440-3 ITEMS THAT ARE NOT INCOME
Certain items are not income because an individual cannot use them to get food, clothing, or shelter. Such items are not subject to income exclusions. However, an item that is not income in the month of receipt is subject to evaluation as a resource the month after the month of receipt. The following items are not income:
440-3 A. THE VALUE OF IN-KIND SUPPORT AND MAINTENANCE
Unlike the SSI program, the APA program does not count the value of any support and maintenance that an individual or couple receives in-kind. In-kind support and maintenance is any item form of shelter (room, rent, mortgage payments, real property taxes, heating fuel, gas electricity, water, sewer, garbage) received by an individual or couple.
In-kind support and maintenance is considered only in the determination of whether an APA applicant or recipient lives "independently" or "in another's household". (Refer to section 450 for the policy on living arrangements)
440-3 B. MEDICAL OR SOCIAL SERVICES, AND CASH RECEIVED FROM A PUBLIC OR PRIVATE ORGANIZATION IN CONJUNCTION WITH SUCH SERVICES
Medical services. Medical services are services which are directed toward the treatment of a medical condition and which are performed, directed, or supervised by a state licensed health care professional. Medical services also include any item received as part of such medical treatment, including food and shelter provided during a medical confinement, prescription drugs, eyeglasses, and prosthetic devices.
Social services. A social service is any service which is intended to help a handicapped or socially disadvantaged individual to function in society on a level comparable to that of an individual who does not have such a handicap or disadvantage.
2. Medical and social services
Any medical and social service provided by a governmental, private organization, or by private individual is not income.
3. Cash received for medical or social services that is not income
a. Cash provided by a public organization.
Any cash provided by a governmental medical and social services program is not income. A cash payment made to an individual by the Division of Vocational Rehabilitation is not income if the payment is made as part of a vocational rehabilitation program. Other examples of cash received in conjunction with medical or social services include: One-Time refugee resettlement payments, VA aid and attendance and housebound allowances, VA clothing allowances, and VA payment adjustments for unusual medical expenses. (Refer to section 441-2C (4,5, and 6) for an explanation of these VA benefits. Refer To Administrative Procedures manual section 128-4 for more information about Refugee Assistance.)
b. Cash provided by a private organization.
Cash provided by a nongovernmental organization is not income when the cash is paid for a medical or social service already received by the individual and approved by the organization, or the payment is restricted to the future purchase of a medical or social service. Examples of private organizations which provide cash to pay for medical or social services include: American Red Cross, Salvation Army, St. Vincent de Paul, various church organizations, and private profit and non-profit organizations.
4. Cash received for medical or social services that is income
a. Cash provided by a private individual.
Cash provided by a private individual for medical or social services directly to an applicant or recipient is considered a gift and is counted as unearned income. Direct payments to providers are not income.
b. Flat rate benefit payments from an insurance policy.
Cash from an insurance policy which pays a flat rate benefit to the recipient without regard to the actual charges or expenses incurred is income. Examples of these types of insurance policies are per diem hospitalization or disability insurance, or cancer or dismemberment policies.
a. Governmental medical and social services program.
If the source of the cash payment is questionable, documents in the individual's possession (such as a program identification card, notice, or award letter) may be used to verify that the source of a cash payment is a governmental medical or social service program. In the absence of such proof, a collateral contact with the source of the payment may be used.
b. Cash provided by a private organization for medical or social services.
Receipt of cash from a private organization for medical or social services must be verified. Documents in the individual's possession may be used to verify that the cash is provided either for a medical or social service already received by the individual, or that the use of the payment is restricted to the future purchase of a medical or social service. In the absence of such proof, a collateral contact with the source of the payment may be used.
440-3 C. CONVERSION OR SALE OF A RESOURCE
Cash or property received from the sale, exchange, or replacement of a resource is not income but is a resource that has changed its form. This includes any cash or in-kind item that is provided to replace or repair a resource that has been lost, stolen, or damaged. It is important to note that the conversion or sale of a resource may change the character of a resource; an excluded resource may become a countable resource.
Verification.
If the amount of cash or the value of property retained from the conversion or sale of a resource is questionable, the APA applicant or recipient may be required to provide proof of the amount of retained cash or value of the new property. Unless otherwise excluded, any funds or property retained from the conversion or sale of a resource will become a countable resource the month following the conversion or sale.
Example:
In April, Mr. Wallace reports that he sold his 1984 Ford Mustang for $1500 on March 25. The money he received from the sale is not income but a resource which has been converted from one form (an excluded automobile) to another form (cash). Mr. Wallace indicates that he spent $500 on living expenses in March and deposited the remaining $1000 into his checking account.
The caseworker has no reason to question the amount of cash received from the sale, since the amount Mr. Wallace received is consistent with normal used car values in the area. Because the retained funds are considered to be a countable resource the month following the sale, the caseworker requests proof of the balance in Mr. Wallace's checking account as of the first moment of April.
When an individual receives a rebate, refund, reimbursement, or other return of money that he or she has already paid, the returned money is not income.
The key idea in applying this policy is that the money returned is the individual's own money. Some "rebates" do not fit this category. For example, if a cooperative operating as a jointly-owned business pays a "rebate" as a return on a member's investment, the money is unearned income similar to a dividend.
Verification.
Unless there is reason to question the situation, accept the individual's statement that the a rebate or refund of money is a refund of money already paid and do not count it as income. In questionable situations, make copies of any documents in the individual's possession for the case file, and contact the source of the payment to verify that the payment is a return of money already paid.
440-3 E. FEDERAL INCOME TAX RETURNS
Any federal income tax return received after December 31, 2009 is excluded from income in the month of receipt.
Verification.
Client statement or a copy of an individual's income tax return is acceptable proof of the amount of a tax refund.
440-3 F. CREDIT LIFE OR CREDIT DISABILITY INSURANCE PAYMENTS
Credit life and credit disability insurance policies are issued to or on behalf of borrowers to cover payments on loans, mortgages, etc. in the event of death or disability. These policies issue insurance payments directly to loan or mortgage companies, etc. The payments are not available to the individual.
A payment made under a credit life or credit disability insurance policy for an individual is not income. Food, clothing, or shelter received as the result of a credit life or credit disability payment is not income.
Verification.
A copy of the insurance contract or other documentation from the insurance company may be used to verify that the insurance payments are not available to the individual. If such evidence is not available, a collateral contact with the insurance company is acceptable.
Money that a person borrows is not income because of the obligation to repay the loan. This includes any type of educational loan, including an Alaska State Student Loan, as well any other type of private or commercial loan.
Money that a person loans and then receives back as a repayment is not income to the extent that the repayment represents repayment of the principal of the loan. However, the portion of any repayment that represents interest on the principal is income.
A loan must be bona fide. A bona fide loan is a debt that the borrower has an obligation to repay and expresses his or her intention to repay. If a loan is not bona fide, there is no obligation to repay and the amount received is a gift. A gift is considered as unearned income in the month received.
Verification.
To be ignored as income, the bona fide nature of a loan must be verified. Commercial or educational loans may be verified by viewing a copy of the loan agreement or a document identifying the payment as a loan.
For personal loans, the bona fide nature of the loan must be verified by both parties. At minimum, the lender must acknowledge that an obligation to repay the loan exists, and the borrower must acknowledge that he or she intends to repay the loan (with or without interest).
440-3 H. BILLS PAID BY A THIRD PARTY (VENDOR PAYMENTS)
Payment of an individual's bills by a third party (including Medicare premiums or other medical insurance premiums) directly to the supplier by a third party is not income.
440-3 I. REPLACEMENT OF INCOME ALREADY RECEIVED
The replacement of lost, stolen, or destroyed income already received is not income if the income being replaced was already used to determine the amount of an APA or SSI payment.
Verification.
Written documentation from the person, organization, or agency which issued a replacement payment is used as proof that the payment is a replacement. In the absence of such documentation, a collateral contact with the person, organization, or agency is acceptable.
Example:
Mr. Akers, an APA recipient, reports that he received a replacement SSI check after his regular SSI check was damaged in the mail. The caseworker confirms that the check is a replacement by viewing a letter that SSI sent to Mr. Akers. The replacement SSI check is not income to Mr. Akers because the damaged SSI check was already used to determine the amount of his monthly APA payment.
440-3 J. RETURN OF ERRONEOUS PAYMENTS
An erroneous payment is not income when the individual is aware that he or she is not due the money and returns the check uncashed or otherwise refunds all of the erroneously received money by the end of the month following the month the erroneous payment was received. If the erroneous payment is not returned in a timely manner, it is considered as income in the month of receipt, unless there is good cause for a delay in the return of the erroneous payment.
Verification.
The return of an erroneous payment must be verified with the agency or organization that issued the payment. Documentation from the issuing agency or organization may be used to verify the return of an erroneous payment. In the absence of such documentation, a collateral contact with the agency or organization is acceptable.
Example:
During the latter part of January, Mr. Bob Brown received a $290 check from the Department of Veterans Affairs ( VA ) for the month of January along with a letter explaining that his regular January payment had been delayed due to a computer error. In August, Mr. Brown receives a second VA pension check for January. Realizing the second check is a duplicate payment, he returns the second check to the VA before the end of September. Upon confirming the return of the duplicate payment with the VA , the caseworker determines that the duplicate payment Mr. Brown received in August is not income for APA purposes.
440-3 K. WEATHERIZATION ASSISTANCE
Weatherization assistance from any source that is in the form of in-kind items such as insulation, storm doors, and storm windows is not income.
440-3 L. WAGE-RELATED PAYMENTS
Employers make various payments for their employees that are not earnings and are not available to meet the employee's needs for food, clothing, or shelter. The following wage-related payments are examples of payments that are not income unless they are deducted from the employee's wages:
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