A. Definition

Expenses Exceed income (EEI) is a situation that occurs when the monthly living expenses reported by a customer or responsible relatives exceed the amount of monthly income reported, either at the time of the initial determination of eligibility or subsequently.

B. Indications  of EEI

The presence of EEI may be indicated by one or more of the following:

• The customer reports some living expense such as a mortgage payment that is obviously in excess of the amount of income reported;

• The customer reports little or no income yet incurs some expenses for food, clothing or shelter;

• The customer had sufficient income or resources to meet expenses, but no longer has them and is unable to explain how future expenses will be met.

• The customer reports that his resources have met expenses, yet there is no evidence of sufficient liquid resources to cover expenses;

Example: A customer states that she paid her car payment this month from her checking account. The verified amount of her checking account indicates that there were insufficient funds to cover the car payment.

C. Exploring EEI with the Customer

Explore all EEI situations to determine how expenses have been or will be met. Consider the following:

• Does the customer have income that was not reported on the application? Explain to the customer what income is, including in-kind income. Cash gifts and contributions, no matter how small, are income and must be declared.

• If the customer is unable to meet expenses, how long can this situation continue? If it continues, what changes may occur as a result?

Example: The customer has used all of his income and resources to provide food and miscellaneous items and has not made the mortgage payment in several months. Although the customer's liability for expenses exceeds his income, those expenses are not really met. If this situation continues without change, it may be expected that the customer's home will be repossessed.

D. Proof

If it appears that an EEI situation exists, the customer must provide verification of all expenses to the extent that it is possible. 

Ask the customer whether the expenses have been paid or not. Paid expenses are of concern first, since the customer has already obtained funds from some source to meet the payment. Unpaid expenses are of concern next. Enter comments in ACE of the customer's expectations for expenses that cannot be met. 

Expenses that may need to be verified include, but are not limited to the following:

• Expenses for shelter: Rent, taxes, mortgage payments, insurance, utilities, garbage collection, repair and maintenance;

• Clothing and upkeep;

• Medical expenses not reimbursed by a third party: Doctor bills, dentist bills, and health insurance premiums;

• Transportation: Car payments, insurance premiums, gasoline, tires, oil, public transportation, fares and other maintenance costs;

• Food, meals and household supplies: Groceries, cleaning supplies, restaurant meals and nonfood household items;

• Credit purchases and loans: Furniture payments, finance company payments, etc.;

·      Other: Life insurance premiums, legal services, traffic fines, cigarettes, alcoholic beverages, etc.

Verification for expenses may include, but is not limited to:

• Receipts;

• Statements;

• Bills;

• Insurance Policies;

• Payment Books;

• Contracts;

• Collateral contacts with knowledgeable sources.

When no documentary evidence exists, obtain a written statement from the customer.

E. Documentation of EEI

Document the evaluation of whether EEI exists by the following procedures.

Step

Action

1

Total the monthly amount of verified expenses and compare to the total amount of income (including excluded income) for the control date.

IF. . .

THEN. . .

The amount of income, including excluded income, exceeds the amount of expenses

Document that EEI does not exist.

No further action is required.

Expenses exceed the customer's total income, including excluded income

Compare the amount of expenses that exceed the income to available liquid resources. 

• If the combination of income and resources exceeds the amount of expenses, EEI does not exist. Enter comments in ACE of your conclusion. No further action is required.

• If the combination of income and resources is less than the amount of expenses, go to Step 3.

Note: Liquid resources are those resources that can easily be converted to cash, such as checking accounts, stocks or mutual funds.

2

The customer or responsible relatives may be relying on resources that must be exhausted at some point. Divide the amount of available liquid resources by the amount required to meet monthly expenses to determine the number of months the resources will last. An alert must be set to review the customer's circumstances at the time resources are anticipated to run out.

F. Resolving Discrepancy

If there appears to be a discrepancy between expenses and income, give the customer the opportunity to resolve the discrepancy between expenses and income. Follow the procedures below to resolve the discrepancy.

Step

Action

1

Obtain a statement from the customer explaining how monthly paid expenses are being met without sufficient income or resources

IF the EEI is. . .

THEN. . .

An ongoing situation, not caused by a recent loss of income or other change and the customer cannot or will not explain how expenses are being paid

Deny or terminate eligibility because information necessary to determine eligibility has not been provided.

Due to a change in circumstances and the customer does not know yet how expenses will be met

Create an alert to review the situation within 6 months using the same procedures for documentation of EEI as described in E above.

2

Verify new income or resources identified during this process, according to the policy in this chapter or Chapter 700.00

A. Definition

Income deeming is the process of considering another person's income to be available to a customer, whether or not that income is actually contributed to the customer.

B. When Deeming Applies

Deeming applies to:

• Parental deeming; and

• Sponsor non-citizen deeming.

A. Definition

Parental deeming is the process of considering the income of the parent(s) to be available to a customer child, whether or not that income is actually contributed to the child.

B. Applying Parental Deeming

Apply parental deeming to ineligible parents when:

• A customer child is under age 18;

• Income eligibility is determined using the Net test (except for AHCCCS Freedom to Work); and

• The customer child lives with his or her ineligible parent(s) (including step parent(s)).

Note: Apply deeming rules to parents who are temporarily absent from the household due to active duty military service. They are considered to be living in the same household as the customer for income and resources deeming purposes. If evidence is provided indicating that the parent does not intend to return to the household upon conclusion of the duty assignment, stop deeming the parent's income beginning with the month following the month in which the intent was changed.

C. When Parental Deeming Does Not Apply

Parental deeming does not apply when:

• An eligible parent(s) resides with a customer child under age 18 whose income eligibility is determined using the Net Test ; or

• Income eligibility is determined for a customer age 18 or over; or

• A customer child's eligibility is determined for AHCCCS Freedom to Work (because only the customer's income is used to determine income eligibility for AHCCCS Freedom to Work); or

• Income eligibility is determined using the Gross test.

D. Income Used in Deeming

Consider only counted income in the calculation of deemed income. 

There are several types of income which are counted for eligibility, but excluded in the deeming process. (MS 609.01.E). 

When calculating the amount to be deemed to a customer-child from an ineligible parent, calculate the amount that can be deducted for allocations to other children in the household (excluding a customer child). (MS 610.08)

E. Income Excluded in the Deeming Process

Do not count the following types of income received by ineligible parent(s) when determining the amount of income that is deemed:

• Excluded income, as defined by the income type in MS 607.00;

• Income received by the ineligible parent that was used to determine the amount of a public income maintenance payment for himself or someone else. Such payments must be based on need and include payments made under TANF, and payments based on need provided by the VA or the Refugee Act of 1980, and state-funded assistance: General Assistance, Tuberculosis Control or Emergency Assistance. 

• Income of the ineligible parent paid under a Federal, State or local government program to provide the customer with chore, attendant or homemaker services;

• The portion of the ineligible parent(s) income which is payment for the following:

¡        An amount paid in child support to comply with the terms of court ordered support or support payments enforced under Title IV-D of the Act.

¡        Work expenses if the ineligible parent is blind. Follow procedures for calculating blind work expenses described in MS 610.07.

Deduct the Student Earned Income Exclusion from the earned income of the ineligible parent who is under age 22 and meets the definition of a student. (Refer to MS 610.02 for additional information regarding the Student Earned Income Exclusion.)

F. Proof

Verify and document excluded income used in the deeming process according to the procedures for the type of income (MS 607.00).

G. Calculating the Amount of Deemed Income

Follow the procedures below to calculate the amount of deemed income to be used in the eligibility process.

Step

Action

1

Subtract the allocation(s) for children (other than the customer) (MS 610.08) from the ineligible parent(s) counted unearned income.

2

Subtract the unused allocation(s) portion for children (other than the customer) (MS 610.08) from the ineligible parents counted earned income. (If the ineligible parent is under age 22 and meets the definition of a student, subtract the Student Earned Income Exclusion from the ineligible parent's income before subtracting the unused child allocation.) 

If any income (unearned or earned). . .

THEN. . .

Does not remain

The amount of deemed income from the parent(s) to the customer child is $0.00.

Remains

Continue with step 3 below.

3

Subtract the $20.00 general income deduction (MS 610.03) from the remaining unearned income.

4

From the remaining earned income, in the following order, subtract:

• Unused portion of $20 deduction (MS 610.03)

• Standard Work expense deduction (MS 610.04)

• Impairment Related Work Expenses (IRWE) (MS 610.05)

5

From the subtotal in calculated in Step 4 above, in the following order, subtract:

• 1/2 subtotal earned income (do not deduct if using SSI Non-cash 100% FPL standard)

• Blind Work Expenses (MS 610.07)

6

Combine the net unearned income that was calculated in Step 3 to the net earned income calculated in Step 5.

7

From the subtotal calculated in Step 6, subtract:

• The Federal Benefit Rate (FBR) (if completing the net test using FBR standards as income limit) or Federal Poverty Level (FPL) (if completing net test using FPL standards as income limit) if 1 parent; or

• Couple FBR (if completing the net test using FBR standards as income limit) or FPL (if completing net test using FPL standards as income limit) if 2 parents.

This is the amount of deemed income.

Note: See MS 616.00.C for the FBR and FPL amounts.

A. Policy

Non-citizens lawfully admitted into the United States for permanent residence under the Immigration and Nationality Act are qualified aliens. Some of these Lawful Permanent Residents (LPR) are sponsored by others who are responsible for their support. 

When the sponsor has signed an Affidavit of Support, this form is accepted by U.S. Citizenship and Immigration and Services (USCIS) as an agreement to support the non-citizen as a condition of the non-citizen's admission for permanent residence in the United States.  

For Medicaid, KidsCare and other Federal means-tested programs, the income of sponsors is counted in determining a sponsored non-citizen's eligibility.  

For ALTCS, the income and resources (MS 703.09) of the sponsor are counted in determining a sponsored non-citizen's eligibility.

B. Legal Authorities

The legal authorities for the sponsor deeming rules include:

• The Personal Responsibility Work Opportunity and Reconciliation Act of 1996 (PRWORA), as amended by the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (IIRIRA);

• Public Law 104-208;

• Public Law 105-33; and

• The Balanced Budget Act of 1997 (BBA).

C. Sponsor Deeming

Sponsor deeming is the process of considering the income and resources (MS 703.08) of the sponsor to be available to the sponsored non-citizen, whether or not the income or resources (MS 703.08) are actually made available. 

Deemed income is counted in determining:

• Income Eligibility;

• ALTCS Share of Cost (SOC) (MS 1200.00); and

• Premiums (MS 1200.00).

Sponsor deeming only applies to individuals who are applying for AHCCCS Health Insurance.

D. Non-citizens Subject to Sponsor Deeming Rules

The sponsor deeming rules apply only to customers who:

• Are Lawful Permanent Residents (LPRs);

• Applied for LPR status on or after December 19, 1997;

• Are sponsored by either a family member or an employer who signed an INS-864, Affidavit of Support; and

• Are eligible for full AHCCCS Health Insurance (MS 522.01.D)

Exception: If the sponsor and the customer are in the same income group (i.e., the sponsor is the customer's spouse or parent and lives with the customer), calculate the customer's income eligibility using regular budgeting rules and do not apply non-citizen sponsor deeming rules in MS 609.07.

E. Non-citizens NOT Subject to Sponsor Deeming

Customers who are Lawful Permanent Residents (LPRs) are not subject to the sponsor deeming rules when the LPR:

• Entered the U.S. or applied for a visa or adjustment of status before December 19, 1997;

• Adjusted immigration status to Lawful Permanent Resident from status as a refugee or asylee. Individuals who adjusted from these classifications are exempt from sponsor deeming, even if they have sponsors;

• Qualifies only for Federal Emergency Services (FES);

• Has a sponsor who signed an Affidavit of Support other than the USCIS Form I-864. Sponsor deeming does not apply if the sponsor signed the USCIS Form I-134 or the USCIS Form I-361, which are also affidavits of support.

• Is indigent (MS 609.04);

• Is a victim of domestic violence or extreme cruelty (MS 609.05); or

• Has acquired 40 qualified quarters of coverage based on earnings (MS 609.06).

F. Overview of the Sponsor Deeming Process

This is an overview of the steps involved in non-citizen sponsor deeming process:

Step

Action

1

Verify that the customer applied for LPR status on or after 12/19/97.

2

Determine that the customer is eligible for full AHCCCS Health Insurance (MS 522.01.D), not just Federal Emergency Services (FES).

3

Verify that the customer has a sponsor (MS 609.03).

4

Determine if the sponsor is the customer's spouse or parent:

If the sponsor is

And the customer

Then

The customer's spouse or parent

Lives with the sponsor

Do not deem.

Does not live with the sponsor

Continue to Step 5.

Someone else

Continue to Step 5.

5

Mail the Sponsor Deeming form (AH-611) or contact the customer by phone to obtain information about the sponsor and to determine if the customer qualifies for one of the exemptions:

• Indigent (MS 609.04);

• Victim of Domestic Violence (MS 609.05); or

• 40 quarters (MS 609.06).

6

If the customer does not qualify for any of the exemptions, obtain verification of the income (and resources for ALTCS) that is subject to deeming.

7

Determine the sponsor's deemed income amount using the Sponsor Deeming Worksheet (AH-401) and for ALTCS, the sponsor's deemed resource amount (MS 703.09).

G. When Does Deeming Stop?

The sponsor deeming requirement stops when:

• The sponsor dies;

• The customer becomes a naturalized U.S. citizen;

• The customer qualifies for an exemption:

o  Becomes indigent;

o  Becomes the victim of battery or extreme cruelty; or

o  Can be credited with 40 qualifying quarters of coverage.

H. Verification and Reporting Requirements

During the application process and while receiving AHCCCS Health Insurance, the customer is responsible for:

• Providing verification of the income and resources of the sponsor and the sponsor's spouse; and

• Reporting changes in the sponsor or sponsor's spouse's income and resources.

A. Policy

Verify sponsorship of any customer who became a Lawful Permanent Resident (LPR) on or after 12/19/1997, unless you have proof that the customer is exempt from sponsor deeming.

B. Affidavit of Support

When the customer provides an Affidavit of Support Form I-864 with the application, accept this form as proof of sponsorship. If the customer does not have the Affidavit of Support, use the process in Subsection C.

C. USCIS Verification Process

Use this process to verify sponsorship when the customer does not provide proof of sponsorship. Verify sponsorship thru the United States Citizenship and Immigration Services (USCIS) as follows.

Step

Action

1

Complete an Initial, and if necessary an Additional verification, through the SAVE Verification Information System (VIS):

If the SAVE VIS process. . .

Then. . .

Confirms that the customer:

• Is a LPR; and

• Attained LPR status on or after 12/19/1997

Continue to Step 2

• Does not confirm LPR status; or

• Shows LPR status began prior to 12/19/1997

STOP. Sponsor deeming does not apply.

2

Send a Document Verification Request Supplement (G-845S) to the USCIS to verify sponsorship and possible exemptions:

·  Attach copies of both sides of the customer's immigration document to the G-845S; and

• Check Items # 1& 7.

If the G-845S response:

Then . . .

Indicates that the customer was not sponsored on form I-864

STOP. Sponsor deeming does not apply.

Verifies that the customer has a sponsor who signed an Affidavit of Support Form I-864

USCIS provides the name, address and Social Security number of the sponsor.

A. Policy

Sponsor deeming does not apply for 12 months beginning with the application month when the customer is determined to be indigent. 

The indigent exception may be renewed for an additional 12 months when, at renewal, the customer is still indigent. 

During the period in which an indigent exception is applied:

• Do not deem resources from the sponsor (and the sponsor's spouse) for ALTCS eligibility;

• Do not deem income from the sponsor (and the sponsor's spouse); and

• Count (for income eligibility) only the amount of cash actually provided by the sponsor to the customer.

B. Definition of Indigent

A customer is indigent when the total income for the customer's income group, including support, vendor payments or cash actually paid to the non-citizen in currency or for food, clothing, shelter or utilities is less than or equal to 100% of the FPL for the size of the income group.

EXCEPTIONS:

A customer is indigent only when he or she is unable to obtain food and shelter, therefore the customer is not indigent when:

• The customer is living with his or her sponsor. Assume that the sponsor is providing food and shelter and meeting the customer's food and shelter needs; or

• The customer is not living with his or her sponsor but is receiving free room and board.

C. Claiming the Indigent Exception

The customer may claim this exception by completing the Indigent Exception section of the Sponsor Deeming form (AH-611).

D Determining Indigency

Follow these steps to determine if the customer is indigent:

 Step

Action

1

Is the customer residing with his or her sponsor?

If. . .

Then. . .

Yes

STOP. The non-citizen is NOT indigent.

No

Continue to Step 2.

2

Does the customer receive free room and board?

If. . .

Then. . .

Yes

STOP. The customer is NOT indigent.

No

Continue to Step 3.

3

Determine the total gross income of the customer's income group using the Indigent Exception Worksheet (AH-402):

• Include any currency paid to the non-citizen by the sponsor.

• Include the value of any vendor payments the customer receives for food, utilities or shelter.

4

Compare the total to 100% of the FPL for the income group size (MS 616.00.K):