1211 Lump Sums
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| A. Determine if a lump sum payment is expected or has been received and apply the following procedure as appropriate. | ||||||||||
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B. Consider nonexempt earned or unearned income of an applicant or recipient to be a lump sum payment if: 1. It is a one time only payment; or 2. The payment is for retroactive monthly benefits; or 3. It is a windfall (i.e. inheritances or lottery winnings); or 4. It is a personal injury or worker compensation award; or 5. It is an insurance settlement for damaged property and all or part of it was not used for replacement or repair within the 90-day exemption period for Child Care and POWER (see Insurance settlement in Section 808); or 6. It is a resource replacement for damaged property and all or part of it was not used for replacement or repair within the 9-month exemption period for medical (see Resource replacement in Section 808).
C. Consider a non-recurring lump sum payment to be a payment from sources such as, but not limited to, the following: 1. Proceeds from the sale of land; 2. Income tax refunds and tax rebate or credits; 3. Insurance settlements;
4.
Refunds
of security deposits on rental property or utilities;
5.
Retroactive
lump-sum Social Security, SSI, POWER, railroad retirement, VA, and
VA disability pension payment annual adjustment, etc.; 6. Leased vehicle end of contract gain or benefit; 7. Earned income bonuses paid after the employment terminates and not a part of final wages; 8. HUD escrow accounts paid when the family achieves economic independence; 9 Federal Emergency Management Agency (FEMA) payments; 10.
Arrearage/delinquent child support payment when not being received
on a regular/on-going basis.
D. Consider lump sum payments as income in the month of receipt for POWER and the month following the month of receipt for Child Care. 1. Use the total amount less legal fees required to make the money available and less any amount designated by the payor source for medical expenses. 2. Use the lump sum prospectively when it can be reasonably expected to be received in the benefit month. 3. Do not count a lump sum received before the month of application. 4. Use the lump sum greater than the maximum benefit level received in the month of application. a. Deny the application; and b. Determine the period of ineligibility beginning with the month of application. 5. Do not count a lump sum received after the month of closure nor use it to extend the period of ineligibility. 6. Consider a lump sum received by a parent(s) of a minor parent as income in the month received and do not apply the lump sum policy for POWER purposes only. | |||||||||
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E. Consider a lump sum as income in the month of receipt for all medical groups and any amount remaining as a resource the first of the following month for Medicaid only. 1. DO NOT terminate the assistance unit when a 10-day notice cannot be provided; 2. Use the DFS 411 to adjust the patient contribution due to receipt of a lump sum as appropriate; 3. DO NOT apply the lump sum period of ineligibility for medical groups.
F. Recover the overpayment(s) when a lump sum is discovered too late to be used prospectively or not reported timely or issue an underpayment when the lump sum is anticipated for the benefit month but not received. G. Acknowledge the period of ineligibility begins with the month in which the lump sum is received for POWER and the month following the month of receipt for Child Care.
H. Treat the lump sum payments listed in C. above as follows: 1. Exempt unearned income in the month received; and 2 Consider the gross payment as a nonexempt resource in the month received; and 3. Apply the 4. Consider the balance as a resource in the following months(s). I. Consider lump sum payments which are educational, self-employment or contract income to be earned income and averaged over the period of intended use.
J. Proceed as follows when the lump sum is over the income limit for Child Care: 1. Redetermine the monthly income by dividing the lump sum amount by the maximum benefit level for the assistance unit size plus $1.00. (See Table I) 2. Use the result to determine the number of months the assistance unit will be ineligible for Child Care benefits after rounding any fractions up.
K. Proceed as follows when the lump sum is over the income limit for POWER: 1. Use the following procedure for computing the period of ineligibility when the actual combined income of the assistance unit, after applying the applicable disregard, exceeds the applicable income limit. a. Find the case ineligible for the number of full months resulting from dividing the actual total gross income, including any child support retained by the client, by the maximum benefit level applicable to the POWER assistance unit size (see Table IV). b. Add any remaining amount from the lump sum calculation to the anticipated income to be received in the first month following the period of ineligibility if the assistance unit reapplies in that month and meets the Pay-After-Performance requirements. c. Allow the earned income disregard when the lump sum was earned income. d. Realize the lump sum procedure is calculated on the AFEA screen in EPICS for POWER. 2. Realize the lump sum procedure applies to income received by a disqualified individual. a. Do not take her/his needs into account in determining the period of ineligibility until the disqualification ends; and b. Recalculate the period of ineligibility taking into account her/his needs when the disqualification ends. L. Proceed as follows when the lump sum is under the income limit for POWER: 1. Use the lump sum to compute the POWER performance payment when the anticipated or actual gross income is within the maximum benefit level; 2. Allow the $200 or $400 earned income disregard, as appropriate, when the lump sum is earned income.
M. Allow the period of ineligibility to be shortened under the following circumstances: 1. For Child Care and POWER, the assistance unit incurs and pays medical expenses NOT covered by health insurance, Medicaid or a third party; 2. The lump sum payment was received as reimbursement for the actual cost of replacement incurred by the assistance unit, not to include payment for “pain and suffering”; 3. The lump sum payment was issued in error and written verification from the pay or is received indicating the client is required to return the lump sum money; 4. The lump sum becomes unavailable to the assistance unit due to a disaster, which was beyond the family's control: a. The reasons considered beyond the family's control are the occurrence of an earthquake, fire, flood, tornado, robbery, or furnace breakdown and/or broken water pipes in the home when owned by a person in the assistance unit; and b. Require, second, all of these conditions be met: (1) The lump sum was spent for food, clothing and/or shelter until the situation occurred; and (2) The lump sum has been or is legally obligated to be spent for expenses related to the situation; and (2) The assistance unit has no other income or resources to meet the expenses of the situation.
5. The POWER maximum benefit level increases due to: a. A change from shelter supplied to shelter included for the assistance unit; or b. Legislative action; or c. A child is born to the assistance unit and is eligible to be added to the POWER performance payment; or d. A child moves into the home and is eligible to be added to the POWER performance payment.
N. Recalculate the shortened period of ineligibility when: 1. The Child Care or POWER assistance unit incurs medical expenses or the money remaining becomes unavailable due to a disaster: a. Multiply the maximum benefit level by the number of months the assistance unit has already been ineligible; and b. Add the amount paid for medical expenses or any remaining amount that became unavailable due to a disaster; and c. Subtract the amount resulting from item b. from the original total gross income to arrive at the amount of lump sum left over; and d. Find the case eligible no sooner than the month following the period of ineligibility and count the remaining income in the month following the period of ineligibility when the family reapplies and receives a payment in that month. e. Require the Pay-After-Performance requirements to be met for the corresponding performance period prior to allowing a POWER payment.
2. The POWER maximum benefit level increases because of items a., b., c. or d. under H.5. above: a. Determine the remaining amount of the lump sum: (1) Multiply the old POWER maximum benefit level by the number of months the case has already been ineligible based on the assistance unit size in effect; and (2) Subtract that amount from the original actual total gross income to arrive at the amount of lump sum available to the new assistance unit size; and b. Divide the remaining lump sum by the new POWER maximum benefit level to arrive at the remaining number of months of ineligibility and the remaining amount to be used as income in the month following the period of ineligibility.
3. Realize ineligibility does not follow the individual who was added to the assistance unit and who subsequently leaves the unit, nor is the period of ineligibility recalculated for remaining members of the assistance unit. 4. Include all family members in one assistance unit beginning the month following the last month of ineligibility even if there is an amount remaining from the lump sum to be used as income. O. Acknowledge the period of ineligibility resulting from a lump sum while on assistance in another state has no bearing on eligibility in **************************************************************************** NOTES: |
