TN 14 (06-09)

A. Unearned income inquiry

We must ask about the source and amount of all of the applicant’s unearned income, however; we do not count all of the unearned income to determine eligibility for the Part D subsidy.

B. Unearned income exclusions

1. General rules

• For purposes of determining countable income for the subsidy, the unearned income exclusions that apply to the SSI program, also apply to Part D subsidy eligibility determinations;

• Exclusions do not reduce unearned income below zero;

• Except for any unused portion of the $20 per month general income exclusion, unused unearned income exclusions are not applied to earned income.

2. Exceptions to the general rules

• We do not approve the Plan for Achieving Self-Support (PASS) to exclude income and resources to enable an individual to qualify for the subsidy.

• All interest and dividends, regardless of the source, are excluded from income to determine eligibility for the subsidy.

• The $20 per month general income exclusion applies to all unearned income including income based on need (IBON).

C. Income exclusions under the American Recovery and Reinvestment Act (ARRA) of 2009

1. One-time $250 economic recovery payment income exclusion

On February 17, 2009, the President signed the ARRA of 2009. This law provides for a one-time payment of $250 to certain individuals who, for any month during the 3-month period prior to the month of enactment of the law, were entitled to Social Security, Railroad Board, or Department of Veterans Affairs benefits.

• The one-time $250 payments are excluded from income for purposes of determining Part D subsidy eligibility.

• The bulk of the one-time $250 payments will be issued in May 2009. Under the law, no payments can be disbursed after December 31, 2010.

For information on applying this exclusion during the verification process, see HI 03035.010 and HI 03035.020.

2. The $25 per week increase in unemployment compensation is not excludable

ARRA provides for an additional $25 per week in unemployment compensation in States that agree to participate in this program change.

If the State pays an additional $25 per week in an individual’s unemployment compensation check, this amount is not excluded from income or resources for purposes of determining Part D subsidy eligibility. The additional $25 per week is treated as part of the individual’s unemployment compensation and counted under normal income rules. If the individual retains the additional unemployment compensation, it becomes a resource, as of the first day of the month following the month of receipt.

For more information about unemployment compensation, see SI 00830.230. For more information about resource exclusions for Part D subsidy, see HI 03030.020.

3. The Making Work Pay Tax Credit income exclusion

ARRA provides for a Making Work Pay Tax Credit of up to $400 per year for 2009, and 2010 (up to $800 when a couple files a joint tax return).

• The tax credit will be provided to working individuals by reducing the amount of income tax withholding that is deducted from their pay checks. Working individuals’ take home pay will increase slightly.

• Any tax credit or refund provided under this provision is not countable as income. This includes situations where the individual has multiple employers. Therefore, the increase in the individual’s take home pay from this tax credit is not counted as income for Part D subsidy.

• No special action is needed. An increase in the individual’s take home pay does not affect our computation of countable earned income, which is based on the gross wages before deductions.

• Individuals who have very low wages may not receive their full $400 or $800 tax credit through an increase in their take home pay. Also, self-employed individuals will not receive the tax credit in take home pay. These individuals can get the tax credit as part of a tax refund when they file their income tax returns for 2009, and 2010. If the tax credit is received as part of their tax refund, it is also excluded from income for Part D subsidy.

For information on applying this exclusion during the verification process, see HI 03035.010 and HI 03035.020.

4. The Filipino Veterans Equity Compensation Fund income exclusion

ARRA established the Filipino Veterans Equity Compensation Fund, which offers a one-time payment to eligible veterans who served in the Philippines armed forces during World War II.

• To receive the payment, the veteran must file a claim with the U.S. Department of Veterans Affairs, within one year of the date of the ARRA law (from February 17, 2009, through February 16, 2010), and must meet the military service requirements set forth in the ARRA.

• Filipino veterans who are citizens of the United States are eligible for a one-time payment of $15,000, and Filipino veterans who are non-citizens are eligible for a one-time payment of $9,000. A surviving spouse may receive this payment, but only if the veteran filed for it prior to death.

• This one-time payment is excluded from income and resources for purposes of determining Part D subsidy eligibility, whether received by the veteran or the surviving spouse.

NOTE: Direct all public inquiries related to applying or obtaining eligibility requirements to the Department of Veterans Affairs Office at 1-800-827-1000 or to their website: www.va.gov (Office locator listed).

For more information about resource exclusions for Part D subsidy, see HI 03030.020.

For information on applying this exclusion during the verification process, see HI 03035.010 and HI 03035.020.

D. Income exclusion under the Economic Stimulus Act of 2008

On February 13, 2008, the President signed the Economic Stimulus Act of 2008. This law provides for payments of up to $600 per taxpayer ($1,200 for a joint tax return), and $300 for each minor child in the household. The first stimulus payments were issued in May 2008, and distribution was completed by December 31, 2008.

These stimulus payments are excluded from income for purposes of determining eligibility for Part D subsidy eligibility.

E. Income exclusions for victims of presidentially declared disasters

The SSI income exclusions applicable to victims of Hurricane Katrina and other presidentially declared disasters are also applicable for purposes of making Part D subsidy eligibility determinations.

F. References

• SI 00810.007 - Income Exclusions

• SI 00810.420 - $20 Per Month General Income Exclusion

• SI 00830.050 - Overview of Unearned Income Exclusions

• SI 00830.099 - Guide to Unearned Income Exclusions