3

130%

$1466

130% of FPL to decide on exemption

In this example, the client's cash and in-kind income of $850 is less than $1466.  The client is exempt from the deeming process for twelve months.  This exemption can be renewed if the client's income remains at or under 130% of the monthly FPL.


EXAMPLE

A sponsored-immigrant married couple applies for benefits.  The sponsor does not give them money, but they give the clients $2000 worth of food and household items each month.  The couple has no other income. 

2000

In-kind income from sponsor

$ 2000

Total cash and in-kind income

 

 

$1428

2010 Monthly FPL for two people

x  1.3

130%

$1856

130% of FPL to decide on exemption

In this example, the client's in-kind income of $2000 is more than $1856.  The client is not exempt from the deeming process.  Calculate how much of the sponsor's income to deem under WAC 388-450-0160.


NOTE:

A client is not automatically eligible for benefits by being exempt from deeming.


NOTE:

Don't refer a client if they are exempt for any reason other than having income under 130% of FPL (e.g., the client was sponsored by an organization.) Don't refer a client who is receiving only state benefits.


WAC 182-509-0165

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WORKER RESPONSIBILITIES

ACES is programmed to determine eligibility for AUs appropriately based on the circumstances of the household including citizenship and alien status. 

 

For households with non-citizens members, ensure that you code the (ALAS) screen in ACES correctly and update an immigrant’s information at recertification.

 


WAC 182-509-0175

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CLARIFYING INFORMATION

Self-employed persons:

Someone who is self-employed as described under WAC 182-509-0080 gets either the $100 standard self-employment expense deduction or verified actual costs of self-employment as described under WAC 182-509-0085.

  • We apply the earned income incentive deduction to the remaining income from self-employment after applying the $100 standard deduction or verified actual expenses in excess of $100.
Modification Date: April 22, 2013