Lump sum may be earned or unearned. Lump sum income is exempt if it is from any of the excluded sources in Chapter 150.
The CAO will not apply lump sum policy to cash received from the sale or transfer of a resource. A resource that has been converted to cash remains a resource and is treated according to Chapter 140.
Lump sum income is considered earned income if it is a nonrecurring, delayed payment from wages, tips, salaries, commissions, or employment bonuses.
A payment received as self-employment income is not lump sum income. See Chapter 152.
Unearned lump sum income includes, but is not limited to, nonrecurring payments from:
Retroactive benefits, such as Social Security benefits;
Delayed benefits such as unemployment compensation (UC) and workers’ compensation (WC);
Cash prizes;
The amount of a cash gift greater than the $30 maximum exemption per person per calendar quarter;
Cash lottery winnings;
Life insurance benefits;
Cash inheritances;
Personal injury and other damage awards and settlements.
A federal, state or local tax refund or an earned income credit (EIC) is not lump sum income. Any money remaining from an EIC or tax refund payment will be counted as a resource if it is kept into the month after the month when it is received.
A person may get more than one lump sum payment from the same or different sources. The CAO will count lump sum based on the calendar month when it is received. If the person receives more than one payment in a calendar month, the CAO will determine the total gross earned and/or unearned lump sum amounts before determining the effect on the assistance payment.
Example:
Mrs. Anderson receives TANF for herself and two children. She filed a discrimination suit against her previous employer for back wages and personal damages. On July 6, the employer paid $3,500 in back wages to try to have the suit withdrawn. On July 25, the employer reached a final settlement with her attorney and paid the remaining $2,000 in back wages plus $5,000 in personal damages. Total lump sum received in July is $5,500 earned (back wages) and $5,000 unearned (personal damages).
Reviewed July 30, 2013