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State of Wisconsin |
HISTORY |
The policy on this page is from a previous version of the handbook.
Other income is any payment that the member receives from sources other than employment. Unless it is disregarded income, count the gross payment in the person’s income total.
Unemployment Compensation (UC) - Count UC that is intercepted to collect child support as if the UC beneficiary actually received the intercepted dollars.
Child Support
Under non-MAGI rules, count child support income as unearned income.
Under MAGI rules, do not count child support income. If a household is receiving family support, divide the payment by the number of members in the household. The amount of the payment allocated to the child(ren) is considered child support and is disregarded. Count the amount of the payment allocated to the adult(s) as alimony/spousal support unless the divorce/separation order by the court designates the spousal support payments as being non-taxable. If the spousal support payments are non-taxable, they are exempt under MAGI rules.
Social Security Benefits - Count Social Security Benefits as unearned income in the month received.
Supplemental Security Income (SSI) is not counted (16.2.33).
The following is a brief list of the potential codes that should be used in coding Social Security income types:
SSDC - Social Security Disabled Child
SSDI - Social Security Disability/Wage Earner
SSDW - Social Security Disability/Wife
SSRE - Social Security Retirement
SSSC - Social Security Surviving Child
SSSS - Social Security Surviving Spouse
SSWW - Social Security Disabled Widow(er)
Under MAGI rules, although Social Security Benefits are not taxable, they must be counted as unearned income. However, Social Security Benefits are not considered when determining if an individual is “expected to be required” to file a tax return for the current year. See section 2.7.2 for more information.
Federal Match Grants for Refugees - Some refugee resettlement agencies have grants available for refugees for their second, third, and fourth month after arrival in the U.S. These are cash grants and can vary in the amount issued. Under non-MAGI rules, count these payments as unearned income. Under MAGI rules, do not count this income.
Gifts - A gift is something a person receives which is not repayment for goods or services the person provided and is not given because of a legal obligation on the giver’s part. To be a gift, something must be given irrevocably (that is, the donor relinquishes all control).
Under non-MAGI rules, count Monetary gifts over $30 a calendar quarter. A Calendar quarter is three consecutive months beginning with January, April, July or October.
Under MAGI rules, do not count the value of property received as a gift as income. Count a gift as income in the month received if it meets either of the following criteria:
Income from a bequest, devise or inheritance
Income generated from property given to a trust if the income is paid, credited or distributed to the individual
| Example 1: Keisha is the beneficiary of a trust. Land was given to the trust, and it generates interest that is distributed to Keisha as the beneficiary. Count this interest as unearned income. |
Money from Another Person is money a person receives which is not repayment for goods or services the person provided and is not given because of a legal obligation on the giver’s part. This is not a loan.
Under non-MAGI rules, count money from another person if the amount is over $30 a calendar quarter. A Calendar quarter is three consecutive months beginning with January, April, July or October.
Under MAGI rules, count money from another person as income in the month received only if it meets either of the following criteria:
Income from a bequest, devise or inheritance
Income generated from property given to a trust if the income is paid, credited or distributed to the individual
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Example 2: Mimi receives $500 each month from her parents. She is not expected to pay back this money. Mimi’s BadgerCare Plus eligibility is determined using MAGI rules. The $500 is not counted as income for BadgerCare Plus eligibility. |
Note: If the money is received from another person in exchange for goods or services (such as an informal arrangement in which someone rents a room in his or her house), and if the payment is regular and predictable, it should be counted under both MAGI and non-MAGI rules. See Chapter 16.4.3.1 for information on counting rental income.
| Example 3: Jeremy pays Micah $300 each month to live in a room in Micah’s house. Micah and Jeremy do not have a formal lease agreement, but the payment is regular and predictable. Count the $300/month as income for BadgerCare Plus eligibility. |
Land Contract - Count any portion of monthly payments received that are considered interest from a land contract as unearned income. Do not count the principal as income, because it is the conversion of one asset form to another. Deduct from the gross amount any expenses the person is required to pay by the terms of the contract.
If the income is received less often than monthly, prorate the income to a monthly amount. Do not begin budgeting this monthly amount until the person first receives a payment after becoming eligible.
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Example 4: Bob receives land contract payments from Farmer Brown twice a year, one $500 payment in March and another $500 payment in September.
If Bob is applying in February prorate the land contract payments Bob receives after he becomes eligible. In March when Bob receives a $500 land contract payment, divide the total income ($500) by the frequency of the payments (six months) to get the budgeted income amount of $83.33 per month ($500/6 months = $83.33). Begin budgeting this amount in March. |
Loans - If an BadgerCare Plus member makes a loan (except a land contract), treat the repayments as follows:
Count the interest as unearned income in the month received. In the months following the month the interest payment was received, count the interest payment as an asset.
Do not count any repayments toward the principal of the loan, whether it is a full payment, a partial payment, or an installment payment, as an asset.
If an AG member receives a loan and it is available for current living expenses, count it as an asset. Do this even if there is a repayment agreement. If it is not available for current living expenses, disregard it.
Profit Sharing - Count profit sharing income as unearned income in the month received. Tax-deferred contributions made to a profit-sharing plan are not taxable and are not counted as income.
Retirement Benefits - Retirement benefits include work-related plans for providing income when employment ends (e.g. pension disability or retirement plans administered by an employer or union).
Other examples of retirement funds include accounts owned by the individual, such as Individual Retirement Accounts (IRA) and plans for self-employed individuals, sometimes referred to as KEOGH plans.
Under non-MAGI rules, periodic payments made from a work-related retirement benefit plan should be counted as income in the month of receipt. Payments from an ineligible spouse’s work related pension account are also counted as income to the ineligible spouse.
Any periodic payments from individually owned accounts (e.g., IRA) should not be counted as income in the month of receipt. They are considered the same as withdrawals from an applicant’s savings account.
Consider IRAs, Keoghs, or other retirement funds that are completely cashed in as a conversion from one asset form to another. BadgerCare Plus does not count assets in eligibility determinations.
Under MAGI rules, count the taxable portion of any retirement distribution as unearned income.
Sick Benefits -
Under non-MAGI rules, count Sick benefits received from an insurance policy such as an income continuation policy as unearned income.
Under MAGI rules, count sick benefits received from an insurance policy if the individual’s employer contributed or paid for the benefit. Do not count the following:
Reimbursement for medical care;
Payments for loss of a member or bodily function, or permanent disfigurement; or
Amounts computed with reference to the injury but not with respect to the individual’s absence from work.
Trusts - A trust is any arrangement in which a person (the "grantor”) transfers property to another person with the intention that that person (the "trustee”) hold, manage, or administer the property for the benefit of the grantor or of someone designated by the grantor (the "beneficiary”).
The term "trust” includes any legal instrument or device or arrangement which, even though not called a trust under state law, has the same attributes as a trust. That is, the grantor transfers property to the trustee and the grantor's intention is that the trustee holds, manages, or administers the property for the benefit of the grantor or of the beneficiary.
The grantor can be:
The BadgerCare Plus member.
The spouse of the BadgerCare Plus member.
A person, including a court or administrative body, with legal authority to act in place of or on behalf of the member or the member’s spouse. This includes a power of attorney or guardian.
A person, including a court or an administrative body, acting at the direction or upon the request of the member or the member’s spouse. This includes relatives, friends, volunteers or authorized representatives.
All regular payments, including dividends and interest, made under the terms of the trust, from the trust to the beneficiary are unearned income to the beneficiary. Dividends and interest income are counted even if they are tax exempt.
Gambling Winnings
Under non-MAGI rules, gambling winnings are counted as unearned income in the month of receipt. Gambling losses cannot be used to offset the winnings.
Under MAGI rules, count gambling winnings that are regular and predictable as income. Gambling losses cannot be used to offset other types of income.
Royalties - Count Royalty income is as unearned income. Royalties are payments received for granting the use of property owned or controlled. Examples are patents, copyrighted materials or a natural resource. The right to income is often expressed as a percentage of receipts from using the property or as an amount per unit produced.
Capital and Ordinary Gains and Losses
Under non-MAGI rules, do not count personal capital and ordinary gains or losses.
Under MAGI rules, if personal capital gains are regular and predictable, count as unearned income. Personal capital losses can be used to offset the individual’s other income types. In situations where an individual is planning to file a joint tax return with his or her spouse, personal capital losses may offset the spouse’s income.
Student Financial Aids
Work study income and any income from an internship or assistantship should be counted as earned income. Grants, scholarships, fellowships and any additional financial assistance provided by public or private organizations that exceed the cost of tuition, books and mandatory fees are counted as unearned income and should be pro-rated over the period of time they are intended to cover. Student loans are not counted as income irrespective of what the loan is used to pay for.
| Example 5: Mary was awarded a scholarship for $3,500 in July that is intended to cover her fall semester (September through December). Her tuition and course related expenses are $3,250 for the semester. The $250 that exceeds the amount of tuition and course-related expenses will be pro-rated over the four month period from September through December at $62.50 in unearned income each month ($250/4 months = $62.50/month). |
Types of grants, scholarships and fellowships counted as income include:
The following educational aid types are not counted as income and will not be considered when determining if grants, scholarships, and fellowships exceed the cost of tuition, books, and mandatory fees:
The following expense types will be used to offset income from grants, scholarships, fellowships and other financial aid:
The following expense types will not be allowed to offset income from grants, scholarships or other financial aid:
Note: When an applicant or member is enrolled in job-related classes or training, and the tuition is reimbursed by the applicant's or member’s employer, this may be considered reimbursement for job- or training-related expenses (as defined in Section 16.2 Income Types Not Counted). As long as the reimbursement is not more than the cost of the class or training, it does not need to be budgeted as educational aid.
This page last updated in Release Number: 16-02
Release Date: 08/08/2016
Effective Date: 08/08/2016
The information concerning the BadgerCare Plus program provided in this handbook release is published in accordance with: Titles XI, XIX and XXI of the Social Security Act; Parts 430 through 481 of Title 42 of the Code of Federal Regulations; Chapter 49 of the Wisconsin Statutes; and Chapters HA 3, DHS 2 and 101 through 109 of the Wisconsin Administrative Code.
Publication Number: P-10171