450.5 Income Exclusions in Step 2

In Step 2, the CAO decides how much the individual must pay toward the cost of the individual’s care. The following income will not be counted in Step 2 for Medically Needy Only (MNO) and Nonmoney Payment (NMP) NMP individuals. (See Appendix A for a list of excluded income.)

55 Pa. Code § 181.452

NOTE: Income that is excluded may stay in the individual’s account or in another account held by or for the individual. The CAO will periodically review the individual’s resources to ensure that countable resources do not exceed the resource limit.

The CAO will count the interest earned from excluded income or an excluded resource unless it says not to in this section.

NOTE: If the individual gets income that is excluded and gives that income to his or her spouse or a dependent, that income is considered a contribution. (This does not apply to VA Aid and Attendance benefits.) The CAO will count the income contributed by the individual as income of the spouse or dependent.

The CAO will verify the amount of any excluded income and record the reason for excluding it. 55 Pa. Code § 181.3

450.51 Exclusions—Step 2

Veterans Aid and Attendance and housebound benefits. 55 Pa. Code § 181.81(9)

See Section 450.3, #12.

Exception: The CAO will count Aid and Attendance in Step 2 only if the VA says to. The CAO will file the written notice from the VA in the person’s case record.

Receipts from conversion of a resource

See Section 450.3, #9.

Refund of Medicare premium

See Section 450.3, #5.

Income tax refunds

See Section 450.3, #3.

Medical Assistance copayment refunds

See Section 450.3, #5.

Payments for medical care and services

See Section 450.3, #6.

Borrowed money

See Section 450.3, #1.

NOTE: The CAO will tell the individual to keep borrowed money in a separate account so that it can be identified.

Payments from credit life or disability insurance policies

See Section 450.3, #2.

Repayments of loans

See Section 450.3, #4.

Payments of bills made by a third party

See Section 450.3, #11.

Replacement income

See Section 450.3, #8.

Social services

See Section 450.3, #10.

Receipt of certain noncash items

See Section 450.3, #7.

Payments to victims of Nazi persecution

See Section 450.4, #24.

Payments for homeless assistance

See Section 450.3, #14.

Payments for radiation exposure

See Section 450.4, #17.

Unearned income reduced to pay back an overpayment

See Section 450.4, #14.

Payments for weatherization assistance

See Section 450.3, #15.

450.52 Exclusions from the Income of a Spouse or Dependent in Step 2

If the individual is claiming a deduction for a spouse or dependent who lives in the community, the CAO will figure out how much countable income the spouse or dependent has. (See Chapter 468, Eligibility and Payment, for information about deductions.)

In addition to the exclusions in Section 450.51, the CAO will exclude the following income received by the spouse or dependent.

55 Pa. Code § 181.452

NOTE: If the individual receives income that is excluded (except VA Aid and Attendance benefits) and gives it to the individual’s spouse or a dependent, the CAO will count it as income for the spouse or dependent.