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16.2 Income Types Not Counted

1. Adoption Assistance

2. Agent Orange Settlement Fund

3. Combat Pay

4. Other Military Pay

5. Crime Victim Restitution Program

6. Disaster and Emergency Assistance

7. Income of People Younger than 18 Years Old

8. Foster Care 

9. Individual Development Account

10. Jury Duty Payments

11. Kinship Care

12. Life Insurance Policy Dividends

13. Nutrition Benefits

14. Payments to Native Americans

15. Payments to Nazi Victims

16. Radiation Exposure Compensation Act (PL 101-426)

17. Refugee Cash Assistance Program Payments

18. Refugee "Reception and Placement" Payments

19. Reimbursements

20. Relocation Payments

21. Repayments

22. Special Programs

23. Spina Bifida Child

24. Susan Walker Payments

25. Student Financial Aids

26. Stipends from the University of Wisconsin Upward Bound Program

27. Tax Refunds (Income and EITC)

28. Unpredictable Income

29. Veterans Benefits

30. Wartime Relocation of Citizens

31. Workforce Investment Act Unearned Income

32. W-2 Payments

33. General Relief and Charity

34. SSI

35. Lump Sums Payments

36. Property Settlement

37. Subsidized Guardianship Payments

38. Child Support

39. Gifts

40. Money from Another Person

41. Inheritances, Bequests, and Devises

42. Workers' Compensation

43. Federal Match Grants for Refugees

44. Loans

45. Live-In Care Providers

46. ABLE Accounts

47. Income Allocated to a Community Spouse

 

The following types of income are not included in the countable income when determining eligibility for BadgerCare Plus.

1. Adoption Assistance

2. Agent Orange Settlement Fund

Do not count payments received from the Agent Orange Settlement Fund or any other fund established in settling In Re "Agent Orange" Product Liability Litigation, M.D.L. No. 381 (E.D.N.Y.). This is retroactive to January 1, 1989. Do not count these payments for as long as they are identified separately.

3. Combat Pay

Do not count combat zone pay that goes to the household that is in excess of the military person's pre-deployment pay. The exclusion lasts while the military person is deployed to the combat area.

 

If the amount of military pay from the deployed absent family member is equal to or less than the amount the household was receiving prior to deployment, count all of the income to the household. Any portion of the military pay that exceeds the amount the household was receiving prior to deployment to a designated combat zone should not be counted when determining the household’s income.

 

Example 1: John's wife Bonnie and their daughter have an open BadgerCare Plus case. John is in the military stationed overseas; his monthly income is $1,000. John sends his wife $1,000 every month.
 
When John is deployed to a combat zone his pay is increased to $1,300 a month, which is deposited into a joint account. Because the $300 is combat zone pay, it is not counted in the determination. The pre-combat pay of $1,000 is budgeted as unearned income for BadgerCare Plus.

4. Other Military Pay

Do not count income received for the following purposes:

 

Note: Military pay can be verified using the Leave and Earnings Statement received by active duty personnel.

5. Crime Victim Restitution Program

Payments received from a state-established fund to aid victims of a crime.

6. Disaster and Emergency Assistance

Payments made by federal, state, county, and local agencies and other disaster assistance organizations. 

7. Income of People Younger than 18 Years Old

See Section 2.8 Modified Adjusted Gross Income Counting Rules for information about counting income for people younger than 18 years old.

8. Foster Care 

9. Individual Development Account

Payments that are made in the form of matching funds to buy a home, start a business, or to complete post-secondary education.   

10. Jury Duty Payments

Count all jury duty payments as earned income for the month in which it is received if the payments are not turned over to the individual’s employer. Amounts received separately as reimbursements or allowances for travel to and from the courthouse, meals, and lodging during jury duty are not countable.

11. Kinship Care

12. Life Insurance Policy Dividends

13. Nutrition Benefits

Received from the following:

14. Payments to Native Americans

  1. Distributions from Alaska Native Corporations and Settlement Trusts, including:
  2. Other Exempt Tribal Payments
    Disregard non-gaming tribal income from the following sources:
  3. Tribal general welfare payment received under the Tribal General Welfare Exclusion Act. (Note: This exemption applies only to MAGI budgeting rules.)

15. Payments to Nazi Victims

Made under PL 103-286 to victims of Nazi persecution.

16. Radiation Exposure Compensation Act (PL 101-426)

Payments to persons to compensate injury or death due to exposure to radiation from nuclear testing ($50,000) and uranium mining ($100,000). The federal Department of Justice reviews the claims and makes the payments. If the affected person is dead, payments are made to his or her surviving spouse, children, parents, or grandparents. This is retroactive to October 15, 1990. Do not count these payments for as long as they are identified separately.

17. Refugee Cash Assistance Program Payments

The Refugee Cash Assistance program is administered by W-2 agencies and is made available for refugees who do not qualify for W-2.

18. Refugee "Reception and Placement" Payments

Refugee "Reception and Placement" payments made to refugees during the first 30 days after their arrival in the U.S. Reception and Placement payments are made by voluntary resettlement agencies and may be a direct payment to the refugee individual/family or to a vendor.

19. Reimbursements

Reimbursements for out-of-pocket expenses that an assistance group member has incurred and/or paid.  However, reimbursements for normal household living expenses (rent, clothing, or food eaten at home) are counted.

 

Examples of reimbursements that are not counted: 

 

The reimbursement payment should not be more than the person’s actual out-of-pocket expenses. If it is more, count the excess amount as unearned income.

20. Relocation Payments

Under Wis. Stat. § 32.19, relocation payments are available to displaced persons. The following are examples of costs that the relocation payments are intended to cover: moving expenses and replacement housing and property transfer expenses. Do not count the amounts paid by any governmental agency or organization listed in Wis. Stat. § 32.02. Do not count Title II, Uniform Relocation Assistance and Real Property Acquisition Policies Act payments. Its purpose is to treat people displaced by federal and federally aided programs fairly so that they do not suffer disproportionate injuries as a result of programs designed for the public's benefit.
 

Do not count Experimental Housing Allowance Program payments. Its purpose is to study housing supply. Test areas, which include Brown County, were selected throughout the United States, and contracts were entered into prior to January 1, 1975.  A sample of families was selected to receive monthly housing allowance payments.

21. Repayments

Repayments of money the member has received from an economic support program and must give back because of a program error or violation. Since he or she is not entitled to the money, he or she must repay it; therefore it should not be counted as income to the member.

 

Do not count the following repayments:

 

Example 2: Richard receives $50 a month from the VA and $250 from Social Security. The income from the two sources is added together to equal $300. If the VA overpays Richard by $200, he can only pay back the $50 a month he receives from the VA. If he repays more, for instance, $75 a month, only $50 should be disregarded.

 

22. Special Programs

Income received from any of the following:

23. Spina Bifida Child

(PL 104-204) Payments to any child of a Vietnam veteran for any disability resulting from the child's spina bifida.

24. Susan Walker Payments

Susan Walker Payments received from the class action settlement of Susan Walker vs. Bayer Corporation. These payments are to hemophiliacs who contracted the HIV virus from contaminated blood products.

25. 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 prorated over the period of time they are intended to cover. Student loans are not counted as income regardless of what the loan is used to pay for.

 

Example 3: 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 prorated over the four-month period from September through December at $62.50 in unearned income each month ($250/4 months = $62.50/month).

 

The following types of grants, scholarships, and fellowships are counted as income:

 

The following educational aid types are not counted as income:

 

Note: These income types will not be considered when determining if grants, scholarships, and fellowships exceed the cost of tuition, books and mandatory feeds.

 

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:

26. Stipends from the University of Wisconsin Upward Bound Program

Paid to high school students to encourage low income students to further their education.

27. Tax Refunds (Income and EITC )

28. Unpredictable Income

Income that is unpredictable, irregular, and has no appreciable effect on ongoing need.

29. Veterans Benefits

Do not count any veterans' benefits paid under any law, regulation, or administrative practice administered by the VA. The following amounts paid to veterans or their families are not countable:

 

Do not count VA allowances for unusual medical expenses that are received by a veteran, their surviving spouse, or dependent. Do not count aid and attendance and housebound allowances received by veterans, spouses of disabled veterans, and surviving spouses. For institutionalized and community waiver cases, do not count these allowances in eligibility and post-eligibility determinations, except for residents of the State Veterans Home at King.

30. Wartime Relocation of Citizens

(PL 100-383) restitution payments made to individual Japanese-Americans (or their survivors) and Aleuts who were interned or relocated during World War II.

31. Workforce Investment Act Unearned Income

Income paid to any adult or minor participating in the Workforce Investment Act, including:

32. W-2 Payments

Payments for W-2 Transition, Custodial Parent of an Infant, At Risk Pregnancy, Case Management Follow-up Plus (CMF+) and Community Service Jobs. Do not disregard payments for Trial Employment Match Program or Transform Milwaukee Jobs.

33. General Relief and Charity

34. SSI

SSI is not counted income for BadgerCare Plus. The following is a brief list of the potential codes for SSI.

35. Lump Sums Payments

Count lump sum payments (if the payment is otherwise a countable income type) in the month received. Lump sum payments are not counted outside of the month received.

36. Property Settlement

Money received as a property settlement is always an asset, regardless of whether it is paid in one payment or installments. It is never income.

37. Subsidized Guardianship Payments

Subsidized guardianship payments are not counted for BadgerCare Plus.  

38. Child Support

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 (see Process Help, Section 62.2.6 Entering Child Support Income on an Unearned Income Page).

 

Example 4: Morgan receives $500/month in family support for herself and her three children, Kyra (age 15), Kevin (age 9), and Katie (age 7). $500/4 people = $125/person. Disregard the amount allocated to the children ($125 x 3 children = $375). Count $125/month as income for Morgan.

39. Gifts

A gift is something a person receives, 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).

 

Do not count the value of a gift as income. This includes funds received through crowdfunding accounts, such as GoFundMe and Kickstarter. Funds received through a crowdfunding account would be considered a gift. These funds are not taxable and are not counted.

 

Example 5: Marco’s grandmother gave him $1,600 to help pay for his classes at a local technical college. Do not count this $1,600 as income.

40. Money from Another Person

Money 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. Money from another person is not a loan.

 

Do not count money from another person as income (see #41 for policies regarding money received from another person through an inheritance, bequest, or devise).

 

Example 6: Mimi receives $500 each month from her parents. She is not expected to pay back this money. The $500 is not counted as income for BadgerCare Plus eligibility.

 

Note: If money received from another person is 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. See Section 16.4.3.1 Income Sources for information on counting rental income.

 

Example 7: 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.

41. Inheritances, Bequests, and Devises

An inheritance is property received from someone who is deceased without a valid will. A bequest is personal property received from someone who is deceased, as directed by that decedent’s will. A devise is real property received from someone who is deceased, as directed by that decedent’s will.

 

Inheritances, bequests, and devises are generally not taxable, and, as a result, the value of the inheritance, bequest, or devise is generally not counted as income.

 

However, there are a few forms of inheritances or bequests that may be taxable. For example, distributions from an inherited pension are usually taxable to the beneficiary if the distributions would have been taxable if the deceased were still living.

 

In addition, income generated from an inheritance, bequest, or devise is usually taxable.

 

For inheritances, bequests, and devises that are taxable, the income should be counted only in the month it was received if it was received as a lump sum. If the payments are regular and predictable, they should be prorated (unless they are received monthly) and counted accordingly.

 

Example 8: Roger’s aunt passed away, and Roger inherited her rental house. It is worth $100,000. The house is occupied by tenants who pay $800/month in rent. At the time of the deed transfer, the tenants owed $3,200 in back rent. The value of the $100,000 property is not taxable, but if the tenants pay Roger the $3,200 in back rent, that income is taxable and would be counted in the month it was received. If they pay Roger $800/month on an ongoing basis, this income would also be taxable and would be counted based on rules regarding rental income.

 

Note: Income from the sale of inherited property is taxable if the property is sold for more than the fair market value on either the date of the decedent’s death or on the alternate valuation date. In Example 9, if Roger were to sell the rental house for $150,000, the $50,000 gain would be taxable. If Roger receives income from the sale in a lump sum, this income would only be counted in the month it was received.

 

Example 9: Darcy inherited her husband’s $150,000 life insurance policy. In most cases, life insurance policies are not taxable when they are inherited, so the $150,000 should not be counted as income. However, Darcy receives an ongoing interest payment of $1,200/month from the policy. This amount is taxable and would be counted as unearned income.

 

Income generated by an inheritance, bequest, or devise includes situations in which someone is the beneficiary of a trust or estate, and the trust or estate holds assets that are generating income. If the trust or estate distributes income to the beneficiary, the beneficiary is responsible for paying taxes on that income.

 

Example 10: 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.

42. Workers' Compensation

Do not count workers' compensation benefits. This includes workers' compensation benefits received as a settlement.

43. 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. Do not count this income.

44. Loans

If a BadgerCare Plus applicant or member receives a loan and it is available for current living expenses, do not count it as income, even if there is a repayment agreement.

45. Live-In Care Providers

Certain payments received by live-in care providers who provide care to someone enrolled in an HCBW program are not counted for BadgerCare Plus under MAGI budgeting rules. Live-in care providers are typically paid as employees, but some may be self-employed. They may be related to or not related to the person receiving care. In order to not be counted, payments to live-in care providers must meet all of the following criteria:

 

If the payments received by the live-in care provider meet all of these criteria, they are not counted when determining eligibility for BadgerCare Plus. If the payments received by the live-in care provider do not meet all of these criteria, the payments must be treated like other countable earnings or self-employment income.

46. ABLE Accounts

ABLE accounts are tax-sheltered money market savings accounts specifically designed for people with disabilities. Anyone may contribute to these accounts for the disabled beneficiary.

 

While Wisconsin does not offer residents a state-specific ABLE program, Wisconsin residents may open these accounts in any state where an ABLE program is offered. If an applicant or member has an ABLE account, treat the money in the account as follows:

 

ABLE account funds remaining after a member’s death are subject to estate recovery.

 

Note: If a third party contributes to someone else’s ABLE account and then later applies for long-term care Medicaid, the contributed funds may be considered divestment.

47. Income Allocated to a Community Spouse

When spouses are filing taxes separately and one spouse enrolled in Institutional Medicaid and allocates income to the spouse still living in the community, do not count this income when determining BadgerCare Plus eligibility for the spouse living in the community.

 

Example 11: Jenny resides in a nursing home and is enrolled in Institutional Medicaid. Her husband, Kevin, lives in the community and is applying for BadgerCare Plus. Jenny and Kevin file taxes separately. Jenny has income from Social Security and a pension. She allocates $1,100 of her monthly income to Kevin as the community spouse. Do not count this allocation when determining Kevin’s BadgerCare Plus eligibility.

 

 

This page last updated in Release Number: 19-02

Release Date: 09/10/2019

Effective Date: 09/10/2019