Income Deductions

Earned Income Deduction

Deduct the 20% earned income deduction from the household's total countable gross earned income.

General Income Disregards

The following deductions are applied to the remaining total income (household's net earned plus household's total countable unearned income).

• Standard Deduction
  • Allow a standard deduction for the applicable household size(Eligible members only).

• Excess Medical Deduction
  • Medical expense is incurred by household member who is elderly (60 or over) or disabled AND
  • Household member is an Eligible or Disqualified Household Member AND
  • Medical Expense is an allowable expense AND
  • Allow only the part of the expense that is not reimbursed AND
  • Deduct the portion of allowable monthly medical expenses that exceeds $35 per household.
• Allowable Medical Expenses
  • Medical and dental care including psychotherapy and rehabilitation services provided by a licensed practitioner authorized by Stat law or other qualified health professional OR
  • Hospitalization or outpatient treatment, nursing care, and nursing home care including payments by the household for an individual who has a household member immediately prior to entering a hospital or nursing home provided by the State OR
  • Prescription drugs when prescribed by a licensed practitioner authorized under State law and other over-counter medication (including insulin) when approved by a licensed practitioner or other qualified health professional; in addition, costs of medical supplies, sick-room equipment (including rental) or other prescribed equipment OR
  • Health and hospitalization insurance policy premiums OR
  • Medicare premiums related to coverage under Title XVIII of the Social Security Act; any cost-sharing or spend down expenses incurred by Medicaid recipients OR
  • Dentures, hearing aids, and prosthetics OR
  • Securing and maintaining a seeing eye or hearing dog including the cost of dog food and veterinarian bills OR
  • Eye glasses prescribed by a physician skilled in eye disease or by an optometrist OR
  • Reasonable cost of transportation and lodging to obtain medical treatment or services OR
  • Maintaining an attendant, homemaker, home health aide, or child care services, housekeeper, necessary due to age, infirmity, or illness. OR
• Dependent Care Deduction

  Deduct the monthly amount paid for the care of each child or other dependent in the household up to the maximum defined in the Dependent Care Chart if:

  • Child or other dependent is an eligible member of the assistance unit AND
  • The dependent care provider is not a household member AND
  • Actual cost of child care is not reimbursed AND
  • The care is necessary for employment OR
  • To attend training or pursue education which will help the individual prepare for employment AND
  • Apply pro-rating procedures if household member incurring the expense is an ineligible household member.
• Child Support Deduction
  • Deduct legally obligated child support payments paid by a household member to or for a non household member, including payments made to a third party on behalf of the non household member(vendor payments) AND
  • Apply pro-rating procedures if household member incurring the expense is an ineligible household member.
• Homeless Shelter Deduction
  • Households in which all members are homeless but are not receiving free shelter are entitled to the standard shelter allowance AND
  • Allow actual shelter expenses, instead of the homeless shelter allowance, if the actual shelter costs would result in a higher deduction under the excess shelter deduction calculation.
• Excess Shelter Deduction
  • The excess shelter deduction is the monthly allowable shelter costs in excess of 50% of the Assistance Unit's income after the earned income, standard, medical, dependent care and child support deductions have been subtracted AND
  • Do not allow more than the Maximum Excess Shelter Deduction Amount unless Elderly and Disabled Exception applies AND
  • Apply pro-rating procedures if household member incurring the expense is an ineligible household member AND
  • Apply Treatment of Shelter Expenses for Non-Household Members if any household member incurring the expense is a non-household member.
  • Elderly Disabled Exception
    • Allow the full amount of the excess shelter expense as a deduction when at least one individual in the assistance unit is age 60 or over and or disabled.
  • Allowable Shelter Expenses
    • Continuing charges for the shelter occupied by the household, including rent, mortgage, condo and association fees, or other continuing charges leading to the ownership of the shelter such as loan repayments for the purchase of a mobile home, including interest on such payments OR
    • Property taxes, State and local assessments, an insurance on the structure itself, but not separate costs for insuring furniture or personal belongings OR
    • Costs of repairing a home that was substantially damaged or destroyed due to a natural disaster, such as a fire or flood, as long as the expenses will not be reimbursed OR
    • Allowable Utility Costs OR
• Calculating Utility Costs

  The following steps are followed to determine Utility Costs included in determining Shelter Deduction:

  • Determine Eligibility for the Standard Utility Allowance (SUA).
  • If eligible for SUA and State mandates the use of SUA's, use SUA.
  • If eligible for SUA and it is not mandatory the use of SUA's, use higher of SUA or actual utility costs.
  • If eligible for SUA and State mandates the use of Standard Utility Allowances uses the Standard Utility Allowance(SUA) otherwise use higher of SUA or actual utility costs.
  • If eligible for SUA, determine actual utility costs.
  • Use higher of SUA or actual utility costs when determining Shelter Deduction.
  • If not eligible for the SUA, determine eligibility for the Limited Utility Allowance(LUA).
  • If eligible for LUA and State mandates the use of SUA's, use LUA.
  • If eligible for LUA and it is not mandatory to use SUA's, use higher of LUA or actual utility costs.
  • If not eligible for LUA, determine eligibility for the Telephone Allowance.
  • If eligible for Telephone Allowance and State mandates the use of SUA's use Telephone Allowance.
  • If eligible for Telephone Allowance and it is not mandatory to use SUA's, use higher of Telephone Allowance or actual utility costs.
  • If not eligible for Telephone Allowance, no utility expenses are used when determining the Shelter Deduction.
• Standard Utility Allowance (SUA)

  To be eligible for the Standard Utility Allowances(SUA) the household must:

  • Incur a heating or cooling expense which is billed separate from rent or mortgage payments OR
  • Receive direct or indirect assistance under the Low Income Home Energy Assistance Act of 1981 (LIHEAA) OR
  • Households that receive direct or indirect energy assistance that is excluded from income consideration (other than that provided under the LIHEAA) are entitled to a standard that includes heating or cooling only if the amount of the expense exceeds the amount of the assistance OR
  • Households that receive direct or indirect energy assistance that is counted as income and incur a heating or cooling expense are entitled to use a standard that includes heating or cooling costs.
• Limited Utility Allowance (LUA)

  To be eligible for the LUA the household must incur 2 or more of the following non-heating/non-cooling utility expenses:

  • Electricity not used for heating or cooling
  • Cooking fuel
  • Telephone
  • Water
  • Sewage
  • Well and septic tank installation and maintenance
  • Garage or trash collection
• Telephone Allowance
  • If the only utility expense the household has is the telephone, including a mobile phone, the household is eligible for the telephone allowance.
• Allowable Utility Expenses
  • Heating and Cooling Expenses OR
  • Electricity OR
  • Cooking fuel OR
  • Water and sewage OR
  • Well and septic tank installation and maintenance OR
  • Garage or trash collection fees OR
  • All service fees required to provide for one telephone, including but not limited to, basic service fees, wire maintenance fees, subscriber line charges, relay center surcharges, 911 fees, and taxes OR
  • Fees charged by the utility provider for utility installation, excluding deposits.

Pro-Rated Expenses

• Pro-Rated Child Support Expenses
  • Divide the allowable child support expense, paid by an ineligible household member equally among all the household members including the ineligible household members AND
  • Count all but the ineligible members' pro-rata share as a child support deduction for the remaining household members.

• Pro-Rated Dependent Care Expenses
  • Divide the allowable dependent care paid by an ineligible household member equally among all the household members including the ineligible household members AND
  • Count all but the ineligible members' pro-rata share as a dependent care for the remaining household members.

• Pro-Rated Shelter Expenses using actual utility costs or no utility costs
  • Divide the allowable shelter expense paid by an ineligible household member equally among all the household members including the ineligible household members AND
  • Count all but the ineligible members' pro-rata share as a shelter deduction for the remaining embers.

• Pro-Rated Shelter Expenses using SUA, LUA or Telephone Allowance
  • Divide the allowable shelter expense, less the standard utility allowance amount, paid by an ineligible household member equally among all the household members including the ineligible household members AND
  • Count all but the ineligible members' pro-rata share as a shelter deduction for the remaining household members AND
  • Use full amount of SUA, LUA or Telephone allowance as already determined.

• Treatment of Shelter Expenses for Non-Household Members
  • Where the household shares shelter or Utility expenses with a non-household member, only the amount actually paid or billed to the Food Assistance household is deducted as an expense
    • Utility Exception
      • The appropriate utility standard must not be prorated.