Revision 16-4; Effective December 1, 2016

 

Information in this section concerns common periodic payments that are unearned income; however, the information is not inclusive.

 

E-4100 Social Security Benefits

 

Revision 14-1; Effective March 1, 2014

 

Social Security benefits (RSDI) are paid by the Social Security Administration (SSA) under provisions of the Social Security Act. Also included are special payments at age 72 (Prouty benefits) and Black Lung benefits under the Coal Mine Health and Safety Act of 1969.

A person who receives Social Security benefits may be enrolled in Medicare Part B, in which case the Medicare (SMIB) premiums are taken out of the Social Security checks before the checks are received. Determine whether the person is enrolled. If so, add the SMIB premium (see Appendix XXXI, Budget Reference Chart) to the benefit received to determine the total Social Security benefit.

Note: An SMIB premium may be different if a beneficiary enrolled late in Medicare or is eligible for a variable SMIB premium. The person may also have Medicare Part D taken out of the Social Security check.

See Appendix XVI, Documentation and Verification Guide.

For applications, verify gross benefits.

For reviews, if the recipient’s statement agrees with the conversion amount and there is no indication that the RSDI benefit has changed, the amount does not have to be reverified.

Verify the amount of Social Security benefit by one or more of the following methods:

  • Obtain an SOLQ/WTPY.
  • View or obtain a copy of the person’s award notice (letter) from the SSA.
  • Obtain information from the SDX computer tape if the recipient has SSI and RSDI and is now in an institutional setting.
  • Contact a representative of the SSA using telephone contact documentation.
  • View or obtain a copy of the person’s most recent benefit check or direct deposit slip. This method is least desirable because it may not show the gross amount.
  • At review, use the conversion amount in the system of record if there is no indication that the RSDI is different from the converted amount.

Note: The Social Security Administration refigures SSA benefits if the individual has earnings from the previous year and other changes. This refiguring usually occurs during October, but may occur at other times. Staff may need to obtain an SOLQ/WTPY at redeterminations to ensure they have current/updated amounts. See Section F-2150, SSI and RSDI Retroactive Lump Sum Payments; Section F-2151, Examples of SSI and RSDI Retroactive Lump Sum Payments; and Section E-1610, SSA Overpayments.

 

E-4200 Railroad Retirement Benefits

 

Revision 09-4; Effective December 1, 2009

 

Railroad retirement benefits may be paid to a person or to the person's dependents or survivors. Some examples of railroad retirement benefits are sick pay, annuities, pensions and unemployment insurance benefits.

If a person is enrolled in Medicare Part B under his/her railroad retirement annuity number, determine the total railroad retirement benefit by adding the current SMIB premium amount to the benefit received.

See Appendix XVI, Documentation and Verification Guide.

 

E-4300 VA Benefits

 

Revision 12-1; Effective March 1, 2012

 

The U.S. Department of Veterans Affairs (VA) has numerous programs that make payments. Treatment of VA payments depends on the nature of the payment. The most common types of VA payments are:

  • pension;
  • compensation;
  • dependency and indemnity compensation;
  • educational assistance;
  • aid and attendance allowance;
  • housebound allowance;
  • payment adjustment for unusual medical expenses;
  • clothing allowance;
  • payments to Vietnam veterans' children with spina bifida.

Note: VA aid and attendance allowance, housebound allowances and payment adjustment for unusual medical expenses are exempt from both eligibility and co-payment. However, if these payments are deposited into a qualifying income trust (QIT) account, they are countable for co-payment.

 

E-4310 Augmented and Apportioned VA

 

Revision 09-4; Effective December 1, 2009

 

The VA determines the designated beneficiary of a check based on the laws and regulations for payment of each benefit.

Augmented VA payment. A VA pension payment that has been increased for dependents is an augmented VA payment. For Medicaid purposes, the augmented benefit includes a designated beneficiary's portion and one or more dependents' portions. An augmented VA benefit usually is issued as a single payment to the veteran or the veteran's surviving spouse. When veteran’s benefits are augmented for a dependent, the dependent's portion is not countable income to the applicant/recipient (the veteran or veteran's surviving spouse) of the check. If the applicant/recipient is the dependent, the applicant/recipient’s portion is countable income to the applicant/recipient.

Apportioned VA payment. A VA compensation payment made directly to the dependent of a living veteran is an apportioned payment. Apportionment is direct payment of the dependent's portion of VA benefits to a dependent spouse or child. The VA decides whether and how much to pay by apportionment on a case-by-case basis. Apportionment reduces the amount of the augmented benefit payable to the veteran or veteran's surviving spouse.

A portion of a VA benefit paid by apportionment to a dependent spouse or child is VA income to the dependent spouse or child. It is not a support payment from the designated beneficiary.

See Section D-6350, Veterans Benefits, for requirements to apply for benefits.

 

E-4311 VA Pensions

 

Revision 10-1; Effective March 1, 2010

 

Pension payments are based on a combination of service and a nonservice-connected disability or death.

Needs-Based Pensions and the $20 General Exclusion

Most VA pension payments are based on need. As such, these payments are unearned income to which the $20 general income exclusion does not apply.

Pension payments are usually paid monthly; however, when the monthly payment due is less than $19, VA will pay quarterly, biannually or annually. VA may also make an extra payment if an underpayment is due.

Pensions are paid to:

  • a wartime veteran determined permanently and totally disabled for nonservice-related reasons;
  • the surviving spouse; or
  • the child of a veteran because of the nonservice-related death of the veteran.

There are several periodic payments from VA benefits:

  • VA compensation
  • VA pension
  • VA Dependency and Indemnity Compensation (DIC) payments

Because VA pensions and parents' DIC payments are generally based on need, the $20 general income exclusion in the eligibility determination is not applied.

Exceptions:

The following pensions are not based on need:

  • Pensions based on a special act of Congress.
  • Pensions based on the award of the Medal of Honor.
  • Pensions based on service in the:
    • Spanish American War (April 21, 1898, through July 4, 1902);
    • Indian Wars (January 1, 1817, through Dec. 31, 1898); or
    • Civil War (1861-1865).

These pensions are unearned income and the $20 general exclusion does apply to these exceptions. Assume that a VA pension is needs-based unless there is evidence to the contrary. See Section G-4110, Twenty-Dollar General Exclusion.

 

E-4311.1 1979 VA Pension Plan

 

Revision 10-1; Effective March 1, 2010

 

The Jan. 1, 1979, increase in VA pension benefits caused many SSI recipients to become ineligible. Public Law 96-272 gave protection to a person drawing VA pension benefits "grandfathered" from Dec. 31, 1978. A person who has been eligible for a VA pension since before 1979 is not required to apply for an increase in VA payment for medical expenses known as aid and attendance or housebound benefits. These additional payments are for unusual medical expenses and are considered exempt income that does not affect eligibility or co-payment.

Refer persons who have changed to the 1979 pension plan or who initially obtain entitlement to a VA pension after Jan. 1, 1979, to apply for aid and attendance or other potentially available benefits. However, do not monitor for the person’s compliance to apply for other benefits when it is to increase the VA payment for medical expenses since aid and attendance or housebound benefits are considered exempt income that does not affect eligibility or co-payment.

Determine whether the person is receiving an aid and attendance or housebound allowance as part of his/her VA benefit.

See Section D-6351, VA Pension or Compensation.

 

E-4311.2 $90 VA Pension and Institutional Setting

 

Revision 11-4; Effective December 1, 2011

 

If a veteran without a spouse or child or a surviving spouse without a child is covered by Medicaid for services furnished by a nursing facility, the maximum pension that can be paid to or for the veteran or surviving spouse for any month after the month of admission to such nursing facility is $90. This reduced pension is an aid and attendance allowance in all cases, and not income.

VA law (38 U.S.C. 5503) provides that the amount of the VA pension for an institutionalized Medicaid recipient having neither a spouse nor child (or in the case of a surviving spouse, having no child) cannot exceed $90 per month.

The $90 VA pension may not be used in determining what the person in an institutional living arrangement must pay toward the cost of care. The limited VA pension, up to the amount of $90, is not counted as income in the eligibility or co-payment budget.

There is no association between the reduced pension and the personal needs allowance (PNA). If a veteran has income from other sources, the income from other sources may be considered countable. HHSC is to perform the co-payment calculations to determine the amount of the veteran’s liability toward the cost of care.

Do not refer a person who is receiving the $90 VA pension in an institutional setting to apply for other benefits when it is to increase the VA payment for medical expenses since aid and attendance or housebound benefits are considered exempt income that does not affect eligibility or co-payment. If the person’s only income is the $90 VA pension, refer the person to the Social Security Administration for SSI.

See Section D-6351, VA Pension or Compensation.

A person who has a capped $90 VA aid and attendance is eligible for the PNA up to $60 per month. See the examples below:

  • For a non-SSI Medicaid recipient in an institutional living arrangement who does not have VA aid and attendance capped at $90 per month, the total PNA will be up to the current maximum of $60. The person keeps up to $60 for their personal expenses.
  • For a non-SSI Medicaid recipient in an institutional living arrangement who has VA aid and attendance capped at $90 per month, the total PNA may be up to $60. The person keeps up to $150 for their personal expenses ($90 plus up to $60).
  • State supplementation is not allowed for a Medicaid recipient who is not an SSI recipient.
  • The VA $90 capped aid and attendance and PNA calculation does not impact the Protected Earned Income Allowance.

In a situation in which a veteran has a $90 capped VA aid and attendance and does not have another source of income from which to deduct the $60 PNA, the person will have $90 for their personal expenses and the co-payment is zero. In a situation in which a veteran has a $90 capped VA aid and attendance and the veteran's other source of income is less than $60, the PNA will be up to, but not exceed, $60. This person will have up to $150 for their personal expenses ($90 plus up to $60). There is no state supplement to bring the PNA up to $60 if the veteran does not have other income from which to subtract the PNA. The PNA deduction comes first in the order of all co-payment deductions, including those for incurred medical expenses (IME).

If a person's only income in a facility is the VA pension capped at $90 per month, certify the person for Medicaid, provided the person meets other program requirements, and refer the person for SSI.

 

E-4312 VA Compensation

 

Revision 11-4; Effective December 1, 2011

 

VA compensation is unearned income and is based primarily on service in the armed forces. Payments are made to veterans, dependents or survivors.

The VA makes compensation payments to a veteran because of a service-related disability. The VA also makes compensation payments to a spouse, child or parent of a veteran because of the service-related death of the veteran.

Note: If a person or a recipient moves from a community setting to an institutional setting, entitlements to additional VA benefits may be appropriate due to a change in the situation or increased medical needs. If a person is a veteran or an unmarried widow or widower of a deceased veteran, explore possible entitlement to VA benefits. If the person is potentially eligible but no payment is reported, the person may be required to file for a VA benefit. See Section D-6350, Veterans Benefits, for requirements to apply for benefits.

Budgeting Information

Because VA compensation is not based on need, deduct the $20 general income exclusion in the eligibility determination. See Section G-4110, Twenty-Dollar General Exclusion.

Note: The $20 exclusion does not apply to VA pensions or parents' DIC payments.

Neither the beneficiary's award letter nor the VA check indicates whether aid and attendance is included in a person's total VA payment. To verify the type and amount of benefits received, contact the VA using Form H1240, Request for Information from Bureau of Veterans Affairs and Client's Authorization.

Do not include aid and attendance allowance, housebound allowance and VA reimbursement for unusual medical expenses as a part of the total VA benefit. See Section E-4315, VA Aid and Attendance and Housebound Payments.

 

E-4313 Dependency and Indemnity Compensation

 

Revision 11-4; Effective December 1, 2011

 

Dependency and Indemnity Compensation (DIC) is a monthly benefit paid to eligible survivors of certain deceased veterans:

  • Military service member who died while on active duty.
  • Veteran whose death resulted from a service-related injury or disease.
  • Veteran whose death resulted from a non service-related injury or disease, and who was receiving, or was entitled to receive, VA compensation for service-connected disability that was rated as totally disabling:
    • for at least 10 years immediately before death;
    • since the veteran's release from active duty and for at least five years immediately preceding death; or
    • for at least one year before death if the veteran was a former prisoner of war who died after Sept. 30, 1999.

The surviving spouse is eligible if he/she:

  • validly married the veteran before Jan. 1, 1957;
  • was married to a service member who died on active duty;
  • married the veteran within 15 years of discharge from the period of military service in which the disease or injury that caused the veteran's death began or was aggravated;
  • was married to the veteran for at least one year; or
  • had a child with the veteran; and
    • cohabited with the veteran continuously until the veteran's death or, if separated, was not at fault for the separation; and
    • is not currently remarried.

Note: A surviving spouse who remarries on or after Dec. 16, 2003, and on or after attaining age 57 is entitled to continue to receive DIC.

The $20 exclusion does not apply to VA pensions or parents' DIC payments.

A surviving child is eligible if the child is:

  • unmarried; and
  • under age 18, or between the ages of 18 and 23 and attending school.

Whenever there is no surviving spouse of a deceased veteran entitled to DIC, the children of the deceased veteran are eligible for DIC.

Additional allowances could be included in the DIC benefit for aid and attendance or housebound.

Neither the beneficiary's award letter nor the VA check indicates whether aid and attendance is included in a person's total VA payment. To verify the type and amount of benefits received, contact the VA using Form H1240, Request for Information from Bureau of Veterans Affairs and Client's Authorization.

Do not include aid and attendance allowance, housebound allowance and VA reimbursement for unusual medical expenses as a part of the total VA benefit. See Section E-4315, VA Aid and Attendance and Housebound Payments.

 

E-4314 Educational Assistance

 

Revision 09-4; Effective December 1, 2009

 

The VA provides educational assistance through different programs, including vocational rehabilitation. Medicaid policies on income and resources depend on the nature of the VA program. The veteran’s period of eligibility to receive benefits for educational assistance are as follows:

  • Veterans generally have up to 10 years after leaving the service to complete their education.
  • Veterans enrolled in a vocational rehabilitation program have up to 12 years to complete the program.
  • Veterans participating under the Chapter 33 program, “Post-9/11 GI Bill,” have up to 15 years to complete their education.

Dependents and survivors of veterans may also be eligible for educational benefits. The VA makes payments under Chapter 35, Survivors and Dependents Educational Assistance Program (a non-contributory program), to:

  • children (between ages 18 and 26) of veterans who died in the service;
  • surviving spouses of veterans who died in the service;
  • children of living veterans who are 100% disabled due to a service-connected injury; and
  • spouses of living veterans who are 100% disabled due to a service-connected injury.

Note: Survivors and dependents have 10 years from the date of the veteran's service-connected death or date of 100% disability to participate in this program.

Do not consider as income the following:

  • Payments made by VA to pay for tuition, books, fees, tutorial services or any other necessary educational expenses.
  • Payments made as part of a VA program of vocational rehabilitation, including any augmentation for dependents.
  • Any portion of a VA educational benefit that is a withdrawal of the veteran’s own contribution is conversion of a resource and is not income. However, any portion of the withdrawal that is retained into the month following the month of receipt is a countable resource.

References: The policy in the following items details VA payments that are either not considered as income or exempt as income.

Do consider the following as income:

  • The portion of the VA educational payment designated as a stipend for shelter.
  • Payments made by VA that are used to pay for those things other than necessary educational expenses.

Note: The $20 general income exclusion applies to countable VA educational assistance and these payments are subject to deeming. See Section G-4110, Twenty-Dollar General Exclusion.

 

E-4315 VA Aid and Attendance and Housebound Payments

 

Revision 16-4; Effective December 1, 2016

 

VA pays an allowance to veterans and dependents who are in regular need of the aid and attendance of another individual or who are housebound. This allowance is combined with the individual’s pension or compensation payment.

This special VA allowance can be paid to:

  • disabled veterans;
  • disabled veterans’ spouses;
  • widows; or
  • parents.

If an individual is in an institutional setting (for example, a nursing facility) because of mental or physical incapacity, the VA presumes eligibility for aid and attendance.

Based on policy regarding medical expenses paid by a third party, do not consider in the eligibility and co-payment budgets the following VA payments:

  • aid-and-attendance allowances;
  • housebound allowances; and
  • reimbursement for unusual medical expenses.

Reference: Section E-1720, Social Services That Are Not Income.

Exception: If aid-and-attendance allowances, housebound allowances and reimbursements for unusual medical expenses are deposited into a QIT, the amount deposited is countable for co-payment budgeting. Aid-and-attendance allowances, housebound allowances, and reimbursements for unusual medical expenses are not countable for co-payment budgeting if separated from the pension or compensation benefit before depositing the VA pension into a QIT. Separating and depositing the VA pension amount does not invalidate the QIT. 

If it appears that the individual may be entitled to an aid-and-attendance allowance and is not receiving one, refer the individual to the VA. While living in the community, an individual receives a housebound allowance, but that allowance is adjusted to the aid-and-attendance allowance if the individual moves to an institutional setting. Do not monitor for the individual’s compliance to apply for other benefits when it is to increase the VA payment for medical expenses since aid-and-attendance or housebound benefits are not considered income and will not affect eligibility or co-payment.

Neither the beneficiary's award letter nor the VA check indicates whether aid-and-attendance is included in an individual's total VA payment. To verify the type and amount of benefits received, contact the VA using Form H1240, Request for Information from Bureau of Veterans Affairs and Client's Authorization.

When the income is not considered for the eligibility and co-payment budgets, enter aid-and-attendance allowance, housebound allowance, and VA reimbursement for unusual medical expenses as a separate income source. See Appendix XVI, Documentation and Verification Guide.

 

E-4316 VA Clothing Allowance

 

Revision 09-4; Effective December 1, 2009

 

A lump sum clothing allowance is payable in August of each year to a veteran with a service-connected disability for which a prosthetic or orthopedic appliance (including a wheelchair) is used. The allowance is intended to help defray the increased cost of clothing due to wear and tear caused by the use of such appliances.

A VA clothing allowance is not income.

Reference: Section E-1720, Social Services That Are Not Income

 

E-4317 Payments to Vietnam Veterans' Children with Spina Bifida

 

Revision 09-4; Effective December 1, 2009

 

Do not consider the following types of VA benefits as income or resources for Medicaid purposes:

  • VA payments made to or on behalf of certain Vietnam veterans' natural children, regardless of their age or marital status, for any disability resulting from spina bifida suffered by such children.
  • VA payments made to or on behalf of certain Korea service veterans' natural children, regardless of their age or marital status, for any disability resulting from spina bifida suffered by such children.
  • VA payments made to or on behalf of women Vietnam veterans’ natural children, regardless of their age or marital status, for certain birth defects.

Note: Interest and dividends earned on unspent payments are exempt from income.

Reference: Section E-2150, Other – Exempt Income

 

E-4318 VA Contracts

 

Revision 09-4; Effective December 1, 2009

 

A VA contract for payment of nursing facility services does not affect Medicaid eligibility. If an application is filed, proceed with the eligibility determination. If the person is certified while the contract is still in effect, the VA contract is reported as a third-party resource on Form H1039, Medical Insurance Input.

 

E-4400 Other Annuities, Pensions and Retirement Plans

 

Revision 15-3; Effective September 1, 2015

 

There are two types of annuities:

  • An annuity can be a periodic payment calculated on an annual basis that is a return on prior service. A civil service payment is an example of this type of annuity. It is treated the same as pension or retirement income.

    Example: A person retired from federal service in 1980 after 30 years of employment. Her gross annual Civil Service Annuity (CSA) payment is $5,400, which is paid in 12 monthly installments of $450 each. Because this type of annuity produces a stream of income only, it has no resource value. The monthly payment is countable income.
  • An annuity can also be a contract or agreement for an amount to be paid yearly or at other regular intervals in return for prior payments made by the person. For this type of annuity, the language of the annuity dictates whether disbursements are countable income and describes the payment schedule. See Section F-7000, Annuities, for treatment of pre-DRA and post-DRA annuities.

Pension or retirement payments may be made directly by a former employer or from a fund, insurance or any similar source. An example of a retirement payment is teacher retirement.

Determine the gross and net amounts of the monthly payments. Also determine whether the organization making the payments is providing any other benefits to the person.

Note: When income tax is withheld from retirement, pension or disability benefits, use the gross income amount for the eligibility and co-payment calculations.

See Chapter G, Eligibility Budgets, and Chapter H, Co-Payment.

See Appendix XVI, Documentation and Verification Guide.

Certain pension and retirement payments allow for the person to request a reduced amount. If the reduction is irrevocable, accept the reduced amount in determining the person's eligibility. However, for a person in an institutional setting (for example, a nursing facility or a Home and Community-Based Services waiver program), investigate the reduction for transfer of assets in Chapter I, Transfer of Assets.

If the person is receiving a reduced benefit, ask the person to provide a written statement from an official of the organization addressing the amount of the original benefit, the amount of the reduced benefit, the date of the reduction, and information about the revocability or irrevocability of the reduction.

If the pension or retirement payments are revocable, the person must apply for maximum entitlements.

Reference: Section I-1400, Transfer of Income

If a person’s income from annuities, pensions and retirement plans is greater than the special income limit, but not enough to pay private-pay costs in an institutional setting, the person can consider a QIT. QITs allow people to legally divert their income into a trust, after which the income is not counted for eligibility purposes. For more information, see Appendix XXXVI, Qualified Income Trusts (QITs) and Medicaid for the Elderly and People with Disabilities (MEPD) Information. The payments are countable in the co-payment budget.

 

E-4500 Workers' Compensation

 

Revision 09-4; Effective December 1, 2009

 

Workers' compensation benefits are unearned income. A portion of a person's workers' compensation may be designated for medical, legal or related expenses. Request the person to provide verification of payment and, in addition, any expense required to obtain the benefit.

A person who suffers a work-related injury or illness may be eligible for workers' compensation benefits. These benefits are administered by the Industrial Accident Board under the Texas Workers' Compensation Act. If a person dies as a result of a work-related injury or illness, his dependents or beneficiaries may be eligible for workers' compensation benefits.

Determine the monthly amount of workers' compensation benefits by multiplying the weekly benefit by 4.33. (These benefits are usually paid on a weekly basis.) Also determine the expected duration of the workers' compensation benefits.

Determine and exclude the portion, if any, of the workers' compensation that is considered an expense required to obtain the benefit.

Reference: See Section D-7400, Use of Third-Party Resources, for policies governing recovery of Medicaid payments when additional workers' compensation is received for medical expenses incurred after Medicaid eligibility began.

Verify workers' compensation benefits by one or more of the following methods:

  • Viewing or obtaining a copy of the person's notice of workers' compensation benefits.
  • Obtaining a letter from an official of the Industrial Accident Board.
  • Viewing or obtaining copies of the person's weekly checks (least desirable method).
  • Obtaining proof of any medical, legal or other related expenses if that information is not included in information already provided.
  • Documenting a contact with a knowledgeable source.

 

E-4600 Unemployment Benefits

Revision 11-4; Effective December 1, 2011

 

Unemployment benefits are unearned income.

A person who loses employment may be entitled to unemployment benefits through the Texas Workforce Commission (TWC). To receive unemployment benefits, a person must file an application with TWC. Determine the expected duration and the amount of the unemployment benefits per month. Unemployment benefits may be received on a weekly or biweekly schedule.

Reference: Do not use TWC's Form B-11 to verify unemployment benefits. This form does not verify the actual receipt or amount of benefits.

Verify unemployment benefits by one or more of the following methods:

  • Obtain TWC information through a Data Broker report.
  • Obtain a letter from TWC.
  • Document a contact with a representative of TWC.
  • View or obtain a copy of the person's most recent benefit checks.

Data Broker report will verify quarterly earnings and unemployment benefits. Information is obtained using the person's name and Social Security number. A match will result if the person has applied, is receiving or has received unemployment benefits with TWC. Result response time is generally immediate.

A match by name will provide the person's name, alias name, address, telephone number, Social Security number and date of birth.

Available information includes:

  • if the person has applied for benefits;
  • wages the person earned (per quarter) during the past 24 months;
  • the status of a current claim; and
  • the amount of weekly unemployment benefits, deductions and payment dates.

 

E-4700 Disability Insurance Benefits

Revision 09-4; Effective December 1, 2009

 

Disability benefits are unearned income.

Some insurance policies pay benefits based on the period of time a person is disabled and not on the amount of medical expenses. These policies may be called "income maintenance" policies. Benefits from these policies are unearned income to the extent that they are not used to pay for medical expenses.

Disability benefits normally are paid to a person who has suffered injury or impairment. These payments may be from an employer, insurance or other public or private fund.

Determine the source of the benefit. If the source is covered by one of the unearned income items, such as Social Security or a private pension, use the procedures for that item.