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SI 00830: Unearned Income

Effective Dates: 10/10/2012 - Present

TN 108 (05-10)

Citations:

Social Security Act as amended in October 2008, sec. 473; 1612(a)(2); and 1612(b)

Regulations, 20 CFR 416.1102; 20 CFR 416.1103; 20 CFR 416.1124(c)(12)

A. Introduction to adoption assistance

Adoption assistance programs provide payments and/or services for children whom unassisted adoption is unlikely because of age, ethnic background, physical, mental or emotional disability, etc. The income of either the adopting parent, the adopted child, or both, may have been considered in determining the adoption assistance payment. Usually, adoption assistance will be formalized in a written agreement between the adopting parents and the agency involved. Adoption assistance payments may be provided by public or private agencies and may be based on financial need.

B. Policy for adoption assistance

1. Adoption assistance under Title IV-E prior to 10/1/09

Adoption assistance provided by States under Title IV-E of the Social Security Act involves Federal funds and is needs-based. Under Title IV-E, there is no income eligibility test for the adopting parents but the children must be those who are, or could be, eligible for Aid to Families with Dependent Children (AFDC) or Supplemental Security Income (SSI) prior to adoption. Therefore, there is an income eligibility test for the children who receive Title IV-E adoption assistance. Concurrent receipt of Title IV-E adoption assistance and SSI is permissible.

Adoption assistance cash payments made to adoptive parents on behalf of a child under Title IV-E are Federally funded income based on need (IBON) to the adopted child. This income is not subject to the $20 general income exclusion and the Presumed Maximum Value (PMV) cannot be applied. Therefore, the total payment is considered cash income to the adopted child and is counted dollar for dollar.

References

2. Adoption assistance under Title IV-E effective 10/1/09

In October 2008, Public Law 110-351 amended the eligibility requirements for the Title IV-E adoption assistance program. A child that is identified as an “applicable child” can receive adoption assistance without meeting an income eligibility test.

An applicable child is:

  • a child who meets the applicable age requirements, or

  • a child who has been in foster care for at least 60 consecutive months, or

  • a sibling to either such child if both are to have the same adoption placement.

A child who is not referred to as an applicable child is one to whom the revised eligibility criteria do not apply and to whom the eligibility requirements in place prior to October 1, 2009 apply.

  • Adoption assistance for an applicable child

Adoption assistance cash payments made to adoptive parents on behalf of an applicable child under Title IV-E (both the Federal amount and State amount) are unearned income to the adopted child. Since there is no income eligibility test requirement for the applicable child, this income is subject to the $20 general income exclusion.

Reference

SI 00810.420, $20 Per Month General Income Exclusion

  • Adoption assistance for a non-applicable child

Adoption assistance cash payments made to adoptive parents on behalf of a non-applicable child under Title IV-E (both the Federal amount and State amount) are means-tested and are Federally funded IBON to the adopted child. This income is not subject to the $20 general income exclusion and the PMV cannot be applied. Therefore, the total payment is considered cash income to the adopted child and is counted dollar for dollar.

References

  • Kinship guardianship assistance payments

Public Law 110-351 was also amended to allow States to use Federal Title IV-E funds for Kinship Guardianship Assistance payments to grandparents and other relatives who have assumed legal guardianship of children for whom they have custody.

Kinship Guardianship Assistance payments (both the Federal amount and State amount) made to guardian relatives on behalf of a child are Federally funded IBON. This income is not subject to the $20 general exclusion and the PMV cannot be applied. The total payment is considered cash income to the child and is counted dollar for dollar.

References

3. Adoption assistance under Title IV-B or Title XX

Adoption assistance payments involving funds provided under Title IV-B or Title XX of the Social Security Act are social services and are not income. For social services excluded from income see SI 00815.050.

4. Other adoption assistance

Adoption assistance payments not included above are subject to the general rules pertaining to income and income exclusions.

NOTE: Although adoption assistance payments made under Title IV-E are always income to the child, other adoption assistance payments may result in income to the parent or the child depending on the nature of the assistance. When evaluating needs-based payments, it is important to remember that the income eligibility test must apply to the person to whom we attribute the income in order to exclude the payment as assistance based on need (ABON) or not to apply the $20 general income exclusion.

EXAMPLE: A wholly State-funded program makes a monthly payment to the parents only if the child has no other income. The claims representative determines that the payment is income to the parents. Despite the fact it is wholly State-funded, the payment cannot be excluded as ABON to the parents because there is no income eligibility test for the parents, only for the child.

References

C. Procedure for adoption assistance

  1. Use a copy of the adoption assistance agreement to verify the source, purpose, amount and duration of the adoption assistance. If a copy of the agreement is not available, contact the agency involved. If a Title IV-E payment from another State is involved, use e562, Request for Assistance/Certification of Documents or Records, to request that the district office parallel to the responsible State agency secure the necessary information.

    NOTE: Effective 10/1/09, contact the local State agency to determine if the child is considered an “applicable child” if the adoption agreement does not provide the information.

  2. If the adoption agreement indicates only one payment amount for several children, divide the amount by the number of children to find the payment amount for one child.

  3. Determine the nature of the assistance and apply the appropriate rules pertaining to income.

References

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