The CAO must deem lump sum received by these persons who are not receiving TANF, SBP, or SSI:
A legally responsible relative (LRR) living with the budget group if he or she is living with the budget group on or after the application authorization date;
A parent of a minor parent living with the budget group if he or she is living with the budget group on or after the application authorization date;
A stepparent living with the budget group if he or she is living with the budget group on or after the application authorization date;
When an LRR (except the parent of a TANF minor parent) receives a lump sum, the CAO must allow only the deductions listed in Section 157.3. The remainder of the lump sum, combined with any other countable income of the LRR, is deemed to the budget group. Treat the LRR as if he or she is a budget group member when determining eligibility.
When a parent of a TANF minor parent, a stepparent, or a sponsor of an alien receives a lump sum, the CAO must allow the deductions in Section 157.3 plus another deduction for the person’s basic living needs.
Basic living needs may include the needs of dependents living with the person. Use the standard of need for the person and included dependents to determine basic living needs. See Chapter 168, Appendix A for the standard of need.
The income and living needs of dependents of the lump sum recipient may or may not be included in the computation. The CAO must determine if the lump sum recipient’s dependents will be included in the computation as follows:
For an LRR, except a parent of a TANF minor parent, the person may choose to include the dependents’ income and needs.
For a parent of a TANF minor parent or stepparent, the person may choose to include the dependents’ needs. The CAO must not count dependents’ income.
For a sponsor of an alien, include all dependents but count only the income of the sponsor and the sponsor’s spouse.
The person whose income is being deemed always counts as a dependent unless he or she is not receiving benefits now due to an employment or support sanction.
Count other persons as dependents if all of the following conditions are met:
The dependent lives with the person.
The dependent is not applying for or receiving Cash Assistance.
The person provides:
a 1040, 1040A or 1040EZ for the previous tax years showing that the dependents were claimed for federal tax purposes; or
proof that he or she provides over 50 percent of the dependent's support.
Exception: The CAO must not include a dependent who is also a stepparent to a budget group member if the stepparent has income that will be deemed under the stepparent provisions.
A stepparent must always count his or her spouse as a dependent, except when a spouse who is an LRR has income or is sanctioned.
Example: A household consists of Mr. and Mrs. Allan, her daughter, and his son. Mrs. Allan and her daughter receive TANF. Mr. Allan receives a lump sum of $5,000 from delayed sick benefits. Although Mr. Allan is an LRR (to his wife) as well as a stepparent, the CAO treats him as a stepparent. The CAO deducts only the expenses related to receipt of the lump sum listed in Section 157.3. The remainder is deemed to Mrs. Allan and her daughter under Section 157.43.
The CAO must not apply the deeming steps in this section for a lump sum received by the following LRRs:
A stepparent who also qualifies as an LRR to a budget group member.
An LRR who lives in the common residence but receives TANF in another budget group. Apply the steps in Section 157.51 to determine the eligibility for the budget group that includes the LRR.
Treat a lump sum received by an LRR living with the budget group and not receiving TANF as if the LRR is a budget group member.
The CAO must determine the amount to be deemed using these steps:
1. Determine the countable lump sum by deducting any expenses required to get the income. See Section 157.3.
2. Determine which dependents to include. See Section 157.41.
3. If the lump sum is earned, add it to any other gross earned income the LRR received in the budget month.
NOTE: Count the earned income of the dependents as unearned. See steps #6 and #7.
4. From total earnings, deduct the following allowable work expenses:
$90 for TANF cases
5. If the lump sum is unearned, add it to any other unearned income the LRR received in the budget month.
6. Add to the LRR's total unearned income the earned and unearned income of dependents claimed in the computation.
7. Deduct expenses necessary to get the unearned income. Since the dependents’ earned income is counted as unearned income, allow a deduction for the actual expenses the dependent must pay to earn the income; such as child care, transportation, and mandatory deductions.
8. Add the total net earned and unearned income.
9. Determine the dollar amount difference between the family size allowance (FSA) for the budget group and what the FSA would be if the LRR and his or her dependents were included. See Chapter 168, Appendix B for FSA amounts.
NOTE: Do not include special items allowances.
10. Deduct the difference arrived at in step #9 from the total net income.
11. Deduct the verified payment of court-ordered support actually paid by the LRR to a person not living with the LRR.
12. Deduct the verified, actual payments made by the LRR to dependents not living with the LRR.
NOTE: The LRR must be claiming or be able to claim the person for federal income tax purposes in order to receive this deduction.
13. Deem the remainder as net unearned income to the budget group. See Section 157.5 to determine the eligibility.
The CAO must not apply the deeming steps in this section to a person who receives TANF in another budget group.
Determine the amount deemed using these steps:
1. Determine the countable lump sum by deducting any expenses required to obtain the income. See Section 157.3.
2 Determine which dependents are to be included. See Section 157.41 to determine which dependents may be claimed.
3. If the lump sum is earned, add it to any other gross earned income the person received in the budget month.
NOTE: Do not count the earned income of the dependents.
4. From total earnings, deduct the following allowable work expenses:
$90 for TANF cases
5. If the lump sum is unearned, add it to any other unearned income the person received in the budget month.
NOTE: Do not count dependents’ unearned income.
6. Add the total net earned and unearned income.
7. Deduct the standard of need in Chapter 168, Appendix A for the person and the dependents being claimed.
8. Deduct the verified payment of court-ordered or voluntary support actually paid by the parent of a TANF minor parent, stepparent, or sponsor of an alien to someone not living in the common residence.
NOTE: The parent of a TANF minor parent, stepparent, or sponsor of an alien must be claiming or be able to claim the person for federal income tax purposes in order to claim this deduction.
9. Deem the remainder as unearned income to the budget group.
Examples:
Karen is 16 years old and receives TANF for herself and her 2-year-old daughter. She lives with her father (parent of a minor parent) and 14-year-old brother. They do not receive TANF, SBP, or SSI. In June, the father receives a $3,600 retroactive Social Security check besides his first regular monthly Social Security check of $380. He also has a part-time job, which pays $125 per month. He pays court-ordered support of $50 per month for a child not living with him. Karen’s brother receives a monthly Social Security benefit of $190. The standard of need for two is $461.
|
Earned income |
|
$125 |
|
Work expenses |
- 90 |
|
|
Net earnings |
$ 35 |
|
|
Gross lump sum |
$3,600 |
|
|
Expenses |
- 0 |
|
|
Countable lump sum |
$3,600 |
|
|
Other unearned income |
+ 380 |
|
|
Total net unearned |
$3,980 |
+$3,980 |
|
Total net income |
|
$4,015 |
|
Standard of need for two |
- 461 |
|
|
|
$3,554 |
|
|
Court-ordered support |
- 50 |
|
|
Income deemed to Karen |
$3,504 |
Mr. Jones lives with his wife and his wife’s child by a previous marriage. The wife and child receive TANF but Mr. Jones does not. In April, he receives delayed wages of $2,560 from a previous employer. He verifies payment of $220 in legal fees to get the settlement. He also earned $160 in April from a new job.
|
Gross earned lump sum |
$2,560 |
|
Expenses |
- 220 |
|
Countable net lump sum |
$2,340 |
|
Other earnings |
+ 160 |
|
Total earnings |
$2,500 |
|
Work expenses |
- 90 |
|
Total net earnings, including lump sum |
$2,410 |
|
Unearned income |
+ 0 |
|
Total net income |
$2,410 |
|
Standard of need (Schedule 3) |
- 284 |
|
Total net deemed income |
$2,126 |
NOTE: Although Mr. Jones is the spouse of a budget group member, his income is deemed using the stepparent provisions.
Mrs. Jacobs receives TANF for herself and one child from a previous marriage. Living with her is her husband, who does not receive TANF, SBP, or SSI. Also living in the common residence is Mr. Jacobs’ 19-year-old son from an earlier marriage. He receives $100 each month for helping on a farm. Mr. Jacobs and his son receive only MNO. Mr. Jacobs pays $25a month court-ordered support for a child not living with him.
Mr. Jacobs reports he received an inheritance of $5,000 on July 5 from the estate of an uncle who died April 30. Reimbursement in the amount of $345 is due DPW. There are no other expenses connected with the inheritance. Mr. Jacobs chooses to include his 19-year-old son as a dependent for the lump sum computation. He verifies his son’s income and his July court-ordered payment.
|
Gross unearned lump sum |
$5,000 |
|
Expenses (reimbursement) |
- 345 |
|
Net lump sum |
$4,655 |
|
Total net income |
$4,655 |
|
Standard of need (Schedule 1) |
- 481 |
|
|
$4,174 |
|
Court-ordered support |
- 25 |
|
Total net income, including lump sum |
$4,149 |
Citations:
Reviewed July 30, 2013