A. General

Use the income deductions listed in this subsection for

• Calculating the income of the customer or the customer's spouse for the net test; or

• Calculating the amount of income deemed to a customer child from an ineligible parent for the net test.

B. Applying Income Deductions

The table below shows which income tests the income deductions listed in this section apply to. 

If countable income is reduced to zero after applying a deduction, do not evaluate any additional deductions.

ALTCS

Net-Test for:

Type of Deduction

Gross Test

SSI-MAO (FBR)

SSI- MAO

(FPL)

QMB

SLMB

QI-1

AHCCCS FTW

Parent Deeming Income

Child Support Deduction

X

X

X

X

Student Earned Income Exclusion

X

X

X

X

X

General Income Deduction

X

X

X

X

X

Standard Work Expense Deduction ($65.00)

X

X

X

X

Impairment Related Work Expense (IRWE)

X

X

X

X

X

1/2 Work Expense Deduction

X

X

X

X

Blind Work Expenses

X

X

X

X

X

Child Allocations

X

X

X

X

Note: For the AHCCCS Freedom to Work Program, only the customer's income from working is counted for income eligibility. All unearned income of the customer and all income (earned and unearned) of the customer's spouse and family are disregarded for income eligibility. Therefore, a child support payment (unearned income) received by the customer is disregarded for income eligibility for the AHCCCS Freedom to Work Program. In addition, the child allocation is not allowed in the budgeting process for the AHCCCS Freedom to Work Program.

A. Policy

There are two different child support deductions.

1. A deduction from child support income received by the customer.

• ALTCS Acute (Net)

• SSI-MAO

• MCS

2.      A deduction for the amount of child support paid by an ineligible parent to a child who is not the customer (parent to child deeming).

• ALTCS Acute (Net)

• SSI-MAO

• MCS

B. Applying Deduction

Apply the child support deduction as follows:

WHEN the calculation is. . .

THEN. . .

Net Test:

• Deduct one-third of the amount of a child support payment for a customer child; and

• Count the remainder as unearned income to the customer child.

Parent to Child Deeming:

Deduct the amount of child support paid by an ineligible parent, which complies with the terms of court ordered support or is enforced under Title IV-D of the Act from the parent's income that is deemed to a child.

Note: If child support payments are ordered by the court for the customer or the spouse of the customer to pay, do not deduct the amount paid by the customer of spouse for the:

• Net Test

• Gross Test

• ALTCS Share of Cost

C. Proof of Child Support Payments

See MS 607.18.E for proof of child support payments.

A. Policy

To qualify for the student earned income exclusion, both of the following conditions must be met:

• The individual must be under age 22; and

• The individual must be a part-time or full-time student regularly attending a school (grades 7 - 12), college, university or a course of vocational or technical training designed to prepare for gainful employment.

• ALTCS Acute (Net)

• SSI-MAO

• AHCCCS FTW

• MCS

B. Applying Deduction

Deduct the student earned income exclusion from the earned income of an individual who is under age 22 and who is considered to be a student. 

C. Proof of Student Child Status

When an application indicates that an individual may be attending school and eligible for this deduction follow the procedures to verify student status.

Step

Action

1

Complete the Request for Verification of School Attendance (DE-208)

2

Document the following in the case comments:

• Regular attendance;

• Intent to return to school if school is not in session;

• The amount of the student's counted earned income (including payments from Youth Corps, work study or similar programs).

D. Definition of Regular Attendance

Regular attendance means that the individual takes one or more courses of study and attends classes:

• In a college or university for at least 8 hours a week under a semester or quarter system;

• In grades 7-12 for at least 12 hours a week and taking standard academic or vocational courses; 

Exception:  An individual taking a special course of study which is not equivalent to standard high school courses is not considered to be a student unless the special course is designed to prepare the child for gainful employment. An individual taking a special course for the mentally retarded which provides training to meet needs such as dressing and eating is not considered to be a student. 

• In a course of study to prepare him for gainful employment for at least 15 hours a week if the course involves shop practice, or 12 hours a week if it does not involve shop practice.

Note: The individual remains a student if he or she regularly attended classes prior to a school vacation and intends to return when classes resume.

E. Calculation

Follow the process below to calculate the earned income of a student who is under age 22.

Process #

Description of Process

1

Deduct the following amounts from the earned income of the student:

For calendar year:

A monthly amount of no more than:

With a total limit per calendar year of:

2008

$1,550

$6,240

2007

$1,510

$6,100

Note: Monthly and yearly maximum amounts may be increased annually in January based on the cost-of-living adjustment.

2

Apply the deduction every month, beginning with the first eligible month. Earnings the student receives prior to the first month of AHCCCS eligibility do not count toward the annual limit. Continue to allow the deduction until:

• The deduction is exhausted,

• The individual no longer meets the criteria of a student,

• The individual is no longer under age 22, or

• The individual no longer has earned income.

3

Use the Student Earned Income Deduction Worksheet (DE-417) to calculate the monthly amounts and to anticipate when the student will reach the annual limit. Check ACE worksheets to determine if the correct monthly is being applied. Contact the Technical Service Center if the correct amount is not deducted.

Note: The Student Earned Income Exclusion is subtracted from earned income prior to other earned income deductions in the net test.

A. Policy

$20 can be deducted from any type of earned or unearned income that is not based on need. 

• ALTCS Acute (Net)

• SSI-MAO

• AHCCCS FTW (deduction applies to earned income only)

• MCS

B. Applying Deduction

Apply this deduction to the income of the customer, the customer's spouse, the ineligible parent of a customer child in the parental deeming process, or the sponsor of a non-citizen:

Follow the general guidelines below for applying the deduction.

IF there is. . .

THEN apply . . .

Both earned and unearned income

• The deduction first towards the unearned income; and

• Then apply any unused amounts of the deduction to the earned income.

Only unearned income

The entire amount to the unearned income.

Only earned income

The entire amount to the earned income. 

Note: Applying the $20.00 general income deduction to only earned income will always be applicable for the AHCCCS Freedom to Work Program because all unearned income of the customer, the customer's spouse and customer's family is disregarded for income eligibility.

Note: When a spouse's income is counted for income eligibility, apply the deduction only once, even when both spouses have income. 

C. Needs Based Payments

Do not deduct the general deduction from the following types of counted income because the payments are based on need:

•Needs based payments involving Federal funds:

¡        TANF (AF) (MS 607.79);

¡        VA Benefits (compensation or pension or) based on need (MS 607.94 and    607.98);

¡        BIA-GA (MS 607.14);

¡        Refugee Assistance (MS 607.65)

¡        Title IV-E foster care payments (MS 607.31)

¡        Title IV-E adoption assistance (MS 607.01);

¡        SSI (MS 607.78)

• Needs based funds from private charitable organizations, such as Catholic Charities and the Salvation Army

A. Policy

The standard work expense deduction is $65.00.

• ALTCS Acute (Net)

• SSI-MAO

• AHCCCS FTW

• MCS

B. Applying Deduction

Apply the work expense deduction to the counted earned income of:

• An individual customer;

• A couple, when one or both spouses are the customer even when both spouse's have earned income;

• An ineligible parent of a customer child when deeming the parent's income.

Deduct $65.00 from earned income remaining after the previous deductions.

A. Policy

The reasonable cost of certain impairment-related services and items that a disabled person needs in order to work and which are necessarily incurred by that individual because of a physical or mental impairment can be deducted from earned income in determining eligibility, even if these items and services are also needed for normal daily activities. These expenses are referred to as impairment related work expenses ((IRWE). 

This deduction may be applied to the income of the customer, the customer's spouse, or the ineligible parent of a customer child in the parental deeming process. This deduction does not apply to the SOC calculation.

• ALTCS Acute (Net)

• SSI-MAO

• AHCCCS FTW

• MCS

Note: This deduction does not apply to the share of cost calculation (MS 1200.00) or non-citizen sponsor deeming.

B Applying Deduction

Deduct IRWE from earned income after subtracting any unused portion of the general deduction and the $65 earned income deduction but prior to deducting 1/2of the remaining earned income.

C. Disability Criteria for Deduction

To qualify for the IRWE deduction, the individual must meet one of the following conditions:

• Disabled (but not blind) and under the age of 65 years;

• Disabled (but not blind) and receives SSI as a disabled person for the month prior to the month he reaches the age of 65 years.

D. Additional IRWE Eligibility Criteria

An individual who meets one of the conditions in C above must also meet all of the following four conditions to be eligible for the IRWE deduction:

• The individual's countable income, after application of the IRWE deduction, does not exceed the appropriate income standard (see MS 616.00).

• The severity of the individual's impairment requires the purchase or rental of certain items and services in order for him to work.

• Payment for the IRWE is in cash (including checks or other forms of money) and not in-kind.

• The cost of such items or services is paid by the individual who will receive the income deduction.

E. Items or Services Paid by Other Sources

Do not deduct the cost of an item or service that has been, could be, or will be paid by any other source (individual, private insurance plan, Medicare, Medicaid, or other plan or agency).

F. Deduction for Payment for Services

Deduct the payment for services if the services are received while working and payment is made in a month the recipient of such services is working. Allow the deduction for any of the following conditions:

• Even though the recipient of such services must leave work temporarily to receive the services (he is still considered to be working).

• Payment is made in the month earned income is received and the earned income is for work done in the month the services are received.

• Employment begins and payment for services is made before the month earned income is received;

• A payment for services is made after employment stops, and the payment is made in the month earned income was received for work done in the month the services were received.

G. Payment for Deductible Items

Deduct payment for deductible items (regardless of when the item was acquired) if payment is made in a month the recipient of such an item is working. 

Allow the deduction if payment is made in the month earned income is received and the earned income is for work done in the month the item is used.

• If employment begins and a payment for a deductible item is made before the month earned income is received, the payment is deductible;

• If a payment for a deductible item is made after employment stops, and the payment is made in the same month in which earned income is received for work done in the month the item was used, the payment is deductible.

Payment for a deductible item made in any of the 11 months preceding the month work begins may be deductible:

IF. . .

THEN. . .

The item is paid for in full during these 11 months

Prorate the payment over the 12-consecutive month period beginning with the month of the first payment. 

Note: The only portion of the payment which is actually deductible from earned income is the portion prorated to the month work begins and any following months.

Installment payments (including a down payment) are made for a particular item during these 11 months.

Total the payments and consider the payments to have been made in the month of the first payment.

• The sum of all payments made is prorated over the 12-consecutive month period beginning with the month of the first payment (but never earlier than 11 months before the month work began).

• Only that portion of the total which is deductible is the portion prorated to the month work began and the following months.

Note: Either the entire amount of the deduction may be applied to the first month of work, or it may be prorated over a 12 consecutive month period beginning with the first month of work, whichever the customer selects.

H.  IRWE Expenses Which May Be Deducted

The following provides the type of payments that may be deducted as an IRWE expense.

Payment is for. . .

Description

Attendant care services:

• Expenses incurred for assistance with personal functions (e.g., dressing, administering medications) at home in preparation for going to and assistance in returning from work.

• Expenses incurred for assistance in traveling to and from work, or while at work for assistance with personal functions (e.g., eating, toileting) or with work-related functions (e.g., reading, communicating).

• Payments made to a family member to provide attendant care services when:

•Such family member, in order to perform such services, suffers an economic loss by terminating his employment or by reducing the number of hours he works.

•A family member is anyone who is related to the customer by blood, marriage or adoption, whether or not that person resides with the customer.

Note: Only that portion of a payment to an attendant that is for services that come under these provisions is deductible.

Medical devices:

• Medical devices include durable medical equipment which can withstand repeated use, is customarily used for medical purposes, and is generally not useful to a person in the absence of an illness or injury (e.g., wheelchairs, hemodialysis equipment, canes, crutches, inhalators, and pacemakers).

• Payments made for medical devices utilized to enable the individual to work are deductible.

Prosthetic devices:

• A prosthetic device replaces an internal body organ or external body part (e.g., artificial replacements of arms, legs and other parts of the body).

·  Payments made for prosthetic devices utilized to enable the individual to work are deductible.

Equipment

• When special equipment is required in order for the individual to do his job, payments made for that equipment are deductible (e.g., one-hand typewriters, telecommunication devices for the deaf, tools specifically designed to accommodate a person's impairments).

• The location of the individual's place of work determines which modifications to his residence are deductible.

¡    When employed outside the home, only the cost of changes made outside the home to permit the individual to get to his means of transportation (e.g., the installation of an exterior ramp for a wheel-chair confined person, special exterior railings or pathways for someone requiring crutches) are deductible.

¡    When employed at home, the costs of modifying the inside of the individual's home in order to create a working space to accommodate the impairment(s) are deductible, but only to the extent that the changes pertain specifically to the space in which the individual actually works (e.g., enlargement of a doorway leading into the work space, modification of the work space to accommodate problems in dexterity).

·  Non-medical appliances and equipment that are not ordinarily used for medical purposes (e.g., portable room heaters, air conditioners, humidifiers, dehumidifiers, electric air cleaners) are generally not deductible.

¡    When unusual circumstances clearly establish an impairment-related and medically verified need for such an item because it is essential for the control of the individual's disabling condition (and thus enables the individual to work), expenses for such an item are deductible.

¡    To be considered essential, the item must be of such a nature that if it were not available there would be an immediate adverse impact upon the individual's ability to function in his work activity (e.g., an electric air cleaner by an individual with severe respiratory disease who cannot function in a non-purified air environment, regardless of whether the item is used at home or in the work place in this situation).

Note: Any cost deducted as a business expense for the self-employed in the eligibility determination process cannot be deducted as an IRWE.

Payment is for. . .

Description

Drugs and medical services:

• Payments made for drugs or medical services, including diagnostic procedures, used to control impairment(s) are deductible.

• The drugs or services must be prescribed (or utilized) to reduce or eliminate symptoms of the impairment(s), or to slow down its progression. Only the costs of drugs or services directly related to the individual's impairment(s) are deductible.

• Examples of deductible drugs and medical services are:

•Anticonvulsant drugs to control epilepsy or anticonvulsant blood level monitoring;

•Antidepressant medication for mental disorders;

•Medication used to relieve the side effects of certain treatments;

•Radiation treatment or chemotherapy for cancer patients;

•Corrective surgery for spinal disorders;

•Electroencephalograms and brain scans related to a disabling epileptic condition;

•Tests to determine the effectiveness of medication on a diabetic condition;

• Immunosuppressive medications that kidney transplant patients regularly take to protect against graft rejection.

• Examples of non-deductible drugs and services:

•Routine annual physical examinations;

•Optician services (unrelated to a disabling visual impairment);

• Dental examinations.

• The diagnostic procedures must be performed to evaluate how the impairment(s) is progressing, or to determine what type of treatment should be provided for the impairment(s).

Similar items and services

When required to utilize items and services not specified in one of the types of payments listed above but which are directly related to the individual's impairment(s) and which are needed to work, their costs are deductible.

• Payments made for expendable medical supplies (e.g., incontinence pads, catheters, bandages, elastic stockings, face masks, irrigating kits, disposable sheets and bags) are an allowable deduction.

• Payments made for physical therapy needed in order to allow the individual to work is an allowable deduction.

• Payments for transportation costs to or from work will be deductible in the following situations:

¡ When the individual requires a vehicle which has structural or operational modifications in order to get to work. These modifications must be critical to the operation or use of the vehicle and directly related to the individual's impairment(s).

¡  The costs of the required modifications are deductible, but not the cost of the vehicle.

¡  A mileage allowance of 28¢ per mile for the trip to and from work is deductible.

¡  When the individual requires driver assistance, taxicabs, or other hired vehicles in order to work, amounts paid to the driver and, when the individual's own vehicle is used, a mileage allowance of 28¢ per mile for the trip to and from work is deductible for the trip to and from work is deductible.

¡  When the individual's impairment(s) prevents him from utilizing available public transportation to and from work and he must drive his unmodified vehicle, a mileage allowance 28¢ per mile for the trip to and from work is deductible when it can be verified through the individual's physician or other sources that the need to drive is caused by the individual's impairment(s) and not due to the unavailability of public transportation.

Installing, maintaining, and repairing deductible items:

When the device, equipment, appliance, etc., that an individual utilizes qualifies as a deductible item as described in any of the above types listed above, the costs directly related to installing, maintaining, and repairing these items are also deductible. 

Note: The costs which are associated with modifications to a vehicle are deductible; with the exception of a mileage allowance (28¢ per mile for the trip to and from work), the costs which are associated with the vehicle itself are not deductible.

I Proof of IRWE Expenses

The individual must provide proof of:

• The individual's need for items or services for which deductions are claimed;

• The cost of the items or services; and

• Payment for item or services for which deductions are claimed.

A. Policy

One-half of the remaining earned income can be deducted after all previous earned income deductions are applied.

• ALTCS Acute (Net)

• SSI-MAO

• AHCCCS FTW

• MCS

Note: This deduction does not apply when income eligibility is being determined for SSI-MAO using the FPL limit.

B. Applying Deduction

Apply this deduction after all previous deductions have been applied to the earned income. 

Deduct 1/2 of the remaining earned income.

Note: If income eligibility is being determined for SSI-MAO using the FPL limit, do not deduct 1/2 of the remaining earned income.

A. Policy

Ordinary and necessary expenses attributable to the earning of income can be deducted from the income earned by an individual who is blind under the following conditions:

• Individuals who are over the age of 65 and blind are not entitled to the deduction unless the individual was eligible for SSI or SSI related MAO programs as a blind person in the month before turning 65.

• Eligible spouses who are also blind and working may qualify for their own blind work expense deduction.

• Expenses cannot exceed the amount of earned income for any control date. Do not carry over unused amount of expenses to another month.

• Expenses are deductible only in the month in which they are paid. Inform the blind individual that expenses may not exceed the amount of earned received in a month so they may arrange payment of expenses to his or her advantage.

• ALTCS Acute (Net)

• SSI-MAO

• AHCCCS FTW

• MCS

B. Applying Deduction

Deduct Blind Work Expenses from earned income after subtracting any unused portion of the general deduction, the $65 earned income deduction and 1/2of the remainder.

C. Types of Expenses Allowed

Only ordinary and necessary expenses reasonably attributable to the earning of income are deductible. To be deductible an expense need not relate directly to the blindness of the individual, it need only be an expense related to working. There are three major categories of expenses. The following are some (but not necessarily all) types of expenses.

Type of Expense

Type of Expense Includes

Transportation to and from work:

• Bus or cab fare (actual cost).

• Cane travel instruction.

• Guide dog and upkeep.

• Private automobile ($.28 per mile).

Job performance:

• Braille instruction;

• Child care costs (if not otherwise provided);

• Equipment needed on the job;

• Instruction in grammar (if work related);

• Licenses;

• Meals consumed at work;

• Professional association dues (work related);

• Prosthesis needed for work (even though not blind related);

• Optical aids;

• Reader;

• Safety shoes;

• Taxes (Federal, state or local income taxes);

• Taxes (FICA or self-employment);

• Tools (used on the job);

• Translation of materials into Braille;

• Uniforms and upkeep;

• Union dues;

• Wheelchair (necessary due to other disability).

Job improvement:

• Stenotype instruction for blind typists;

• Key punch training;

• Computer program training.

D. Expenses Not Allowed