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1. Use countable monthly unearned income.
2. Subtract the $20 General Income Exclusion.
Do not give the $20 exclusion to an individual whose only income is a needs based VA Pension or a VA Compensation payment received as a surviving parent of a veteran.
3. Apply the General Income Exclusion to unearned income first. Apply any remainder to earned income.
1. Compute net self-employment farm income, if applicable. (Gross income minus operational expenses = countable net income.) Add to any other earned income.
2. Subtract any portion of the $20 monthly General Income Exclusion, which has not been excluded from unearned income.
3. Subtract the $65 Earned Income Exclusion.
4. Deduct Impairment Related Work Expenses (IRWE) if applicable.
IRWE are expenses for items or services which directly enable a person with a disability to work and which are incurred by the a/r because of a physical or mental impairment. These expenses can be excluded from the a/r’s earned income when certain conditions are met.
a. Apply the IRWE exclusion only to earned income. Deduct only the amount paid by the individual for the expenses.
b. Exclude IRWE from the monthly earned income of an a/r that is used to meet any expenses attributable to earning the income if the person is:
(1) Disabled; and
(2) Under age 65; or
(3) Age 65 or older and received SSI or RSDI as a disabled person in the month prior to becoming age 65.
c. IRWE can be given to the a/r when:
(1) The severity of the impairment requires the a/r to purchase or rent or use items and services in order to work, and
(2) The expense is reasonable. “Reasonable” is the standard charge for the item or service in the person’s community, and
(3) The cost is paid in cash by the a/r and is not reimbursable from another source (e.g., Medicaid, Medicare, private insurance), and
(4) The a/r made payment for item/services in a month that he worked and received income for working and obtained item/services, or
(5) The a/r worked and received the item/service before receiving a paycheck.
d. Verification of IRWE
(1) To verify the need of the item/service, request that the a/r provide a statement for the need of the item/service for himself.
(2) To verify payment for the item/service, request that the a/r provide copies of cancelled check(s) or paid receipts. Exclude the basic cost of the item/service as IRWE.
(3) If the cost is unknown to the agency or it appears to be unreasonable, contact a provider of that item/service.
(4) Ask the provider for basic cost of the item/service. Use basic cost amount.
(5) If the a/r provides receipts for recurring items/services paid for one week, convert that amount to a monthly amount and allow the monthly amount.
e. At application and redetermination, verify the expense the a/r had for items/services for the past 12 months or for the number of months the a/r had the expense.
f. If the a/r incurred an expense in the past 12 months for items/services but no payments were made, do not allow in the budget.
g. If the a/r incurs the expense in the month of redetermination, treat it as a change in situation. If the a/r paid for the item/service in full, deduct the expense from the income for that month.
h. If the a/r is paying for the item/service in installments, deduct from the income the monthly installments.
i. Items/services that can be used for IRWE include but are not limited to:
(2) Prescriptions and expendable medical supplies such as bandages, catheters, face mask.
(3) Guide dog, including cost of purchasing the dog, its food, and veterinary care, etc.
(4) Medical devices such as braces, inhalers, pacemakers, respirators, wheelchair and the repair of that item.
(5) Physical Therapy.
(6) Prosthetic devices required to work and the maintenance and repair of these devices.
(7) Structural modifications to the a/r’s home to create a workspace or to allow the a/r to get to and from work.
(8) Training to use impairment-related items related to work, such as Braille, cane travel, use of special equipment. Training does not include general education courses.
(9) Other work-related equipment/services such as one handed typewriters, special tools, typing aids, uniforms, safety shoes, if impairment-related.
(10) Transportation to and from work.
(11) Vehicle modifications.
j. Non-allowable deductions
(1) In-kind payments,
(2) Expenses which will be reimbursed,
(3) Items that are furnished by a third party, and
(4) Expenses deducted in determining net countable earned income.
5. Subtract ½ of the remaining earned income. Never reduce earned income below zero.
C. Add A/R’s Unearned Income and Earned Income Together
Example: Mr. Jones is an SAD recipient. He had Social Security of $520.00 and gross monthly (converted) earned income of $600.00 for January. He paid a total of $50.00 for wheelchair rental and medical supplies in January. You have determined that these items meet the IRWE requirements.
Monthly Gross Unearned Income (already converted to a monthly amount) |
$520.00 |
General Income Exclusion |
- 20.00 |
Countable Net Unearned Income |
$ 500.00 |
Gross Earned Income |
$600.00 |
Earned Income Exclusion |
- 65.00 |
$535.00 | |
IRWE |
- 50.00 |
$485.00 | |
½ of the remainder ($485.00) |
- 242.50 |
$242.50 | |
Countable Net Unearned Income |
$500.00 |
Countable Net Earned Income |
+242.50 |
TCMI |
$742.50 |
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For questions or clarification on any of the policy contained in these manuals, please contact your local county office.
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