157.3 Allowable Lump Sum Expense Deductions

The CAO must allow deduction of certain expenses from a lump sum. All persons whose lump sum is counted get these expense deductions. The CAO must deduct expenses before deeming the lump sum or determining eligibility. Allowable expense deductions include, but are not limited to:

NOTE: The CAO must not allow a deduction for the cost of lottery tickets or earlier losses from cash prizes or lottery winnings.

157.31 Deductions from Earned lump Sum

The CAO must deduct expenses from countable earned lump sum using these steps:

NOTE: The earned income deduction and dependent care deduction are not allowed when deeming lump sum income. See Section 157.4.

The result is the total net earned income, including the lump sum.

Example: Ms. Arnold receives TANF for herself and one child. She reports receipt of $1,820 in delayed wages. Attorney fees for getting the wages totaled $250. She owes $886 reimbursement to DHS. Ms. Arnold is employed part-time with gross monthly earnings of $125.

Gross lump sum

$1,820.00

Expenses

- 250.00

 

1,570.00

Reimbursement due

- 886.00

 

684.00

Ms. A's other earnings

+ 125.00

 

809.00

50% Disregard

- 404.50

Income after 50% Disregard

404.50

Total net income including lump sum

$404.50

157.32 Deductions from Unearned Lump Sum

The CAO must deduct expenses from countable unearned lump sum income as follows:

Examples:

Gross lump sum

$20,000

Expenses

- 2,000

 

18,000

Replacement cost of automobile

- 3,000

 

$15,000

Reimbursement

- 8,000

Countable lump sum

$7,000

 

Gross lump sum

$15,000

Expenses

- 500

 

$14,500

Replacement cost of property

- 1,000

 

$13,500

Reimbursement due

- 5,000

Countable lump sum

$ 8,500

NOTE: Because the client acknowledged liability by signing the PA 176-NR, replacement value is limited to the budget group’s maximum resource limit.

Citations:

55 Pa. Code § 183.37

55 Pa. Code § 183.98

55 Pa. Code § 183.98(1)

55 Pa. Code § 183.98(2)

55 Pa. Code § 183.98(3)

55 Pa. Code § 183.98(4)

55 Pa. Code § 183.98(5)

55 Pa. Code § 183.98(6)

55 Pa. Code § 183.98(7)

 

 

 

Reviewed July 30, 2013