442-3        UNEARNED INCOME EXCLUSIONS

The following income exclusions apply only to unearned income.

442-3 A.   INCOME EXCLUSIONS AUTHORIZED BY FEDERAL LAWS

1. Volunteer Service Payments

Any assistance, except any payments (salary, wages, stipends or reimbursements) paid to volunteers under the Senior Corps and AmeriCorps programs of the Corporation for National and Community Service (CNCS) are exempt income.

Senior Corps includes Foster Grandparents, the Senior Companion Program, and RSVP (Retired and Senior Volunteer Corps).

AmeriCorps programs include AmeriCorps*State and National, AmeriCorps*Vista, and AmeriCorps*NCCC (National Civilian Community Corps).  

Volunteer status and participation in an exempt program must be verified.

2. Remuneration for out-of-Pocket expenses

Remuneration for out-of-pocket expenses to people who are volunteers in the Corps of Retired Executives (CORE ), or in the Active Corps of Executives ( ACE ), is excluded from income.

3. Certain assistance provided under the Older Americans Act

Except wages or salaries, any assistance provided under Title V of the Older American Act is excluded from income.  This includes MASST stipends, meals, job training, caregiver support, transportation and more. 

Wages or salaries paid under Title V of the Older Americans Act are counted as earned income.

4. Federal housing assistance

The value of any assistance paid with respect to a dwelling unit is excluded from income and resources if paid under the United States Housing Act of 1937, the National Housing Act, Section 101 of the Housing and Urban Development Act of 1965, or Title V of the Housing Act of 1949.

The federal government, through the Office of Housing and Urban Development (HUD ) and the Farmers Home Administration (FmHA ) provides many forms of housing assistance.  This assistance may include subsidized housing, loans for renovations, mortgage and investment insurance, guaranteed loans and mortgages, and loans for construction, improvement, or replacement of farm homes and other buildings.  This assistance may be provided directly by the federal government or through other entities such as local housing authorities and non-profit organizations.

Any housing assistance in which HUDOffice of Housing and Urban Development or FMHAFarmers Home Administration is involved is subject to this exclusion.  In Alaska, housing assistance which qualifies for this exclusion include:  housing assistance provided by the Alaska State Housing Authority (ASHA), Section 8 housing assistance, and housing assistance in rural areas provided by various Native housing authorities.

5. Federal relocation assistance payments

Relocation assistance provided under the Uniform Relocation Assistance and Real Property Acquisition Act of 1970 is excluded from income.

This exclusion applies to relocation assistance provided to persons displaced by any federal or federally assisted project.  Relocation assistance may be furnished directly by a project or through an agency, such as a housing authority, designated for the purpose of providing relocation assistance.

(Refer to section 442-3A(6) below for policy on the treatment of relocation assistance provided by a state or political subdivision for a project that does not have any federal involvement.)

Interest earned on unspent relocation assistance payments is not excluded from either income or resources.

Verification.  To be excluded from income under this provision the individual must submit evidence which shows that the payment is relocation assistance.  Acceptable evidence includes:

• a letter or check stub that indicates the reason for the payment; or

• any other document that indicates the reason for the payment; or

• a collateral contact with the federal project or agency that issued the relocation assistance   payment.

6. State or local relocation assistance payments

Relocation assistance provided by a state or local government for a project that does not have any federal involvement is excluded from income under Public Law 101-508.  This exclusion applies to relocation assistance provided to persons displaced by any state, local, or state-assisted or locally-assisted project

Interest earned on unspent relocation assistance payments is not excluded from either income or resources.

Verification.  To be excluded from income under this provision, evidence must be submitted which shows that the payment is relocation assistance.  Acceptable evidence includes:

• a letter or check stub that indicates the reason for the payment; or

• any other document that indicates the reason for the payment; or

• a collateral contact with the state or local agency that issued the relocation assistance payment.

7. Education Assistance

(a) Title IV Higher Education Act and Bureau of Indian Affairs Grants and Awards

The total amount of any grant, scholarship, or award issued under any program funded under the Title IV of the Higher Education Act or under a Bureau of Indian Affairs student assistance program is not counted as income in determining eligibility or benefit amount.

Payments that fit this category include:

• Pell Grants
• State Student Incentive Grants (SIG)
• Academic Achievement Incentive Scholarships
• Byrd Scholars
• Federal Supplemental Educational Opportunities Grants (FSEOG)
• Federal Educational Loans (Federal PLUS Loans, Perkins Loans, Stafford Loans, Ford Loans, etc.)
• Upward Bound
• Gear Up (Gaining Early Awareness and Readiness for Undergraduate Programs)
• LEAP (Leveraging Educational Assistance Partnership)
• SLEAP (Special Leveraging Educational Assistance Partnership)
• Work-Study Programs

Verify that the source of the education assistance is Title IV or BIABureau of Indian Affairs by viewing the individual’s award letter.  Contact the awarding institution if the award letter is not available or is unclear.

(b) Other Education Assistance

Education assistance that is not funded under Title IV of the Higher Education Act or the Bureau of Indian Affairs student assistance program funds is excluded as income if it is used or will be used for paying tuition, fees, or other necessary education expenses at any educational institution, including vocational, technical, and correspondence schools, and schools for people with disabilities.

Any portion of education assistance that will not be used or set aside for paying tuition, fees, or other necessary education expenses is countable unearned income.

(c) Budgeting Countable Education Income

1. Total all countable education assistance.  Do not add any other type of earned or unearned income unless it is received specifically because of the student's status and is intended to pay education-related expenses.
    
2. Subtract from the above the costs for tuition and fees charged by the school.
    
3. Subtract the costs for books, school supplies, and any special clothing, tools, or other expenses of the student that are related to the cost of attending school.
    
4. Subtract costs for childcare necessary for the student to attend school.
    
5. Subtract costs for transportation (actual costs, such as bus pass or parking fees, or business mileage rate permitted by the Internal Revenue Service.  Go to http://www.irs.gov/taxpros/article/0,,id=156624,00.html for current standard mileage rates.)
    
6. Count the remaining amount as income in the month the assistance is received.
    
7. Any amount of money retained after the month of receipt is evaluated as a resource under manual section 432-4K(2).

8. Alaska Native Claims Settlement Act (ANCSA ) payments

The Alaska Native Claims Settlement Act (ANCSA ) excludes the following items from the income of an Alaska Native, or from the income of a descendant of an Alaska Native:

(a) Alaska Native Fund distributions.

Distributions from the original Alaska Native Fund are excluded from income regardless of the amount distributed.

(b) Stock.  

Any stock issued or distributed by an ANCSAAlaska Native Claims Settlement Act corporation (including stock issued as a dividend or distribution on stock) is excluded from income.

(c) Partnership Interests.  

A partnership interest received from an ANCSAAlaska Native Claims Settlement Act corporation is excluded from income.  However, income received as a result of a partnership interest is treated as a cash distribution.  (See (f) below.)

(d) Land.  

Any land or any interest in land received from an ANCSAAlaska Native Claims Settlement Act corporation (including land received as a dividend or distribution on stock) is excluded from income.  This includes land or any interest in land inherited by a descendant.

(e) Payments from a settlement trust.  

Any interest in a settlement trust received from an ANCSAAlaska Native Claims Settlement Act corporation is excluded from resources.  Payments from a settlement trust are treated as countable income. If the payment is made as part of a cash distribution, the first $2,000 per individual per calendar year may be excluded under (f) below.
 

Note:

The 2017 Tax Cuts Jobs Act allowed Alaska Native Corporations to place assets in a settlement trust on effectively pre-tax basis.  Payments from the settlement trusts are treated the same as other cash payments from an Alaska Native Corporation.  See MS 442-3(A)(8)(f).

(f) Cash distributions.  

For the purpose of this exclusion, cash distributions are distributions that are made to a class of individuals, such as all shareholders, or all elders.  Cash distributions do not include cash payments that are made to individuals or households for a specific purpose such as wages, a door prize, or a general assistance payment from the corporation.

Cash distributions (including cash dividends on stock) are excluded from income to the extent that the distributions do not exceed $2,000 per individual per calendar year.  When an individual receives more than $2,000 from all ANCSAAlaska Native Claims Settlement Act corporations in a single calendar year, any amounts exceeding $2,000 are considered countable income in the month of receipt.

Income received by an individual applicant or recipient asAlaska Statute a result of his or her own investment or deposit of ANCSAAlaska Native Claims Settlement Act payments is not excluded from income.

9. Other exclusions of payments to Indians

For APAAdult Public Assistance and SSISupplemental Security Income purposes, various federal statutes provide for the exclusion of certain payments made to members of Indian tribes and groups.  Some statutes pertain to specific tribes or Indian groups while others apply to certain types of funds.  The following types of payments made to Indian tribes and groups are excluded from both income and resources:

1. Per capita distribution payments by the Blackfeet and Gros Ventre tribal governments to members, which resulted from judgment funds to tribes, are excluded under Public Law 92-254.
    
2. Per capita distribution payments by the Secretary of the Interior or by the Indian tribe itself to members of Indian tribes who were due judgment funds are excluded under Public law 93-134.  This does not include payments of funds distributed or held in trust according to public laws enacted before October 19, 1973.
    
3. Receipts derived from certain trust lands and distributed to members of designated Indian tribes are excluded under Public Law 94-114.  These lands, mineral rights, and receipts are excluded from income and resources, unless they were subject to the Mineral Leasing Act of 1920 and distributed before October 17, 1975.

These Indian trust lands are all located in the lower 48 states in the states of Idaho, Michigan, Montana, New Mexico, Oklahoma, North Dakota, South Dakota, and Wisconsin.  A list of lands conveyed to Indian tribes under Public Law 94-114 is maintained at DPA Division of Public AssistanceCentral Office.  If a case worker becomes aware of funds that may be derived from this source, he or she must contact the APAAdult Public Assistance Policy Specialist for specific directions on the treatment of these funds.

4. Per capita payments made to, or held in trust for, members of the Grand River Band of Ottowa Indians are excluded under Public Law 94-540.
    
5. Judgment funds, including interest and investment income which accrued on Indian judgment funds while held in trust, and initial purchases made with distributed judgment funds, are excluded under Public Law 97-458.
    
6. Per capita distributions of funds held in trust by the Secretary of the Interior to members of an Indian Tribe are excluded under Public Law 98-64.  These per capita payments may be distributed by the Secretary of the Interior or by the tribe itself.  In Alaska, distributions of this type have been made by the Metlakatla Indian Community.
    
7. All money and lands transferred to the members of the Puyallup Tribes under the Puyallup Tribe of Indians Settlement Act of 1989 are excluded under Public Law 101-41.

10. World War II restitution payments

Any restitution payments made by the U.S. Government to individual Japanese-Americans and to Aleuts (or, if deceased, payments made to their survivors) who were interned or relocated during World War II are excluded from income under Public Law 100-383.  Qualifying Japanese-Americans are eligible for a $20,000 payment.  Qualifying Aleut-Americans are eligible for a $12,000 payment.

Restitution payments paid to individual Japanese-Canadians who were interned or relocated during World War II by the Canadian Government are also excluded from income.

This income exclusion also applies to any funds received as a result of the investment or deposit of a restitution payment to eligible Aleuts.

However, any payments subsequently received from a trust established by the Secretary of the Interior and appropriated for Aleut residents are counted as income.  The trustees may use these trust funds for the benefit of the elderly, disabled, seriously ill, students in need of scholarships, the preservation of Aleut cultural heritage and historical records, the improvement of community centers in affected Aleut villages and other purposes to improve conditions of Aleut life.

Verification.   

DPA Central Office maintains a list of individuals who have received Aleut restitution payments.  The case worker may contact the APAAdult Public Assistance Policy Specialist to verify an individual's receipt of Aleut restitution payments.  Documents in the client's possession may be used to verify Japanese-American or Japanese-Canadian payments.

11. Agent Orange settlement payments

Agent Orange settlement payments are excluded from income under Public Laws 101-201 and 101-239.  Agent Orange settlement payments began in March 1989 and ended in 1994.  Qualifying veterans  received at least one payment a year for the life of the program.  Qualifying survivors of deceased veterans received a single lump sum payment.  VA disability payments for disease attributed to Agent Orange exposure are not exempt.  These payments are treated the same as other VA disability payments.  

This income exclusion also applies to any funds received as a result of the investment or deposit of Agent Orange settlement payments.

Verification.  

Documents in an individual's possession shall be used to verify whether a payment is an Agent Orange settlement payment.  If the individual has no documentation or there is reason to question the situation, it is the individual's responsibility to provide verification from the provider (Aetna Insurance Company).

12. Gifts of domestic travel tickets

The value of a domestic travel ticket received by an individual or spouse is excluded from income under Public Law 101-239 if the ticket is received as a gift and not converted to cash.  Domestic travel is travel among the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands.  The travel ticket may be for transportation by air, land, or sea.

If an excluded ticket is converted to cash, it becomes unearned income in the month it is converted.

Gifts of non-domestic travel tickets, such as airline tickets to Japan or the Philippines, which can be converted to cash, are counted as income in the month they are received.

13. Victims' compensation payments

Any payment received from a fund established by a State to aid victims of crime is excluded from income.

Interest earned from the deposit or investment of these funds is not excluded as income.

14. Payments to Victims of Nazi Persecution

Payments received from any source by individuals because of their status as victims of Nazi persecution are excluded from income.

Interest earned on unspent payments is also excluded from income.

15. Energy Employees Occupational Illness Compensation Payments

The Energy Employees Occupational Illness Compensation Act provides compensation to individuals who develop illnesses as a result of employment at certain federally owned facilities in which radioactive materials were used. These payments are exempt income.

16. Radiation Exposure Compensation Trust Fund

Fallout emitted during the U.S. Government’s atmospheric nuclear testing in Nevada during the 1950s and during a brief period in 1962 exposed some individuals to doses of radiation that put their health at risk.  In addition, some individuals employed in uranium mines from 1947 through 1971 were exposed to large doses of radiation.

Public Law 101-426 created the Radiation Exposure Compensation Trust Fund and authorizes the Department of Justice to make compensation payments to individuals (or their survivors) who were found to have contracted certain diseases after exposure.  The payments will be made as a one-time lump sum.  Generally, the exposure occurred in parts of Arizona, Colorado, Nevada, New Mexico, Utah, and Wyoming.

Payments from the Radiation Exposure Compensation Fund are excluded from income.  Interest earned on unspent Radiation Exposure Compensation Fund payments are also excluded from income.

17. Individual Development Account (IDA )

An Individual Development Account  (IDA ) is a special bank account that helps an individual save for his or her education, the purchase of a first home, or to start a business.  An individual contributes money from his or her earnings to an IDAIndividual Development Account .  These contributions are then matched with money from another source.  The matching money helps the individual reach his or her goal sooner.

Any earnings that an individual contributes to a TANFTemporary Assistance to Needy Families (Federal) -funded IDAIndividual Development Account or Demonstration Project IDAIndividual Development Account are deducted from his or her wages in determining countable earned income.  In addition, the individual’s contributions, as well as any matching funds, that are deposited into a TANFTemporary Assistance to Needy Families (Federal) -funded IDAIndividual Development Account or Demonstration Project IDAIndividual Development Account are excluded from income.  Any interest earned on these funds is also excluded from income.

TANFTemporary Assistance to Needy Families (Federal) -funded IDAIndividual Development Account .  The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 authorized states to use money from their TANFTemporary Assistance to Needy Families (Federal) grant to carry out a program to fund IDAs .

Demonstration Project IDAIndividual Development Account .  The Assets for Independence Act (enacted on January 27, 1998) created a Federal Demonstration Project to test the effectiveness of IDAs in improving the lives of participating low-income persons.  This Act provides for Demonstration Project monies to carry out a program to fund IDAs .

18. Payments to Persons Captured and Interned by North Vietnam

The Department of Defense provides payments to certain persons who were captured and interned by North Vietnam.  If the individual is deceased, payment may be made to a surviving spouse or, if none, to surviving children (including biological and adoptive children) in equal shares.  The amount payable is a one-time payment of up to $50,000.  These payments are excluded from income.  Interest earned on unspent payments is also excluded from income.

19. Ricky Ray Hemophilia Relief Fund

The Ricky Ray Hemophilia Relief Fund Act of 1998, Public Law 105-369, provides for a single payment of $100,000 to:

• Individuals with a blood-clotting disorder who may have contracted an HIVHuman Immunodeficiency Virus infection from a blood transfusion;
   
• Current and former spouses of these individuals who also contracted an HIVHuman Immunodeficiency Virus infection;
   
• Children of these individuals who also contracted an HIVHuman Immunodeficiency Virus infection; and
   
• Surviving spouses, children, and parents of the above.

Payments from the Ricky Ray Hemophilia Relief Fund are excluded from income.  Interest earned on unspent payments is also excluded from income.

20. Vietnam Veterans’ Children with Spina Bifida

A 1996 study by the National Academy of Sciences found evidence associating parental exposure to herbicides in Vietnam with increased risk of spina bifida in their children.  Spina bifida is a congenital birth defect characterized by defective closure of the bones surrounding the spinal cord.  

Public law 104-204 authorizes the Department of Veterans Affairs (VADepartment of Veterans Affairs) to provide benefits, including a monthly monetary allowance, to certain Vietnam veterans’ children who suffer from spina bifida.    VADepartment of Veterans Affairs payments made to or on behalf of such children are excluded from income.  Interest earned on unspent payments is also excluded from income.

442-3 B.   CERTAIN ASSISTANCE BASED ON NEED

Needs-based assistance, as specified in this section, is excluded from countable income.  Excluded needs-based assistance is assistance that is:

• Funded wholly by a state, political subdivision of a state, or an Indian tribe; and
   
• Provided under a program that uses income as a factor in determining eligibility.

In Alaska, examples of programs that provide needs-based assistance are General Relief Assistance (GRAGeneral Relief Assistance) and the Alaska Senior Benefits Program.

Needs-based assistance is not the same as needs-based income.  Refer to section 441-2D for the policy on needs-based income.

442-3 C.   REFUNDS OF TAX PAID ON REAL PROPERTY OR FOOD

Any amount received from any public agency as a return or refund of taxes paid on real property or on food purchased is excluded from income.

Verification.  

The client's statement that a refund of this nature has been received is acceptable, unless there is reason to question the situation.  For example, if the program making the refund is unknown, or the amount of the refund appears inordinate, the case worker may require the client to provide proof from the source of the payment.

442-3 D.   DISASTER ASSISTANCE

Any assistance received under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (formerly the Disaster Relief and Emergency Assistance Act of 1974), or some other federal statute, because of a presidentially declared major disaster is excluded from income.

Assistance provided to victims of a presidentially declared disaster includes assistance from:  federal programs or agencies; joint federal and state programs; state or local government programs; and private organizations such as the Red Cross.

Interest earned by funds retained from federal disaster assistance is also excluded from income.

Verification.  

Acceptable proof of federal disaster assistance is documentation or a collateral contact with the source of the payment which specifies that the assistance is provided under federal statute because of a presidential declared disaster.

442-3 E.   DIVIDENDS AND INTEREST

Dividends and interest are returns on capital investments such as stocks, bonds, or savings accounts.  They are either counted or excluded as unearned income at the earlier of the following:  the month they are received by the individual, the month they are set aside for the individual’s use; or the month they are credited to an individual’s account and are available for use.

• Dividends and interest earned on countable resources are excluded from income.
   
• Dividends and interest earned on excluded resources may be counted or excluded from income depending on the character of the excluded resource.  See the manual section related to a particular resource or income exclusion for further guidance on the treatment of dividends and interest earned on excluded resources

Note:  

Dividends or interest may be countable resources if retained into the following month.

442-3 F.   FOSTER CARE PAYMENTS AND ADOPTION PAYMENTS

A payment made to a foster or adoptive parent by a public or private non-profit agency for the care of a child that is living in the home of the foster or adoptive parent is unearned income to the child.  These payments are not income to the foster or adoptive parent.

442-3 G.   INCREASE IN VALUE OF BURIAL FUNDS

Any increase in the value of an excluded burial fund, or the excluded portion of a burial fund, because of interest accumulation or appreciation is excluded as income.  (Refer to section 432-2D.)

442-3 H.   HOME ENERGY ASSISTANCE

Home energy assistance provided to an individual by a private non-profit agency or by an entity which is certified by the state or federal government is excluded from income if the assistance was based on need.  Energy assistance is most often provided in the form of a vendor payment, but may also be provided in cash.

Verification.  In Alaska, the Heating Assistance program administered by the State and the energy assistance programs administered by various Native organizations qualify for this exclusion.  Other sources of home energy assistance may be excluded if verification is provided that the assistance is certified by a state or the federal government and that the assistance is based on need.

442-3 I.     CHILD SUPPORT PAYMENTS FROM AN ABSENT PARENT

Child support payments may be made voluntarily or under a court or administrative order.  One-third of any child support payment received from an absent (noncustodial) parent or stepparent by or on behalf of a child who is eligible for SSISupplemental Security Income or APAAdult Public Assistance is excluded from the income of the child.  The remaining two-thirds of the child support payment is income to the child, not to the individual who may receive the payment for the child.  This exclusion is not allowed to children who are not eligible for SSISupplemental Security Income or APAAdult Public Assistance .

For purposes of this section, a child is an individual who is neither married nor the head of a household, is under the age of 22, and is a student regularly attending school or college or training that is designed to prepare him or her for a paying job.  (Refer to section 442-2D for the policy on regular school attendance.)

Verification.  

The amount and frequency of child support payments may be verified by the use of:  court records; records of an agency through which the payments are made; documents in the individual's possession; or by contact with the source of the payment.  If proof of child support payments cannot be obtained in any other way, a signed statement from the client which specifies the amount and date received may be used.

442-3 J.   Deposits made to a bank account on behalf of another person

Money deposited into an individual’s bank account is not counted as income if the individual disburses or intends to disburse the money on behalf of another party.  The individual is acting as the other party’s “agent”.