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State of Wisconsin |
Release 24-02 |
Unearned income is income that a member receives from sources other than employment. Unless it is disregarded income (see Section 15.3 Exempt and Disregarded Income) or an income deduction (see Section 15.7 Income Deductions), count gross unearned income in a person’s income total.
When two payments from the same income source are received the same month due to mailing cycle adjustments, count each payment only for the month it is intended. Income sources commonly affected by such mailing cycle fluctuations include general assistance, other public assistance programs, SSI, and SSA benefits.
| Note: |
Occasionally, a regular periodic payment (e.g., Title II or VA benefits) is received in a month other than the month of normal receipt. As long as there is no intent to interrupt the regular payment schedule, consider the funds to be income in the normal month of receipt. |
A trust is any arrangement in which a person (the "grantor") transfers property to another person with the intention that the 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 hold, manage, or administer the property for the benefit of the grantor or of the beneficiary.
The grantor can be:
All payments (including interest and dividends) from a trust to the beneficiary are unearned income to the beneficiary. See Section 15.4.9 Interest and Dividend Income for instructions on counting interest.
If the beneficiary does not receive payments (including interest and dividends) from the trust, but they are added back to the trust principal, do not count them as income to the beneficiary if the beneficiary is elderly, blind, or disabled.
| Note: |
If the grantor is an institutionalized person or acting on behalf of an institutionalized person, payments from any trust, both revocable and irrevocable, that are not to or for the benefit of the institutionalized person are divestment (see Section 17.2 Evaluation of Transfers for Divestment). |
Sick benefits are payments, such as income continuation, received from insurance. Cash from any insurance policy that pays a flat rate benefit to the recipient without regard to the actual charges or expenses incurred is unearned income. Examples of these types of insurance policies are per diem hospitalization or disability insurance, or cancer or dismemberment policies.
Do not count the following:
Count normal UC that is received. Count UC that is intercepted to collect child support as if the UC beneficiary actually received the intercepted dollars.
Retirement benefits include work-related plans for providing income when employment ends. Examples of retirement benefits include:
Periodic payments made from a work-related retirement benefit plan should be counted as income in the month of receipt.
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.
| Example 1: | Mike withdraws $2,000 he has in an IRA and deposits it into a savings account. Continue to treat the $2,000 as a countable asset. This is just a conversion from one form of an asset to another. |
Count unrestricted General Relief and charitable payments as follows:
A gift is something a person receives that 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).
Treat non-cash gifts as an asset, as you would an asset of a similar type. A cash gift is unearned income only in the month of receipt. Count the gift as an asset in the months following the month of receipt.
Disregard cash gifts (such as for birthdays, graduation, and Christmas) that total $30 or less for each AG member for each calendar quarter.
Funds received through a crowdfunding account, such as GoFundMe and Kickstarter, would be considered a gift and counted as unearned income in the month of receipt and as an available asset in subsequent months as long as the funds are still in the person’s possession (i.e., the person did not spend it in the month of receipt).
Funds that are not accessible for a person to withdraw are an unavailable asset. Disbursements would be unearned income in the month withdrawn and an available asset in subsequent months if the funds are still in the person’s possession.
Count any portion of monthly payments received that are considered interest from a land contract as unearned income. If the land contract cannot be sold because it is not considered to be negotiable, assignable, enforceable, and marketable, it cannot be considered an available asset. Count any repayments toward the principal of the loan as income. If the land contract can be sold, it is counted as an available asset, and the principal portion of the repayment remains an asset. Disregard any repayments toward the principal of the loan as income. 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.
| Example 2: |
Bob receives land contract payments from Farmer Brown twice a year: one $5,000 payment in March and another $5,000 payment in September. Ten percent of that payment is interest. If Bob is applying in February, prorate the land contract payments Bob receives after he becomes eligible. In March when Bob receives a $5,000 land contract payment, divide the total countable income ($5,000 times 10 percent equals $500) by the frequency of the payments (six months) to get the budgeted income amount of $83.33 per month ($500 divided by six months equals $83.33). Begin budgeting this amount in March. |
If an AG member makes a loan, promissory note, or mortgage (including a land contract), treat the repayments as follows:
Most interest and dividend earnings are excluded income so are not counted when determining Medicaid eligibility. See Section 15.4.9.1.1 Excluded Sources of Interest or Dividend Income for excluded sources of interest or dividend income and Section 15.4.9.1.2 Interest and Dividends Income Not Excluded for Elderly, Blind, or Disabled Medicaid for interest and dividend income not excluded for EBD.
Most interest and dividend income from a resource excluded under SSI rules will be an excluded source of income for all Medicaid eligibility and post-eligibility determinations. The are, however, some exceptions (see Section 15.4.9.1.2 Interest and Dividends Income Not Excluded for Elderly, Blind, or Disabled Medicaid).
Do not count the following sources of interest or dividend payments:
Count the following interest and dividends income for Medicaid:
Count the non-excluded interest and dividend income listed above as unearned income only when both the following are true:
Count Social Security benefits as unearned income in the month received.
See Section 16.7.10 Property Settlement.
See Section 16.7.11 Lump Sums Payments.
For elderly or disabled cases, apply the disregards listed in Section 15.4.13.1 Total Disregards and Section 15.4.13.2 Partial Disregards but count all other money that is derived from any other student loan or grant not listed below. Use the Student Financial Aids Report (F-16021) to obtain the type and amount of the student's aid package. Also, use it to inform the student financial aids office of assistance granted.
See Section 15.4.13.3 Workforce Investment Act for instructions on how to treat income that is earned under the WIA.
For elderly/disabled cases, totally disregard all of the following sources of money for education or training:
For elderly/disabled cases, partially disregard all other money for education or training as follows:
| Example 3: |
The remaining $600 of a grant is intended to cover January through June. If it is received in:
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For both family and elderly/disabled Medicaid cases, disregard all unearned income from WIA to any adult or minor participating in WIA, including:
Earned WIA income is paid in the form of wages from on-the-job training and work experience activities. Disregard all earned WIA income of a minor for up to a total of six months per calendar year. Negotiate with the Medicaid group which six months of income to disregard. The six months do not need to be consecutive. Budget WIA income earned by a minor in other than these six months according to (Section 15.5.8. Student Income).
Count the earned WIA income of adult participants.
The Job Corps Program is a part of WIA. Consider a minor who is participating in the Job Corps as a student when you calculate the income disregards for full-time students and part-time students who are not employed full-time.
Consider Job Corps payments to adult participants as unearned WIA income.
Count child support income as unearned income.
Child support payments (including arrearage payments) made to or on behalf of a disabled child are counted as unearned income to the child.
One-third of the amount of a child support payment made to or for a disabled child by an absent parent is excluded as income. This income exclusion applies to both court-ordered and voluntary child support payments.
This exclusion only applies to payments made by an absent parent. Sometimes a family is reunited, and the parent is still making child support payments, in compliance with a court order, even though that parent is now living with the child. Under these circumstances, the one-third income exclusion is not allowed since the parent is no longer considered to be an absent parent.
The one-third income exclusion described above only applies to EBD Medicaid eligibility determinations; it does not apply to BadgerCare Plus eligibility determinations.
Count profit sharing income as unearned income.
Count any compensation that a member of a religious order receives, not related to gainful employment, as unearned income even if the compensation is turned over to the order.
Count the compensation as earned income if it meets the criteria in Section 15.5.12 Income Received by Members of a Religious Order.
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. Count these payments as unearned income.
Gambling winnings are counted as unearned income in the month of receipt. Gambling losses cannot be used to offset the winnings.
Disregard the first $500 of the monthly income from Tribal Per Capita payments from gaming revenue. If the payments are received less often than monthly, prorate the gross payment amount over the months it is intended to cover and disregard $500 from the monthly amount.
This applies to eligibility determinations for all Medicaid subprograms for elderly, blind, or disabled persons except SeniorCare and LTC programs such as Institutional Medicaid, Family Care, and HCBWs, including Partnership and PACE. For these subprograms, count all income from Tribal Per Capita payments from gaming revenue as unearned income.
Count all alimony, maintenance, and other spousal support payments.
Count reimbursements for normal living expenses, such as rent, utilities, clothing, and food eaten at home, as income. For examples of reimbursements that are not counted as income, see Section 15.3.19 Reimbursements.
Income allocated from an institutionalized spouse to a community spouse per Section 18.6 Spousal Impoverishment Income Allocation is counted income to the community spouse if that community spouse is receiving a form of EBD Medicaid.
When a Medicaid group member reports rental income to the IRS as self-employment income, see Section 15.6.4 Self-Employed Income Sources.
If he or she does not report it as self-employment income, the net rental income is counted as unearned income. Determine net rental income as follows
| Example 4: |
George owns a four unit apartment building and lives in unit 1. His annual interest paid on his mortgage for the most recent tax year is $9,765. His operational expenses, including taxes on the building, from the most recent taxes is $12,359. This totals $22,124. This amount divided by four units equals a proportionate share of $5,531. $5,531 multiplied by three rental units equals $16,593. This represents his total budgetable annual expenses. His total annual rental income equals $28,800 ($800 per unit per month). $28,800 –$16,593 $12,207 $12,207 / 12 = $1,017.25 net monthly rental income. |
Count REWARD Wisconsin stipends as income. These stipends are awarded to child care professionals.
There is no uniform policy for how to count payment types related to the COVID-19 pandemic; some payment types are counted as income and some payment types are not counted as income. The criteria used to evaluate whether a payment type is counted as income include:
The payment types that count as income include but are not limited to:
See section 15.3.30 Certain Payment Types Related to the COVID-19 Pandemic for non-countable types of pandemic-related income.
If virtual currency is sold, income received from the sale is counted as income. See SECTION 15.5.19 VIRTUAL CURRENCY for information about treatment of virtual currency that the applicant or member has earned through work.
This page last updated in Release Number: 23-04
Release Date: 12/18/2023
Effective Date: 12/18/2023
The information concerning the Medicaid program provided in this handbook release is published in accordance with: Titles XI and XIX of the Social Security Act; Parts 430 through 481 of Title 42 of the Code of Federal Regulations; Chapters 46 and 49 of the Wisconsin Statutes; and Chapters HA 3, DHS 2, 10 and 101 through 109 of the Wisconsin Administrative Code.
Notice: The content within this manual is the sole responsibility of the State of Wisconsin's Department of Health Services (DHS). This site will link to sites outside of DHS where appropriate. DHS is in no way responsible for the content of sites outside of DHS.
Publication Number: P-10030