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16.5 Other Income

1. Unemployment Compensation

2. Spousal Support

3. Family Support

4. Social Security Benefits

5. Income From a Bequest, Devise, or Inheritance

6. Income Generated From Property Given to a Trust

7. Land Contract

8. Loans

9. Profit Sharing

10. Retirement Benefits

11. Sick Benefits

12. Trusts

13. Gambling Winnings

14. Royalties

15. Capital and Ordinary Gains and Losses

16. Student Financial Aids

17. Jury Duty Payments

18. Interest and Dividend Income

19. Lump Sums Payments

20.  Reimbursements for Normal Household Living Expenses Are Counted as Income

21.  Tribal Per Capita Payments from Gaming Revenue

 

Other income is any payment that a member receives from sources other than employment that are counted as taxable income. Count the gross payment in the person’s income total.

1. Unemployment Compensation

Count unemployment compensation income, including the amount of unemployment compensation that is intercepted to collect child support.

2. Spousal Support

Spousal support payments are countable income unless they are non-taxable.  If non-taxable, these payments are not counted.

3. Family Support

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 or spousal support unless the divorce or separation order by the court designates the spousal support payments as being non-taxable.  

4. Social Security Benefits

Although Social Security benefits are not taxable, they must be counted as unearned income. Count Social Security benefits as unearned income in the month received.

 

The following is a list of some of the codes that should be used in coding Social Security income types:

 

Note: Social Security benefits are not considered when determining if a person is “expected to be required” to file a tax return for the current year (see Section 2.8 MAGI Income Counting Rules).

5. Income From a Bequest, Devise, or Inheritance

Count income from a bequest, devise, or inheritance in the month it is received.

6. Income Generated From Property Given to a Trust

Count income generated from property given to a trust if the income is paid, credited, or distributed to the person.

 

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 the interest as unearned income, but do not count the value of the land or the trust.

7. Land Contract

Count only the portion of monthly payments received that are considered interest from a land contract as unearned income. Deduct from the gross countable interest any expenses the person is required to pay by the terms of the contract. Do not count the principal as income (because it is the conversion of one asset form to another).   

 

If the income is received monthly, budget it monthly. 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 $5000 payment in March and another $5000 payment in September. Ten percent of that payment is interest.

 

When Bob applies for BadgerCare Plus in February, prorate the interest portion of the land contract payments Bob receives after he becomes eligible. In March, when Bob receives a $5000 land contract payment, divide the total countable income ($5000 multiplied by 10 percent equals $500 of countable interest income) by the frequency of the payments (six months) to get the budgeted income amount of $83.33 per month. Begin budgeting this amount in March.

8. Loans

If a BadgerCare Plus applicant or member makes a loan (except a land contract), count only the portion of the repayment to that applicant or member that is interest. Count the interest as income in the month received.

9. 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.

10. 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 IRA s and plans for self-employed individuals, sometimes referred to as KEOGH plans.

 

Count the taxable portion of any retirement distribution as income.

11. Sick Benefits

Count sick benefits received from an insurance policy if the person’s employer contributed or paid for the benefit. Do not count the following:

12. 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:

 

All regular payments, including dividends and interest, made under the terms of the trust from a trust to the beneficiary are unearned income to the beneficiary. Dividends and interest income are counted even if they are tax exempt.  

13. Gambling Winnings

Count gambling winnings that are regular and predictable as income. Gambling losses cannot be used to offset other types of income.

14. Royalties

See Section 16.4.3 Self-Employment Income.

15. Capital and Ordinary Gains and Losses

Capital gains are profits from the sale of assets as bonds or real estate. If personal capital gains are regular and predictable, count as unearned income. Personal capital losses can be used to offset the person’s other income types. In situations where a person is planning to file a joint tax return with his or her spouse, personal capital losses may offset the spouse’s income.

16. 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.

 

Types of grants, scholarships, and fellowships counted as income include the following:

 

The following expense types can be used to offset income from grants, scholarships, fellowships, and other financial aid:

 

The following expense types are not allowed to offset income from grants, scholarships, or other financial aid:

 

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 educational aid types are not counted as income and cannot be considered when determining if grants, scholarships, and fellowships exceed the cost of tuition, books, and mandatory fees:

 

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.

17. Jury Duty Payments

Count all jury duty payments as earned income for the month in which they are received if the payments are not turned over to the person’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.

18. Interest and Dividend Income

Interest and dividend income is counted as unearned income.

19. 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 the month received.

20.  Reimbursements for Normal Household Living Expenses Are Counted as Income

Examples of reimbursements that are counted as income:

 

For examples of reimbursements that are not counted as income, see Section 16.2 Income Types Not Counted #19 Reimbursements.

21.  Tribal Per Capita Payments from Gaming Revenue

All of the income from Tribal Per Capita payments from gaming revenue is counted income.

 

 

This page last updated in Release Number: 19-02

Release Date: 09/10/2019

Effective Date: 09/10/2019