FOOD STAMP CERTIFICATION MANUAL SECTION: DEDUCTIONS
6100 - 6100 SUBJECT: SUMMARY
DATE: 6-1-96
6100Summary
When calculating a food stamp budget, a caseworker must determine which deductions will be used in that budget. There is one deduction which is uniformly used in every budget calculated. This is the standard deduction.
The earned income deduction is applied in every budget when the household contains a member with earnings.
The farm loss deduction is applied only when a household has a member engaged in a farming operation and that operation sustains a loss.
Dependent care cost deductions are payments for the actual costs for the care of a child or an incapacitated adult. There is a limit to the amount of the deduction for dependent care costs. See Appendix D to the Food Stamp Certification Manual for the current limits.
An excess medical deduction is allowable only for aged and/or disabled household members. Medical costs for these members which exceed $35 per month per household will be deducted.
A child support deduction is allowed for legally obligated child support paid by a household member to an individual who is not a household member.
Excess shelter cost deductions are allowed when any household's monthly costs for rent or house payment, real estate taxes, insurance on the home, and utilities exceed 50 percent of the household's income following all other deductions. There is no limit to the amount of excess shelter cost deduction for households containing an aged or disabled member. All other households have a limit. See Appendix D for the current maximum excess shelter deduction for these households.
These are the only deductions which can be used when calculating a food stamp budget.
Deductions are applied after the gross income has been calculated. The gross income is calculated by determining the total gross amount of all income after all exclusions.
See FSC 5400 for an explanation of income exclusions.
See FSC 5500-5700 for an explanation of countable income.
See FSC 7000 for an explanation of calculating gross income prospectively.
Each deduction is discussed in the order of application.
FOOD STAMP CERTIFICATION MANUAL SECTION: DEDUCTIONS
6200 - 6200 SUBJECT: EARNED INCOME/
DATE: 4-1-90 FARM LOSS
6200The Earned Income Deduction
In the process of calculating a food stamp budget, the earned income deduction is applied first. The earned income deduction is a percentage of the gross earned income and is designed to cover mandatory deductions and work-related expenses. See the Appendix D for the current percentage used in the earned income deduction. Gross earned income (including self-employment income after all exclusions) is entered in field 35 of the Food Stamp Authorization Document (EMS-233). The gross earned income will be multiplied by the current percentage. The resulting figure is the earned income deduction. The earned income deduction will be rounded up or down to the nearest dollar and entered in field 36 of the EMS-233. Field 36 (earned income deduction) will be subtracted from field 35 (total earned income) to obtain net earned income.
Example -As of 10/1/89, the percentage of the gross earned income used as the earned income deduction was 20%. If a household's gross earned income was $724, then the earned income deduction would be - $145 ($724 x 20% = $144.80 rounded to $145).
Households with only unearned income are not entitled to this deduction. It is not applied to any excluded income such as the earnings of a child or irregular income. All earned income is totaled before the earned income deduction is calculated.
Example -(This example uses 20% as the amount of the earned income deduction. This amount was effective as of 10/1/89). A household has three members working part time earning $500, $300 and $250 gross income per month respectively.
The member earning $250 gross income per month is 16 years old and a junior in high school. The earned income deduction would be calculated as follows:
$500 + 300 (exclude the 16 year old high school student's income)
= $800 gross income
$800 x 20% = $160 earned income deduction
$800 - 160 = $640 Net Earned Income
When an overpayment is calculated as explained in FSC 15400, the earned income deduction is not allowed if the household intentionally failed to report the income and the overpayment has been classified as an IPV due to the household's failure to report.
See FSC 15400 for complete instructions on handling this type of situation.
When earned income tax credits are paid as part of a household's earned income, the earned income tax credit will be excluded from the gross income before the earned income deduction is allowed.
FOOD STAMP CERTIFICATION MANUAL SECTION: DEDUCTIONS
6210 - 6300 SUBJECT: STANDARD DEDUCTION
DATE: 12-1-95
6210Farm Loss Deduction
The losses from a farming enterprise operated by a household member may be deducted from the household's other countable income. FSC 5640.1 contains instructions for applying the Farm Loss deduction.
6300The Standard Deduction
A uniform standard deduction is applied to all households regardless of size, type of income or household composition. See Appendix D for the current standard deduction.
The standard deduction is applied in the following manner on the Food Stamp Authorization document, DCO-233, when there is both earned and unearned income in the household.
1.Calculate the net earned income (field 37) by applying the earned income/deduction as described in FSC 6200 above.
2.Total all unearned income. Enter this figure in field 49.
3.Calculate gross income by adding together net earned income and total unearned income. Enter this figure in field 51.
4.Subtract the standard deduction in field 52 from the gross income (field 51). The figure obtained will be adjusted gross income. Enter this figure in field 53.
Example -The household has one member with gross earnings of $795. Two members each receive an AFDC grant of $142. The calculations which follow are based on deduction amounts in effect 12-1-95.
1.Calculate net earned income (field 37). Gross earned income $795 x 20% = $159 earned income deduction. $795 gross earned income - $159 earned = $636 net earned income.
2.Calculate total unearned income (field 49). $142 AFDC + $142 AFDC = $284
3.Calculate total gross income (field 51). $636 net earned income + $284 total unearned income = $920 gross income.
*4.Subtract the standard deduction (field 52). $920 total gross income - $134 standard deduction = $786 adjusted gross income.
**
When there is only earned income in the food stamp budget, the gross income (field 51) will consist of the amount calculated as the net earned income in field 37.
**Effective 12-1-95, the standard deduction is reduced to $134 as mandated by P.L. 104-37.
FOOD STAMP CERTIFICATION MANUAL SECTION: DEDUCTIONS
6300 - 6400 SUBJECT: DEPENDENT CARE
DATE: 12-1-95 DEDUCTION
Example:The household reports only earned income of $795. The caseworker calculates the earned income deduction as $159 and $636 as the net earned income in field 37. $636 will be entered as the total income in field 51 and the $134 standard deduction will be subtracted from this figure ($636 - $134 = $502) to obtain the adjusted gross income in field 53.
When there is only unearned income in the food stamp budget, the gross income (field 51) will consist of the amount calculated as the total unearned income in field 49.
Example:The household reports only unearned income of two AFDC checks. They total $284. $284 will be entered as the gross income in field 51 and the $134 standard deduction will be subtracted from this figure ($284 - $134 = $150) to obtain the adjusted gross income in field 53.
6400The Dependent Care Deduction
Dependent care costs are payments for the actual care of a child or other dependent person (e.g. an incapacitated adult). Payments are deductible only when necessary for a household member to:
1.Accept or continue employment; or
2.Pursue education preparatory for employment; or
3.Comply with the Project SUCCESS Employment and Training (E & T) Program requirements; or
4.For those individuals not subject to the E & T requirements, an equivalent effort to seek employment. (An individual's statement that they are seeking employment will be adequate to establish an equivalent effort.)
The dependent care deduction will include costs such as baby sitter or day care fees or the cost of an attendant for an incapacitated adult.
Dependent care costs may not exceed a maximum allowable amount determined by Federal law. See Appendix D to this manual for the current maximum allowable amount.
Example -(Based upon the maximum allowable amount of $175 per dependent effective 9/1/94.) A household reports that a member is employed. This member has two children aged 2 and older. The member pays $45 per week per child to a day care center.
Calculated prospectively, dependent care costs would be $45 x 4.334 = $195 per child reduced to the maximum allowable amount of $175 per dependent. ($175 X 2 = $350 total dependent care costs.)
FOOD STAMP CERTIFICATION MANUAL SECTION: DEDUCTION
6400 - 6410 SUBJECT: DEPENDENT CARE DEDUCTION
DATE: 5-1-93
Transitional Child Care - JOBS - Child care expenses which are reimbursed or paid by the JOB Opportunities and Basic Skills Training (JOBS) or Transitional Child Care (TCC) Programs are not deductible. A deduction will be allowed only for the portion of child care expenses not reimbursed by JOBS or TCC.
Example A: A child care payment made by TCC to the provider covers the total child care costs. The household will not have a dependent care deduction.
Example B: In a similar household with the same child care costs, the household is reimbursed by the JOBS program for one-half the total child care costs. Only the portion of the costs not reimbursed by the JOBS program will be allowed as a dependent care deduction.
Any reimbursements made by TCC or JOBS to the household will not be counted as income (FSC 5411 #3).
6410Documentation and Verification of Dependent Care Costs
At a minimum the following documentation of the dependent care deduction must appear:
1.The amount of the dependent care payment;
2.The frequency of the expense/bill - i.e. weekly, bi-weekly or monthly; and
3.The name, address and telephone number of the provider of the dependent care.
At any case action, dependent care costs need be verified only if information regarding these costs is considered incomplete, inaccurate, inconsistent, or outdated. If verification is requested the caseworker will also document:
1.The reason the payment was considered inaccurate, incomplete, inconsistent or outdated; and
2.The source of the verification (example - phone call to Kiddie Kare Director, Mrs. John Smith, verified the amount billed as $35 per week).
If the household does not supply the needed verification of dependent care costs within the specified time frames, the case action (application approval, change processing etc.) will not be delayed solely to obtain this verification. The case will be processed without including the declared dependent care costs. (NOTE: If at application, eligibility is dependent upon the inclusion of dependent care costs, the application may continue to be held for up to 60 days
FOOD STAMP CERTIFICATION MANUAL SECTION: DEDUCTIONS
6410 - 6500 SUBJECT: MEDICAL DEDUCTION -
DATE: 2-1-92 ENTITLEMENT
awaiting this verification.) If the verification is later provided, the dependent care costs will be included in the household's budget. This action will be handled as a change and will be processed in accordance with the timeliness standards in FSC 11300. The date upon which the verification was supplied will be considered the date the change was reported.
6500Medical Deduction
A medical deduction is that portion of allowable medical expenses in excess of $35 per month incurred by household members who meets the definition of a disabled individual specified in the Glossary, definition of "Aged/Disabled".
Each household member is evaluated individually for entitlement to the medical deduction. Spouses of aged/disabled members are not entitled to have their medical expenses deducted unless they meet at least one of the criteria in their own right. The medical expenses of members receiving benefits as dependents of the SSI, Social Security or VA recipient are not deductible unless the dependent meets one of the criteria.
Example:Mr. Carter, age 45, receives Social Security disability benefits. His wife, age 40, receives a Social Security check as the mother of his three children ages 17, 14, and 12. Mrs. Carter also receives a Social Security check as the payee for her children. Neither Mrs. Carter nor any of the three children are disabled. However, there is a two year old grandchild in the home who is retarded. Mrs. Carter is the payee for an SSI check for this child. Only medical expenses for Mr. Carter and the grandchild are deductible.
Entitlement to the medical deduction begins either in the month that an individual turns age 60, or in the month that the individual begins receiving a disability check or Medicaid benefits.
Medical expenses incurred by the household for an aged or disabled individual who was a household member immediately before entering a hospital or nursing home are allowable if the household is responsible for paying these bills. This also applies to medical expenses incurred for an aged or disabled individual who was a household member at the time of his or her death. (This includes aged or disabled individuals who die while in a hospital or nursing home if they were residing in the food stamp household immediately before entering the hospital or nursing home.)
Example:Mr. Smith, age 75, was included in his daughter's food stamp case prior to entering the nursing home. He is covered by Medicaid, but his daughter must buy three prescriptions for him each month. They total $45.00. His daughter is allowed to deduct $10 medical costs each month ($45.00 - $35.00 = $10.00) even though she is neither aged nor disabled.
FOOD STAMP CERTIFICATION MANUAL SECTION: DEDUCTIONS
6500 - 6510 SUBJECT: MEDICAL DEDUCTION -
DATE: 2-1-92 ALLOWABLE COSTS
Households in which there is no earned income, all members are eligible and each member is either aged or disabled may be assigned a certification period of up to 24 months. At the end of the first 12 month period, these households will be subject to a mid-point review. This review includes a full reassessment of the household's medical expenses. See FSC 11345 for instructions.
6510Determining Allowable Medical Costs
Each category of allowable medical costs is explained below.
1.Attendants, home health aides, disabled child care services, or homemakers - These costs are deductible when such services are necessary due to the age, disability, or illness of the aged or disabled member.
In addition to the salary paid, an amount equal to the maximum food stamp allotment for one person will be deducted if the household incurs the cost of providing the attendant (or attendants) with more than 50% of the meals served in the household in a month. For example, a household may have two attendants who come each day. Therefore, the household is providing a meal to an attendant at each meal time. This household would be entitled to deduct the full coupon allotment for one person even though neither attendant takes more than 50% of his or her meals in this home in a month's time.
The food stamp allotment for this meal-related deduction is the one-person allotment in effect at the time of the household's certification (initial or recertification). If a coupon allotment change (NBI) occurs, the county office is not required to update this deduction until the next scheduled recertification or mid-point review but may choose to do so sooner.
If a household incurs costs for an attendant which could either be deducted as a dependent care expense or a medical expense, the costs will be handled as a medical expense. If a mother pays dependent care costs for two or more children and not all the children are disabled, then the portion of the expense identifiable as care for the disabled child or children will be allowed as a medical expense. If the portion of the cost paid for the care of the disabled child or children is not identifiable, the entire child care expense will be allowed as a dependent care deduction as specified in FSC 6400.
2.Corrective Devices - Examples are:
-Dentures - full or partial;
-Braces worn on the teeth for orthodontic purposes;
-Eye glasses and contact lenses prescribed by a physician skilled in eye diseases or by an optometrist;
-Hearing aids (including batteries for the operation of the hearing aid);
-A prosthesis; or
FOOD STAMP CERTIFICATION MANUAL SECTION: DEDUCTIONS
6510 - 6510 SUBJECT: MEDICAL DEDUCTION -
DATE: 4-1-90 ALLOWABLE COSTS
-Corrective braces to be worn on the limbs.
3.Hospital and nursing home care - This includes costs incurred during confinement or out-patient care by a medical facility such as a hospital or nursing home recognized by the State.
Such costs include, but are not limited to:
-Room and board charges;
-Nursing care;
-Drugs and medical supplies;
-Therapy;
-Surgery; and
-Tests.
Non-medical charges such as television rental fees are not allowed.
NOTE:Costs incurred for an aged/disabled individual who was a member of the household immediately prior to entering the hospital or nursing home are allowable if the household is responsible for the costs. The caseworker must insure that a code 1, 2 or 3 appears in Field 63 of the EMS-233 when such costs are to be allowed.
4.Insurance - Health and Hospitalization Policy Premiums -
This includes payments for aged/disabled members:
-For medical and hospital insurances;
-For cancer and intensive care insurances; and
-For premiums deducted from paychecks for medical insurance.
Some health insurance policies cover household members who are not entitled to a medical deduction as well as those who are. When the amount of the premium paid for the members entitled to a medical deduction cannot be determined, the premium will be prorated among all members included on the policy. The prorated amount for one member will be multiplied by the number of members entitled to a medical deduction. The resulting amount will be considered a medical cost.
Exceptions:Do not allow health and accident policies such as those payable in lump sum settlements for death or dismemberment. Do not allow income maintenance policies such as those which continue mortgage or loan payments while the beneficiary is disabled.
5.Medicaid Cost Sharing These are medical expenses incurred by aged/disabled Medicaid recipients which are not covered by Medicaid.
FOOD STAMP CERTIFICATION MANUAL SECTION: DEDUCTIONS
6510 - 6510 SUBJECT: MEDICAL DEDUCTION -
DATE: 4-1-90 ALLOWABLE COSTS
Example:Medicaid recipients are allowed to obtain six prescriptions free of charge each month. Any additional prescription costs incurred by the Medicaid recipient are allowed as a medical expense if the Medicaid recipient is aged or disabled.
6.Medical and Dental Care - This includes a dentist's or a physician's charges for:
-Office calls;
-Hospital visits;
-Nursing home visits;
-House calls;
-Special treatments;
-Tests; and
-Other medical procedures.
This also includes other services provided by a licensed practitioner or other qualified health practitioner such as:
-Psychotherapy;
-Rehabilitative services; and
-Chiropractic services.
7.Medical Equipment and Supplies - This includes costs such as:
-Needles and syringes used for the injection of insulin or prescription medication;
-Costs for the purchase of sickroom supplies such as bandages and gauze for a surgical patient or bed pads and protective linens for bedfast patients;
-Costs for the lease or purchase of medical equipment such as crutches, wheelchairs, hospital beds and portable oxygen tanks.
-Costs for the purchase, maintenance, and training of seeing eye dogs for the blind. This includes the cost of food and veterinarian's bills for the dog. If a deaf person is otherwise aged or disabled, the costs of the purchase, maintenance and training of a dog used to "hear" for the deaf person are also considered a medical expense.
8.Medicare Premiums - These are premiums deducted from Social Security checks or paid by certain Railroad Retirement, VA and Social Security recipients for medicare coverage under Title XVIII of the Social Security Act.
9.Prescription Drugs - This includes:
-Drugs prescribed by a licensed practitioner - e.g., doctor, dentist, chiropractor; and
FOOD STAMP CERTIFICATION MANUAL SECTION: DEDUCTIONS
6510 - 6520 SUBJECT: MEDICAL DEDUCTION -
DATE: 4-1-90 ALLOWABLE COSTS
-Over-the-counter medication recommended or approved by a licensed practitioner.
Examples of allowable over-the-counter medications are insulin for diabetics and aspirin for arthritics.
10.Transportation and lodging - This is a reasonable cost for transportation and/or lodging incurred to obtain medical treatment.
Transportation and lodging costs are determined on a case-by-case basis.
Transportation costs are based upon the type of transportation used. If the aged or disabled member uses his or her own vehicle, the current Medicaid reimbursement rate of $.09 per mile will be allowed. If the member used public transportation, the actual cost of the transportation will be allowed. If the member pays a non-household member for transportation, the amount charged by the individual will be allowed. The type of transportation used and the reason for the trip must be documented. Verification of the cost must be obtained.
Lodging may be allowed if the aged/disabled member is required to spend the night away from home to receive medical services. The reason the lodging was necessary must be documented in the case record. Verification that medical treatment did occur, as well as receipts to verify the lodging expense must be obtained.
Lodging expenses are allowable for the parent or parents of a disabled child who is hospitalized or receiving treatment at a site which requires the parent or parents to obtain lodging.
The cost of lodging does not include the cost of meals or other incidentals.
6520Determining the Amount of the Medical Deduction
After it is determined that a household member is entitled to a medical deduction, and that this member has incurred a medical cost, then the amount of the allowable medical deduction will be determined.
The amount of the allowable medical deduction is determined by totaling the allowable medical expenses of all aged/disabled household members and then subtracting the $35 benchmark. There are several factors which must be considered before allowing any medical deduction.
FOOD STAMP CERTIFICATION MANUAL SECTION: DEDUCTIONS
6520 - 6521 SUBJECT: MEDICAL DEDUCTION -
DATE: 5-1-95 DETERMINING DEDUCTION AMOUNT
1.How often is the expense incurred?
2.Will the expense be reimbursed?
3.Is the expense past due?
The budgeting procedures in FSC 6525 and the documentation procedures in FSC 6526 will be used for all households entitled to a medical deduction. See FSC 11640 for special instructions on handling cases certified for longer than 12 months.
6521Factor One - How Often is the Expense Incurred
Medical expenses are normally those expenses that the household expects to continue incurring each month; however, medical expenses which the household only incurs once or incurs periodically are also allowable and may either be averaged or deducted completely in the month incurred as the household chooses.
Expenses Incurred Each Month - Monthly medical expenses are costs such as prescription drugs purchased at least once per month, monthly rental payments on medical equipment, visits to a physician made at least once per month, and Medicare premiums.
Example:Mrs. Casey, age 61, declares the following medical expenses:
1.A prescription drug filled twice per month at $22.40 per bottle.
2.A monthly visit to the doctor at $20.00 per visit and taxi fare of $10.00 for the round trip.
3.A blood test done once per month at $25.00 per test.
4.Hospitalization insurance premium paid once per month at $47.50 per month.
Mrs. Casey provided receipts which indicate that she has incurred these expenses for the last six months. She stated that she expects to continue paying these expenses each month. Her expenses are calculated as follows:
$22.40 x 2 = $ 44.80 for drugs
$ 20.00 for the doctor's visit
$ 10.00 for taxi fare to the doctor's office
$ 25.00 for the blood test
$ 47.50 insurance premium
$147.30 total monthly medical expenses
FOOD STAMP CERTIFICATION MANUAL SECTION: DEDUCTIONS
6521.1 - 6521.2 SUBJECT: MEDICAL DEDUCTION -
DATE: 5-1-95 PERIODIC EXPENSES
6521.1Expenses Incurred Periodically
Medical expenses which are not incurred every month, but which can be expected to be incurred periodically may be allowed in the food stamp budget if they are:
a.Regularly recurring (e.g. expenses such as medication purchased every other month or insurance incurred quarterly); and
b.Reasonably anticipated (e.g. the client expects to return to a doctor for a visit once every six weeks).
The household may choose to average these expenses or to have them deducted in the month the household is billed for the cost.
Example 1 -Mr. Smith pays a premium for hospital insurance once every six months. The total premium is $146. He chooses to have this cost averaged.
$146 premium - 6 months = $24.33 cost per month.
Example 2 -Mrs. Jones returns to the chiropractor every three months for treatment. The cost is $50 per treatment. She chooses to have the cost deducted when she is billed because she has no other medical expenses. Her period of certification is set for 12/85-11/86. She reports a $50 cost on 3/15/86. Her budget is adjusted for the month of April only.
6521.2One-Time Medical Expenses
One-time medical expenses are those which the household does not expect to recur. Examples of one-time medical expenses are hospital costs, the cost of purchasing medical equipment such as crutches, visits to the doctor when no additional visits and/or treatments are required, and glasses or dentures.
One-time medical expenses not paid in installments are allowable at initial application for aged/disabled households if the expense is incurred or payment becomes due during the month of application.
Example:Mr. and Mrs. Scott, both age 60, apply for food stamps for the first time on March 29. They report that they both got new prescription glasses on March 15. The total cost paid on March 15 was $300. They also report that on February 3, Mr. Scott got a new hearing aid. The total cost paid on February 3 for the hearing aid was $125.
FOOD STAMP CERTIFICATION MANUAL SECTION: DEDUCTIONS
6521.2 - 6521.2 SUBJECT: MEDICAL DEDUCTION -
DATE: 5-1-95 ONE-TIME EXPENSES
The cost of the glasses is allowable.
The cost of the hearing aid is not allowable.
Currently certified households are required to report changes in medical expenses only at the time of a mid-point review. However, if the household reports a change in medical costs; the county must process the change within 10 days. (See FSC 11410.) One-time changes reported any time during the certification will be allowed so long as this expenses has not already been allowed.
Example:Mrs. and Mrs. Randolph, both age 63, are certified for 2/90 - 1/91. They report on 5/15/90 that Mrs. Randolph was treated at the emergency room on 4/26/90, and that they received and paid the bill on 5/10/90. The bill was for $110. On the same Change Report Form, they reported that Mr. Randolph went to the doctor and received treatment for the flu on 3/10/90. The doctor bill was $25.00 plus $15.00 in prescription bills. Mr. Randolph paid cash to both the doctor and the drug store on the day of the visit. All of these medical costs are deductible.
If the medical expense is incurred too late in the certification period to be deducted before recertification, the expense will be allowed in the subsequent certification.
Example:Mr. Phillips, age 61, is certified for 12/89 - 6/90. On 5/25/90 he received a bill for $40 for extraction of a tooth and reported this during his recertification interview on 6/4/90. He chooses to deduct this amount during the month of July which is the first month of his new period of certification.
A one-time expense may either be averaged forward over the period of certification or deducted in the month incurred (the month the bill was received). If a currently certified aged/disabled household reports a one-time medical expense and chooses to average the expense, the amount will be averaged forward over the months remaining in the period of certification, not to exceed a period of 12 months.
Example:Mr. Bradley, age 65, is certified for 1/90 - 12/90. On 9/21/90 he reports that he purchased dentures. He provides a receipt dated 9/15/90 for $300. He chooses to average this expense. The $300 will be averaged over the three month period (Oct. - Dec.) remaining in his period of certification. $300 cost - 3 = $100 per month medical expense.
FOOD STAMP CERTIFICATION MANUAL SECTION: DEDUCTIONS
6521.2 - 6522 SUBJECT: MEDICAL DEDUCTION -
DATE: 5-1-95 ONE-TIME EXPENSES
For households assigned a certification period in excess of 12 months (as per FSC 8720, item 11), medical expenses incurred in the first 12 month period will be averaged over the months remaining in that period and one time expenses incurred in the second 12 month period will be averaged over the months remaining in that period.
The household must verify that it has been billed for a one-time expense but need not verify that it is making payments on this expense.
If a household reports a one-time medical expense which will be billed in monthly installments, the monthly installment amount will be allowable in the month due.
Example:Mrs. Benton, age 62, reports that she owes $1,000 on a hospital bill incurred in May, 1986. She has arranged to pay the hospital $100 per month on this bill beginning in June 1986. $100 per month will be the allowable cost for the ten month period - June 1986 through March 1987 - during which she will be billed for the installment payments.
One-time medical expenses paid with credit cards or loans are considered billed when the credit card statement is received or the loan payment becomes due. Expenses such as interest charges or annual membership fees on credit cards are not allowable.
Caution:Medical expenses may only be allowed once. For example, one-time medical expenses averaged over the period of certification may not be allowed again when the household actually begins making payments on the expense.
6522Factor Two - Will the Expense be Reimbursed?
A medical deduction will not be allowed for any portion of a medical expense that has been or will be reimbursed by an insurance company, Medicare, or Medicaid.
Regardless of how long it takes to obtain verification of the reimbursable portion of the medical expense, a deduction will not be allowed until this verification is obtained.
Example:Mrs. Green, age 67, incurs a hospital bill totaling $2,500 in April 1990. She reports this on her application dated April 26, 1990. She also reports that she has Medicare. She is certified on May 25, 1990 for 4/90 - 3/91. No allowance is made for the hospital bill because the amount she will be reimbursed by Medicare is not yet known. On July 5, she reports and verifies that Medicare will reimburse $2,000 of this bill. She chooses to have the $500 averaged over the rest of the period of certification. $500 is divided by eight months and $62.50 will be counted toward her household's monthly medical expense for the months of August through March.
FOOD STAMP CERTIFICATION MANUAL SECTION: DEDUCTIONS
6522 - 6524 SUBJECT: MEDICAL DEDUCTION -
DATE: 2-1-92 REIMBURSEMENTS
Negative verification will not be required if a household states that medical expenses will not be reimbursed unless the statement is questionable. For example, if a 67 year old household member declared that no reimbursement would be received on a hospital bill, this would be questionable since most people age 65 and older are covered by Medicare and/or Medicaid.
6523Factor Three - Is the Medical Expense Past Due?
Payments on past due medical expenses are not an allowable medical expense. Bills for medical expenses are considered past due for food stamp purposes when the provider indicates the bill is past due. When a household reports that a member has begun payment on a bill, the caseworker will contact the provider to determine the status of the bill unless the status can be determined from viewing the bill.
Exceptions:
1.The bill has been reported timely but not deducted since the amount of the reimbursement was not yet known.
2.Arrangements for a payment schedule had been made before the bill was classified as past due.
3.The expense has already been averaged over the period of certification.
6524Verification of Medical Expenses
At initial application and (for households assigned a certification in excess of 12 months) at the mid-point review, the amount of any deductible medical expenses (including the amount of reimbursements) must be verified. Verification of other factors such as the allowability of services provided or the entitlement of a household member to claim a medical expense will be required if the factor is questionable.
At recertification and at a reported change, previously unreported medical expenses and total recurring medical expenses which have changed by more than $25.00 must be verified. Medical expenses which are unchanged or changed by $25.00 or less will not be verified unless information regarding these expenses is incomplete, inaccurate, inconsistent or outdated.
If the household declares a medical expense which must be verified, but chooses not to verify it at any case action, the client's decision must be documented in the case record.
An initial application, an application for recertification or a mid-point review will not be held beyond the time allowed for normal processing solely for the purpose of obtaining required verfication of medical expenses if the household is otherwise eligible. The household will be advised that the case was processed without the medical expense and that it may furnish this required verification at a later date. When the household does provide verification of the medical expense, the expense will be deducted, and the allotment adjusted according to the timeliness standards for a reported change.
FOOD STAMP CERTIFICATION MANUAL SECTION: DEDUCTIONS
6524 - 6525 SUBJECT: MEDICAL DEDUCTION -
DATE: 7-1-93 VERIFICATION
See FSC 8500 for processing standards for initial applications.
See FSC 10600 for processing standards for timely filed recertifications.
See FSC 10700 for processing standards for untimely recertifications.
See FSC 11451 for processing standards for reported changes.
6524.1Suggested Sources of Verification for Medical Expenses
These are:
-Bills, receipts, and/or statements received by the households;
-Collateral contacts with providers including letters and/or telephone calls; and
-Insurance policies and/or benefit cards.
6525Calculation of the Medical Deduction
The following steps will be completed when determining the household's medical deduction:
Step 1 - Determine if any aged or disabled household member has any allowable medical costs. See FSC 6500-6510.
Step 2 - Determine if any of the allowable medical costs are past due. See FSC 6523. Disregard those medical costs classified as past due.
FOOD STAMP CERTIFICATION MANUAL SECTION: DEDUCTIONS
6525 - 6525 SUBJECT: MEDICAL DEDUCTION -
DATE: 2-1-92 CALCULATION
Step 3 - Determine if any portion of the allowable medical costs are to be reimbursed. See FSC 6522. Allow no deduction for reimbursable costs until the amount of the reimbursement is verified. Disregard any portion of the medical cost which has been reimbursed.
Step 4 - Determine how each medical expense is incurred - monthly, periodically or on a one-time basis.
For medical costs incurred each month, determine if the cost is expected to stop or to change. See FSC 6521.
For medical costs incurred periodically, determine if the household wishes to average the costs or deduct them in the month incurred. See FSC 6521.1.
For medical costs incurred on a one-time basis, determine if the expense was reported timely. If yes, determine if the household wishes to average the cost forward over the period of certification or to deduct it in the month incurred. In the event that the household is certified for more than 12 months, it must be determined if the household is in its first or second segment of the certification period and how many months remain in that segment. See FSC 6521.2.
Step 5 - Determine the household's total anticipated monthly medical expense. Add together the anticipated continuing monthly expenses, and any averaged periodically incurred or one-time expenses.
Step 6 - Subtract the $35.00 benchmark.
Example 1 -Mr. and Mrs. Washington both receive Social Security disability payments. They have declared and verified the following medical expenses:
Mr. Washington -
Prescription drugs - $54.48 monthly
Medicare - $31.90 monthly
Medical Insurance - $90.00 quarterly
Mrs. Washington -
Medicare - $31.90 monthly
Medical Insurance - $90.00 quarterly
Payment on Hospital
bill - $25.00 monthly
FOOD STAMP CERTIFICATION MANUAL SECTION: DEDUCTIONS
6525 - 6526 SUBJECT: MEDICAL DEDUCTION -
DATE: 2-1-92 DOCUMENTATION
The monthly expenses are:
Drugs - $54.48
Medicare (31.90 x 2) - $63.80
Insurance
($90 + $90 - 3) - $60.00
Hospital bill - $25.00
$203.28 Total
-35.00 Benchmark
$168.28 ($168 rounded)
The medical deduction calculated will be entered in field 55 of the Food Stamp Authorization Document (EMS-233). This deduction (and the dependent care deduction if applicable) will be subtracted from the adjusted gross income (field 53) to arrive at the adjusted income (field 56).
Example 2 -Mrs. and Mrs. Washington's adjusted gross income is $450. Their medical deduction as calculated in example 1 above is $168.
$450 adjusted gross income
-168 medical deduction
$282 adjusted income
6526Documentation of Medical Deductions
All medical deductions will be documented in enough detail so that a reviewer can determine exactly how the deduction was calculated. At a minimum the following information must be documented.
1.The name of the member who incurred the expense.
2.The type of expense - i.e., prescription drug, transportation cost, doctor's visit, etc.
3.Identifying information about the specific expense and the verification obtained for the expense. Examples - Receipt dated 6/25/89 - Dr. Jones - $20.00, receipt dated 6/26/89 - Main Drug Store - RX 43210 - Digitalis - $15.00, bill dated 7/1/89, Dr. Smith - dentures - $300.
4.If a medical expense is verified at recertification or reported change, document why the verification was required. Example - Mrs. Jones' total medical expenses have increased by $50; therefore, verification of all expenses is being requested.
5.Whether or not the expenses are reimbursable. If the expense is reimbursable, state approximately when the household expects reimbursement.
NOTE:Do not allow any portion of the expense which will be reimbursed until the reimbursement is received.
See FSC 6522.
FOOD STAMP CERTIFICATION MANUAL SECTION: DEDUCTIONS
6526 - 6526 SUBJECT: MEDICAL DEDUCTION -
DATE: 2-1-92 DOCUMENTATION
6.The figures used in the calculation of the medical deduction. Identify any averaged expenses and indicate the figures used to calculate the averaged expense. Example - bill dated July 1, Dr. Smith - dentures $300 - 6 months = $50.
Also identify monthly and periodically incurred expenses and indicate why they were allowed - i.e., attached copies of bills were used as an indication of medical expenses expected by the household to continue through the period of certification.
7.The fact that the household chooses not to verify medical expenses or to delay verification until after certification, if this option is chosen.
FOOD STAMP CERTIFICATION MANUAL SECTION: DEDUCTIONS
6550 - 6551 SUBJECT: CHILD SUPPORT
DATE: 6-1-96 DEDUCTION
6550Child Support Deductions
A deduction will be allowed for legally obligated child support payments made by a household member to an individual who is not a household member. A legal obligation may be a court order that would be upheld by a judge in a court of law, an order issued through an administrative process or a legally enforceable separation agreement. Amounts paid out of the household's current income to make up for months in which the household did not meet its obligation will be deductible. Payments for child support arrearages will be allowed only if the household was legally obligated to pay the amount in arrears. The value of legally binding child support that is provided in-kind, such as payment of rent directly to the landlord will be deductible. Payments a non-custodial parent is legally obligated to make to obtain health insurance coverage for a child or children is deductible. This also includes dental insurance, cancer insurance or intensive care insurance if the parent is legally obligated to furnish this coverage. When the child is covered on a family plan and the amount paid per person cannot be determined, divide the total premium by the number of people covered. Count only the portion paid to maintain coverage for a child or children under the terms of the legal obligation.
Payments for alimony are not deductible. Child support payments made voluntarily are not deductible. This includes milk and pampers purchased for a child unless the parent is legally obligated to make these purchases. Child support payments for a child who is included in the food stamp household are deductible so long as the parent is legally obligated to pay support and it is paid to someone living outside the household. Child support payments which are above and beyond the obligated amount are not deductible. Child support intercepted from a state or federal income tax refund is not deductible.
6551Determining Amount of Child Support Deduction
The child support deduction must reflect the child support the household expects to pay during the certification period rather than the obligated amount. Exception - Child support paid on a basis less frequent than monthly (e.g. - annually or quarterly) may be averaged forward over the period the payment is intended to cover.
The amount of the child support deduction will be based on the average amount paid so long as the average amount does not exceed the obligated amount. If the court has ordered a change in the obligated amount, this change must be taken into account when establishing the child support deduction. For example, if a recent order court has increased the child support from $25 to $50 per week and the household states they will meet this new obligation, $50 per week will be anticipated as the child support payment.
For households submitting an initial application, the average must be based on at least three months payments unless there is less than three month's history. If there is less than three month's history, the average will be based on the payments made to date. If there is no payment history, the child support deduction will be based on the amount the household is obligated to pay plus the household's statement of what it intends to pay.
FOOD STAMP CERTIFICATION MANUAL SECTION: DEDUCTIONS
6550 - 6551 SUBJECT: CHILD SUPPORT
DATE: 2-1-96 DEDUCTIONS
To calculate an average amount, figure the total for each month of the selected period. Do not use a conversion factor. Add together the amounts figured for each month to get a total paid during the selected period. Divide this figure by the number of months in the selected period. When the household just began paying child support or when the obligated amount changes and an average cannot be determined, weekly and bi-weekly amounts will be converted to a monthly figure using 4.334 or 2.167 respectively.
For example, a household submits an initial application in September. A household member makes legally obligated child support payments. To calculate the child support deduction, complete the following steps.
1.Calculate monthly totals. Do not use a conversion factor.
June July August
6/2 - $ 25 7/7 - $ 25 8/4 - $ 25
6/9 - 25 7/14 - 25 8/11 - 25
6/16 - 25 7/21 - 25 8/18 - 25
6/23 - 25 7/28 - 25 8/25 - 25
6/30 - 25
Total - $125 Total - $100 Total - $100
2.Add together the monthly totals.
June - $125
July - 100
August - 100
$325
3.Divide by three.
$325 / 3 = $108.33 rounded to $108.
Note:When child support payments are anticipated based solely upon the obligated amount and the household's statement (see paragraph 3 of this section), weekly and bi-weekly payments must be converted. See FSC 7513.1 - 7513.2.
If the household states it will pay less than the obligated amount, the lesser amount will be deducted. In no instance will the amount deducted exceed the obligated amount.
For households, submitting a subsequent application, the average will be based on the child support paid during the previous certification period with appropriate adjustments for any change in the amount of obligation.
FOOD STAMP CERTIFICATION MANUAL SECTION: DEDUCTIONS
6551 - 6552 SUBJECT: CHILD SUPPORT
DATE: 6-1-96 DEDUCTIONS
See FSC 1622.9, 1623.1 and 1623.2 for instructions on calculating the child support deduction for households with disqualified members.
6552Verification of Child Support Payments
At initial application both the obligation to pay child support and the amount of deductible child support paid must be verified. The household will be the primary source of verification of the legal obligation to pay child support, the amount of the obligation, and the amount paid. Any document that verifies the obligation to pay child support such as a court order, administrative order, or legally enforceable separation agreement would be sufficient verification of the obligation and obligated amount. However, documents used to verify the household's legal obligation to pay child support will not be acceptable verification of the household's actual payment. Acceptable verification of amounts paid would include canceled checks, wage withholding statements, verification of withholding from unemployment compensation, and statements from the custodial parent regarding direct payments or payments the noncustodial parent pays or expects to pay on behalf of the custodial parent. For payments made through the Office of Child Support Enforcement may be verified through the WTFC screen or other OCS screens. See DCOUM, Appendix E.
Payments for child support arrearages must be verified. Both the legal obligation to pay arrearages and the amount of payment must be verified. Arrearages can be verified through the person receiving the child support, through each person's attorney, through OCSE, through private collection agencies, or through any other documentary evidence (e.g., court orders).
At each recertification and when a quarterly report is processed the amount of child support paid must be verified. The obligation to pay child support must be reverified only if the household reports a change in the obligated amount. If the household reports a change in the obligation to pay child support, both the obligation and the amount of child support paid must be verified.
An initial application or an application for recertification will not be held beyond the time allowed for normal processing solely to obtain required verification of deductible child support payments if the household is otherwise eligible. The household will be notified that its case was processed without the child support deduction and that verification of child support may be supplied at a later date. When the household does provide verification of the child support payment, the expense will be deducted and the allotment adjusted according to the timeliness standards for a change reported by an occassional reporter. See FSC 11410.
FOOD STAMP CERTIFICATION MANUAL SECTION: DEDUCTIONS
6600 - 6610 SUBJECT: EXCESS SHELTER DEDUCTION -
DATE: 4-1-90 ALLOWABLE SHELTER COSTS
6600The Excess Shelter Deduction
The excess shelter deduction is the amount of the household's allowable shelter costs in excess of 50 percent of the household's adjusted food stamp income. The household's adjusted food stamp income is their income after all other allowable deductions - earned income, standard, dependent care and medical.
Unless the household contains an aged or disabled member, the shelter deduction cannot exceed a maximum allowable figure. See Appendix D for this figure.
See the Glossary, definition of "Aged/Disabled".
Households with an aged or disabled member may deduct all shelter costs in excess of 50 percent of its adjusted food stamp income.
6610Allowable Shelter Costs
A shelter is defined as a household's principal place of residence. Only the following items will be considered allowable shelter costs.
1.Continuing charges for the shelter occupied by the household.
This includes rent or continuing charged leading to the ownership of the shelter. Such charges may be mortgage payments, payments of liens against the property (e.g. second mortgages made to repair the home or personal loans made using the property as collateral) or payments on loans for the purchase of a mobile home. Interest on all such payments will also be allowable.
When a household moves into a new residence and must pay the "first and last month's rent", both month's rent will be allowed as a shelter cost in the month in which the household is billed for the two months of rent.
2.Property taxes on the household's shelter. This includes State and local assessments as well as voluntary road or other improvement taxes. Identifiable personal property or real estate taxes on mobile homes used as a permanent residence will also be allowed.
FOOD STAMP CERTIFICATION MANUAL SECTION: DEDUCTIONS
6610 - 6610 SUBJECT: EXCESS SHELTER DEDUCTION -
DATE: 4-1-90 ALLOWABLE SHELTER COSTS
NOTE:Personal property taxes other than those on mobile homes used as a permanent residence are not allowable.
Under the Homestead Tax Act, households in some counties may be reimbursed for part or all of their real estate taxes. Since the date of receipt or the amount of reimbursement cannot be anticipated, the full amount of the real estate tax bill incurred will be allowed as a shelter cost.
3.Insurance on the household's shelter. Insurance on the structure itself but not separate costs for insuring furniture or personal belongings are allowable. If homeowner's insurance is sold as a "package" and the company does not identify the portion of the premium paid for coverage on the contents of the home, the entire premium is allowable. The case record must contain documentation to this effect.
Membership charges paid to organizations offering insurance to members are not allowable.
4.Utility costs. Allowable utility costs include:
a.The cost of cooking fuel;
b.The cost of heating fuel;
c.The cost of cooling (a verifiable utility expense relating to the operation of air conditioning systems, room air conditioners, or evaporative [water] coolers);
d.The cost of electricity;
e.Water and sewer costs;
f.Garbage and trash collection fees;
g.The basic service fee for one telephone as shown on the telephone bill including tax on the basic fee; and
h.Fees charged by the utility provider for initial installation of the utility.
One time deposits on any utility are not considered installation costs and will not be included as a shelter cost.
The amount of the basic service fee for one telephone will generally be the fee that appears on the client's telephone bill. If the amount appears high in the judgment of the worker, verification of the services covered in the basic fee may be requested.
FOOD STAMP CERTIFICATION MANUAL SECTION: DEDUCTIONS
6610 - 6610 SUBJECT: EXCESS SHELTER DEDUCTION -
DATE: 10-1-95 ALLOWABLE COSTS
When a household member receives two telephone bills (e.g., one from Southwestern Bell and one from AT&T), the worker will examine both bills to determine the total allowable basic fees and taxes on such fees. Basic fees will include charges for line access (including mileage charges) and for leasing of equipment for one telephone. Long distance charges are not allowable. Fees to companies specializing in reduced rate long distance call service are not allowable. When a household has "Lifeline Service", charges for local calls in excess of the number permitted will not be allowable. The reduced basic service fees such households incur will be allowable.
5.Shelter costs for a home temporarily unoccupied by its owners. Shelter costs will be allowed for those homes that are temporarily unoccupied by the owners because of employment or training away from home, illness or abandonment caused by a natural disaster or casualty loss.
In order to include the costs of a home temporarily unoccupied by the owners, all four of the following criteria must be met:
-The household must be incurring these shelter costs;
-The household must intend to return to the home;
-The home must not be leased or rented during the absence of the owners; and
-If there are occupants currently in the home, these occupants must not be claiming the shelter costs for food stamp purposes.
Verification. If a household claims expenses for a temporarily unoccupied home, the worker will verify the household's actual utility expenses for the unoccupied home in every case and will not use the standard utility allowance.
6.Charges for Repair of Home. Charges for the repair of the home which was damaged or destroyed due to a natural disaster such as, but not limited to, a fire or a flood are deductible when such charges are billed or otherwise become due. Shelter costs will not include charges for repair of the home that have been or will be reimbursed by private or public relief agencies, insurance companies, or from any other source.
*7.For homeless households, a shelter estimate of $143. A home-less household, as defined in FSC 1850, is composed entirely of homeless individuals. All homeless households, including those residing temporarily with another household but qualifying for separate household status as per FSC 1630, will be eligible to use a shelter estimate of $143 as the household's total shelter cost if the household reasonably expects to incur shelter costs during the month. Households residing temporarily with another household must pay the other household for shelter in order to qualify for the shelter estimate.
If the household verifies its actual costs are higher than $143, the household may use its actual costs rather than the standard.
FOOD STAMP CERTIFICATION MANUAL SECTION: DEDUCTIONS
6610 - 6621 SUBJECT: EXCESS SHELTER DEDUCTION -
DATE: 9-1-94 UTILITY STANDARD
If a homeless household has difficulty in obtaining traditional types of verification - e.g., rent receipts or receipts for utility bills, the caseworker may use collateral contact to verify actual shelter costs. Or, in the case that a homeless household has declared shelter costs which are comparable to costs incurred by other homeless households, no verification need be required. (Example, a household resides in a shelter with a basic charge known to the county office.)
6620Explanation of the Utility Standard
The utility standard is a predetermined amount which eligible households may elect to use in their food stamp budget to calculate their total shelter costs. When the utility standard is used in the budget, no actual utility costs are considered regardless of whether the costs are more or less than the standard amount.
There are restrictions on which households may elect to use the utility standard. There are restrictions on how often eligible households may switch from using the utility standard to using actual costs even if the actual costs exceed the standard amount.
6621Determining Which Households May Choose to Use the Utility Standard
Generally, a household is entitled to elect to use the standard if it incurs a cost for its primary source of heating or an air conditioning cost separate from its rent or mortgage payment. (See "Specific Costs" below for further explanation). The regularity of the heating and/or air conditioning costs is not a factor in determining whether the household may elect to use the standard as long as the household has costs during the season(s) that correspond to the billed periods. In both examples below the household is entitled to elect the utility standard.
Example 1 -A household does not have an air conditioner but incurs a cost for butane gas used for space heaters throughout the house. The space heaters are the household's primary source of heat.
Example 2 -A household rents an apartment where all utilities are furnished except electricity and that household uses an electric powered air conditioner.
Households billed only for phone, water, sewer, garbage, or any combination of these, are not entitled to elect to use the utility standard. Households not entitled to elect to use the utility standard may claim any actual utility costs incurred separately from rent or mortgage payments.
See FSC 6625 - 6626.2 when determining entitlement to the standard for a household which receives a utility assistance check.
FOOD STAMP CERTIFICATION MANUAL SECTION: DEDUCTIONS
6621.1 - 6622 SUBJECT: EXCESS SHELTER DEDUCTION -
DATE: 4-1-90 UTILITY STANDARD
6621.1Specific Costs
Heating - A household which incurs the full cost for its primary source of heating separate and apart from its rent or mortgage costs is entitled to elect the utility standard. Incurring a cost only for supplemental heating (such as but not limited to, space heaters in bathrooms, electric blankets, heat lamps, or cook stoves) does not qualify a household for the standard. Incurring only a cost for an electric blower for an oil or gas furnace does not qualify a household for the standard either.
The cost of wood is an allowable shelter cost. When wood is used as the primary heating source, the cost of purchasing wood does qualify the household for the standard. If a household purchases some wood and cuts the rest, that household will qualify for the standard. Costs associated with cutting wood such as hiring labor, the purchase of a chain saw, or the purchase of gas for running the saw are not allowable shelter costs nor do they entitle a household to elect the utility standard.
Cooling - A household which incurs the full cost of running a central air conditioning unit, a room air conditioner, or a water cooler (evaporative cooler) is entitled to elect the utility standard. Incurring only a cost for running a fan (including attic fans) does not qualify a household for the standard.
If a household has an air conditioner but does not use it, they do not incur a cost. Therefore, this household would not qualify for the standard based on cooling costs. Use of an air conditioner on an as-needed basis will qualify a household for the standard.
6622Choosing Between the Utility Standard and Actual Utilities
At certification and each recertification the household will be offered the option of using actual utility costs or the utility standard in their food stamp budget. (This applies only to households qualified for the utility standard as per FSC 6621). The household will be allowed to switch between the actual utility costs and the standard one additional time during each twelve month period.
Example:A household is certified in January using the utility standard and is recertified in March, June and September. The household may elect either the actual or utility standard at each recertification and switch one additional time during the period January - December.
If the household becomes ineligible for the utility standard during any certification period, actual utilities will be allowed for the remainder of the certification period or until the household is again eligible to elect the utility standard. Changing a household from the standard to actual when the household is no longer eligible for the
FOOD STAMP CERTIFICATION MANUAL SECTION: DEDUCTIONS
6622 - 6623 SUBJECT: EXCESS SHELTER DEDUCTION -
DATE: 11-1-90 UTILITY STANDARD/ACTUAL COSTS
standard will not be considered a "switch" since the household has no choice. However, if the household becomes entitled to the standard again during a certification period, the household may elect the standard if the household has not been previously granted a switch within a certification period during the designated twelve month period.
A household that is not entitled to the utility standard at initial certification will be granted actual utility costs. If the household becomes eligible for the standard, then the household may make a choice. When the choice is made, the household's twelve month period begins. During the twelve month period the household may switch between the actual and the standard at each recertification and one additional time.
The twelve month period is a continuous period which does not require participation in the program during each month of this period.
NOTE:The limits on switching to or from the utility standard apply to both monthly reporting households and non-monthly reporting households.
The household's decision about whether to use actual utilities or the utility standard will be documented on the EMS-220, "Food Stamp Application". At a minimum the date of the decision and the date a switch is made will be entered on the Face Sheet.
6622.1Use of the Utility Standard by Expedited Households
There are special provisions which apply to the choice of the utility standard by households entitled to expedited service.
If an expedited household chooses to use actual utility expenses but verification of the actual expenses is not available within the expedited time frames, the household will be certified using the utility standard if it is entitled to elect the standard as specified in FSC 6621. The household may be certified for the following months using actual utility costs. This will not be considered a "switch" since the household has chosen to use actual expenses.
If an expedited household chooses to use the utility standard at the expedited certification and later wants to verify and use actual expenses, that would constitute a switch.
In the absence of any indication of whether the household chose actual expenses or the utility standard, it should be assumed that the household has chosen to use actual expenses for the months of the certification period following the initial expedited service month.
6623Using Actual Utility Costs
Households who do not qualify for the utility standard may use their actual costs. Households who are qualified for the utility standard may choose to use actual costs.
FOOD STAMP CERTIFICATION MANUAL SECTION: DEDUCTIONS
6623 - 6624 SUBJECT: EXCESS SHELTER DEDUCTION -
DATE: 11-1-90 SHARED UTILITY COSTS
The caseworker will use the household's allowable utility costs in the food stamp budget. See FSC 6610, number 4, for an explanation of the allowable utility costs.
6624Allowable Utility Expenses for Households Who Share Costs
A household that shares a residence and utility costs with other individuals will be entitled only to a pro-rata share of the utility standard. (The utility standard will be divided equally among the individuals who contribute toward the utility costs). However, such households may use their actual costs.
The utility standard will not be prorated for households who live in two structures (e.g. a house with a mobile home in the back yard), but share utility costs (have one meter for both structures).
Households living in separate apartments or dwellings but sharing utility costs are either entitled to the entire utility standard or no part of the utility standard. When households live separately but share the same meter(s), the household which is actually billed is entitled to use the utility standard. The other household is entitled to actual costs. However, if each household is billed for a utility cost which entitles it to use the utility standard, each household is entitled to use the standard.
EXAMPLE 1: Two households live in a duplex. There is only one meter for the utilities. Household A receives all the utility bills. Household B gives Household a the money to pay her share of the utility costs and Household A pays the bills. Household A is entitled to use the utility standard. Household B is entitled to use her actual costs.
EXAMPLE 2: Two households live in separate structures but share a butane tank. Each household has its own meter for electric costs, pays its own electric bill and has an air conditioner. Both households are entitled to use the utility standard.
EXAMPLE 3: A landlord owns 5 trailers parked in one trailer park. There is one central meter for utility cost - gas, water and electricity. The landlord divides each utility cost by five and bills the tenants for these costs. None of the tenants who will receive food stamps will be allowed to use the utility standard, but may use their actual costs.
Renters and homeowners who live in separate residences are entitled to the entire utility standard if they receive a Low Income home Energy Assistance Payment (HEAP) for their current residence. See FSC 6626. See FSC 6626.1 for an explanation of how other energy assistance payments affect entitlement to the utility standard.
NOTE:When entering prorated standard utility allowance amounts on the EMS-233, "Food Stamp Authorization Document", enter the prorata amount in field 60. Enter a code "A" in field 59. These amounts will not be affected by any automated changes.
FOOD STAMP CERTIFICATION MANUAL SECTION: DEDUCTIONS
6624 - 6626.2 SUBJECT: SHELTER DEDUCTION -
DATE: 5-1-95 VERIFICATION AND DOCUMENTATION
The new prorated utility allowance amount will be entered on the EMS-233 and the budget recalculated at the next case action (change or recertifi- cation). No supplements or restorations will be authorized due to this change.
6625Households in Public Housing and Rental Units Charged Only for Excess Utility Usage
A household living in a public housing unit which charges the household only excess utility costs will not be permitted to use the utility standard. The household may claim actual utility cost(s) for any allowable utility(s) it pays separately. This rule is also applicable to any household renting a privately owned house, mobile home, or apartment when the household is only charged excess costs.
6626Households With Utility Bills Paid by HEAP
Households that receive direct or indirect HEAP payments may elect the utility standard, if eligible for the standard in accordance with FSC 6621, 6622 and 6623, without regard to the amount of out-of pocket-expenses. A direct payment is one made to the household. An indirect payment is one paid to the energy supplier (gas or electric company) on the household's behalf.
6626.1Other Energy Assistance Payments
Households that receive energy assistance that is not provided under the HEAP program will not receive a deduction for the portion of the expense covered by the vendor or reimbursement. These payments will be prorated over the entire heating or cooling season that the payment is intended to cover. The provider of the energy assistance payment will define the seasonal period for the purpose of proration. A household receiving non-HEAP energy assistance may elect to use the utility standard as long as the household continues to incur an out-of-pocket cost for either a heating or a cooling expense. (This includes situations where reimbursements or vendor payments cover part, but not all, of a household's heating and/or cooling expense.)
6626.2Households with HUD or FMHA Utility Reimbursements
Payments or allowances made by the Department of Housing and Urban Development (HUD) and the Farmers Home Administration (FMHA) utility providers are excluded as income. (See FSC 5413.) Utility reimbursement checks paid directly to households by HUD and FMHA are excluded as income. (See FSC 5411.)
A utility expense which is reimbursed or paid by an excluded payment, including FMHA or HUD payments, is not deductible. (See FSC 6700.) Households which receive these payments will be entitled to use the utility standard only if they incur heating or cooling costs that exceed the amount of the excluded payment during any part of the year.
FOOD STAMP CERTIFICATION MANUAL SECTION: DEDUCTIONS
6626.2 - 6627 SUBJECT: SHELTER DEDUCTION -
DATE: 5-1-95 VERIFICATION AND DOCUMENTATION
Any portion of an allowable shelter cost covered by an excluded reimbursement will not be deductible. The caseworker will determine the allowable shelter costs by subtracting the HUD utility reimbursement check from the households total actual utility costs.
Example 1 - A household lives in a privately owned house. HUD pays all the rent and sends the household a $50 utility reimbursement check. The household pays a light bill of about $45 and a gas bill of about $45 per month. The household has an air conditioner and gas furnace. The household is entitled to choose the utility standard.
Example 2 - A household lives in a housing project, pays no rent, and only pays excess utility costs. The household gets a $50 utility reimbursement check, but is not entitled to choose the utility standard. (Only excess utility charges are paid by the household.)
Example 3 - A household lives in a housing project, pays no rent and get a $50 utility reimbursement check. The household's water and gas is furnished. The household must pay the electricity bill. The household uses an air conditioner. The electricity bill runs about $90 per month. The household may choose to use the utility standard.
6627Verification and Documentation of Shelter Costs
At any case action, verification of changes for the shelter occupied by the household, property taxes, or insurance will be requested only when these costs are questionable. At any case action, entitlement to the utility standard need be verified only if the household's statements regarding its primary source of heating or cooling are questionable or contradictory.
At initial application, actual utility expenses will be verified if the household's costs exceed the utility standard and result in a deduc-tion. At recertification, reported change, quarterly report or mid-point review actual utility costs which exceed the utility standard and result in a deduction will be verified if the source has changed (e.g. - the household has moved) or the amount has changed by more than $25.00. (NOTE: At reported change, mid-point review or quarterly report households are required to report changes in shelter costs only if the household moves.) Actual utility costs which are unchanged or changed by $25 or less will not be verified unless the information provided by the household regarding these expenses is incomplete, inaccurate, inconsistent or outdated. When verification of question-able information regarding shelter costs is requested, documentation of this request must appear. The reason the information was considered questionable must appear in this documentation.
If the household cannot provide verification of actual expenses before the date specified on the "Notice of Delayed Action" (DCO-206) or the "Notice of Action" (DCO-1), the caseworker will use the utility standard in the household's budget if the household is entitled to use the standard. See FSC 6621. If the household is not entitled to use the standard, all unverified utility costs will be disallowed.
FOOD STAMP CERTIFICATION MANUAL SECTION: DEDUCTIONS
6627 - 6628 SUBJECT: EXCESS SHELTER DEDUCTION -
DATE: 7-1-93 EXCESS UTILITIES/CSA, CIP/
VERIFICATION AND DOCUMENTATION
If the household wishes to claim expenses for an unoccupied home (see FSC 4410), the caseworker must verify the household's actual utility expenses for the unoccupied home in every case. In no instance will the utility standard be allowed for an unoccupied home.
If a caseworker chooses to require verification of a household's shelter costs other than actual utilities and obtaining the verification may delay the household's certification, the caseworker will advise the household that its eligibility and benefit level may be determined without the deduction of the unverified shelter cost. If the shelter cost cannot be verified within 30 days of the date of application, the caseworker will determine the household's eligibility and benefit level without providing a deduction for the unverified expense. If the household subsequently provides the missing verification, the caseworker will treat the information as a reported change and will provide increased benefits, if any, in accordance with the standards provided in FSC 11310.
The household's decision about whether to use actual utilities or the utility standard will be documented on the Food Stamp Face Sheet, DCO-275. The date of the decision and the 12 calendar month period of participation must appear. This information must be updated when necessary.
Verification of actual costs must occur before certification or if the utility cost exceeds the standard, the change exceeds $25.00, and the household will receive a shelter deduction. If a household chooses to claim actual utility costs in excess of the standard but fails to verify the costs within the mandated time frames, the worker will process the case showing no utility expenses for unverified utilities. The standard will not be automatically attributed to the household when verification is not provided. The worker will document any discrepancies in which utilities are declared but not verified.
6628Applying the Excess Shelter Deduction
The excess shelter deduction is calculated after the household's adjusted food stamp income has been determined by applying all other allowable deductions.
To apply the deduction enter the costs calculated in fields 57-60 on the Food Stamp Authorization Document (DCO-233). Total shelter costs will be entered in field 61. One-half of the adjusted food stamp income (from field 56) will be calculated and entered in field 62. The figure in field 62 will be subtracted from the figure in field 61. The result will be considered the excess shelter deduction.
Unless the household contains an aged or disabled member, the total amount deducted for the excess shelter deduction must not exceed maximum allowable. See Appendix D for the current maximum allowable amounts.
FOOD STAMP CERTIFICATION MANUAL SECTION: DEDUCTIONS
6628 - 6700 SUBJECT: EXCESS SHELTER DEDUCTION/
DATE: 6-1-96 APPLYING THE DEDUCTION
Example:The household's total shelter costs are $400 and their adjusted income is $420.
$420 adjusted income / 2 = $210
$400 total shelter - $210 (50% of adjusted
adjusted income) = $190
$190 excess shelter deduction
The excess shelter deduction will be subtracted from the household's adjusted income to arrive at their net monthly income.
The maximum excess shelter deduction for households without an aged/disabled member was $231 as of 10-1-94. The household's excess shelter deduction is $190.
$420 adjusted income
-190 excess shelter deduction
$230 net monthly income
6700Determining if an Expense Should be Deducted
Allowable medical expenses are specified in FSC 6510. Dependent care costs are specified in FSC 6400. Allowable shelter costs are specified in FSC 6610.
None of these expenses will be deductible unless the service is provided by a non-household member, and the household has made or will make a money payment for the service:
Example:Mrs. Miller has three children. Her oldest daughter is 17 and no longer attends school. Her two younger children are aged 3 and 4. Mrs. Miller pays her oldest daughter $25 per week to keep the younger children while she works. This household does not incur an expense for dependent care since the payment is made from one household member to the other. The payment will not be counted as income for the 17 year old member.
Child support payments will be deductible as specified in FSC 6550 only if the payment is legally obligated and made by a household member to an individual who is not a household member.
Allowable expenses paid with money borrowed by a household member are deductible.
The following expenses are not allowable even if incurred by the household:
1.Expenses which will be covered by an excluded reimbursement (See FSC 5411 and FSC 6626.2);
NOTE:To determine allowable shelter costs when the household receives a HUD utility reimbursement check, subtract the amount of the check from the total actual utility costs.
FOOD STAMP CERTIFICATION MANUAL SECTION: DEDUCTIONS
6700 - 6700 SUBJECT: DETERMINING IF EXPENSE
DATE: 5-1-95 SHOULD BE DEDUCTED
2.Expenses which will be covered by an excluded vendor payment (See FSC 5413); and
3.Expenses which are provided as an inkind benefit (See FSC 5406).
Example A: Mr. Logan, age 65, incurs a hospital bill for $1,500. He reports that Medicare has reimbursed $1,300 of this bill. $200 is the amount of the allowable medical expense. (See FSC 6522 for specific instructions on handling reimbursable medical bills.)
Example B: Mrs. Lee receives $200 per month child support. In addition, her ex-husband is ordered by the Court to pay her house payment of $250 directly to the bank. Since this is an excludable vendor payment, the amount of the house payment will not be shown as a shelter cost while calculating Mrs. Lee's food stamp budget.
(See FSC 5412 for an explanation of vendor payments excluded as income.)
Example C: Mr. Perry is a food stamp recipient. He lives in a trailer provided by Mr. Farmer. Mr. Farmer provides the utilities also. Mr. Farmer does not pay Mr. Perry a salary, but does allow Mr. Perry to live in a trailer in return for maintaining the property. Mr. Perry is not entitled to a shelter deduction.
Example D: Mr. Smith is behind in his rent. The landlord agrees to let Mr. Smith work out his rent at $3.35 per hour by washing cars at the landlord's used car lot. The rent is $150 per month. Mr. Smith actually works 50 hours. The landlord gives him a check for $17.50 which is the difference between the rent and the amount Mr. Smith has earned.
Since this is money applied to the household expense which would otherwise be payable to the household, the caseworker will count $167.50 as earned income in the food stamp budget. $150 will be allowed as rent.
FOOD STAMP CERTIFICATION MANUAL SECTION: DEDUCTIONS
6710 - 6710 SUBJECT: WHICH MONTH THE
DATE: 6-1-96 DEDUCTION SHOULD BE ALLOWED
6710Determining the Month the Deduction Should be Allowed
Deductions for billed expenses other than child support payments will be allowed only in the month the household is billed for the expense or the expense otherwise becomes due. This is true no matter when the household intends to pay the expense.
Example:Mr. Grant is living in a house owned by his brother. He is unemployed. When the brother is contacted, he states that Mr. Grant's rent is $150 per month. He states that Mr. Grant is not currently paying the $150 rent but will pay him when he gets a job. The caseworker will allow $150 as a rent expense in Mr. Grant's case because he is incurring the cost even though he is not currently paying it.
Recurring monthly expenses will be allowed on a monthly basis even if two bills are received in the same month due to a billing cycle.
Example:A monthly reporting household receives an electric bill on March 1 for February usage which is due on March 15 and a bill on March 31 for March usage which is due on April 15. The household would be allowed the bill due on March 15 for the budget month of March and the bill due on April 15 for the budget month of April.
Except for child support payments, amounts carried forward from past bill periods are not deductible even if included in the most recent bill and actually paid by the household. In any event, a particular expense may only be deducted once.
Example:Mr. and Mrs. Yell apply for food stamps. They report that they make a house payment of $300 per month to FHA. They present a receipt from FHA. The receipt indicates that the house payment is actually $150 and the other $150 is for an arrearage owed by Mr. and Mrs. Yell. Only $150 will be allowed as a shelter expense since this is the monthly amount incurred.
Child support paid out of the household's current income to make up for months in which the household did not meet its legal obligation is deductible. See FSC 6550-6552.
FOOD STAMP CERTIFICATION MANUAL SECTION: DEDUCTIONS
6710 - 6721 SUBJECT: PROJECTING EXPENSES
DATE: 4-1-90
Bills which include only past due amounts are not allowable.
Example:A household reports they are making a house payment of $500 to FHA. The caseworker determines that FHA has declared a moratorium period of one year. During this year the household has agreed to pay all past due amounts, but will not be required to make their regular monthly payment. The household will not be allowed a house payment as a shelter cost during this period of moratorium.
Expenses paid "in advance" are to be handled as explained in this paragraph. In the month when the household makes the advance payment, only the amount due or billed is allowed. Since the household has paid in advance and no amount will be due or billed for the subsequent months in the period covered by advance, no expense will be allowed for these months.
Example -Mrs. Jones received a $4,000 lump sum settlement on July 1, 1989, and immediately paid an entire year's rent of $3,600 or $300 per month for July 1989 - June 1990. Mrs. Jones will be allowed a $300 rent payment for July 1989. For the months August 1989 - June 1990 no rent payment will be allowed for Mrs. Jones.
6720Projecting Expenses in a Prospective Budget
When calculating a prospective food stamp budget, the caseworker attempts to project the household's expenses by considering past expenses as well as the household's statements about what they expect their expenses to be. Unless the household is reasonably sure that a change will occur, the most recent month's bills will normally be used to anticipate expenses.
6721Special Procedures for Projecting Medical Expenses
Monthly medical expenses are projected for households who are eligible for a medical deduction. (One-time and periodic expenses are handled as specified in FSC 6521.1 - 6521.2.)
The caseworker must carefully examine the household's medical bills and question the household to determine:
a.If the expense is incurred on a monthly basis, e.g., a maintenance drug purchased every 30 days;
b.If the household expects to continue incurring the cost on a monthly basis - e.g., will the household continue to visit the doctor each month; and
c.If the amount of the expense can be expected to increase or decrease - e.g., does the household expect to continue taking the same dosage of the prescription drug?
FOOD STAMP CERTIFICATION MANUAL SECTION: DEDUCTIONS
6721 - 6730 SUBJECT: AVERAGING EXPENSES
DATE: 6-1-96
Based on the household's most recent expenses plus any anticipated changes, an amount may be determined for the cost of monthly medical expenses.
6722Special Procedures for Projecting Utility Expenses
When the household is not claiming the utility standard, changes in utility expenses may be projected for the upcoming period of certification based on last year's utility bills for the same period. The expense will be updated to reflect rate increases. If only the household's most recent utility bills are available, utility cost increases or decreases during the upcoming period of certification may be projected based upon utility company estimates for the type of dwelling.
NOTE: Utility usage will not be projected by simply averaging utility bills for the last several months.
6723Special Procedures for Projecting Child Support Payments
The projection of the child support deduction will be based on the average amount of child support paid so long as the averaged amount does not exceed the obligated amount. See FSC 6551 for full instructions.
6730Averaging Expenses
Households may choose to average expenses which change from month to month.
Households may also choose to average irregularly or periodically recurring expenses as specified below.
1.Bills which are billed less often than monthly may be averaged forward over the interval between scheduled billings.
2.Bills which are billed less often than monthly may be averaged forward over the period the expense is intended to cover if there is no scheduled interval for billing
Example 1: Real estate taxes paid yearly may be averaged over a 12 month period.
Example 2: A bill received in March for a supply of butane expected to last three months may be averaged over the period March, April and May.
NOTE: Households not choosing to have expenses averaged will be allowed to deduct them in the month incurred.
FOOD STAMP CERTIFICATION MANUAL SECTION: DEDUCTIONS
6800 - 6800 SUBJECT: CHART
DATE: 6-1-96
6800 Chart
Deductions used in the Food Stamp Budget
Deduction Description Restrictions Verification
Earned Income 20% of all gross earned income The household must have earned N/A
including self-employment. income.
Designed to cover mandatory
deductions and work-related
expenses.
Farm Loss Deduction The deduction of the losses 1. The loss must have occurred N/A
incurred by a farmer from other in a farming enterprise.
income available to the household.
2. The annual gross proceeds of the
farming enterprise must equal or
exceed $1000.
Standard A predetermined amount set by N/A N/A
Federal law and uniformly applied
to all food stamp households. The
amount usually changes in October
of each year.
Dependent Care A cost incurred by the household 1. The cost must be incurred when See FSC 6410.
for the care of a child or disabled necessary for a household member
adult. to:
a. work;
b. seek work in conjunction with
the E&T requirements;
c. for non-E&T participants, make
an equivalent effort to seek
employment.
d. attend school or other training
preparatory to beginning work.
2. The costs may not exceed a
maximum allowable figure mandated
by Federal Law.
Medical The household's total allowable Only medical costs incurred by See FSC 6524.
medical costs in excess of $35.00 aged or disabled members are
per month. allowable.
Child Support Child support payments made by a Only legally obligated amounts See FSC 6550.
Payments household member to an individual are deductible.
who is not a household member.
Excess Shelter The amount of the household's Shelter costs may not exceed See FSC 6627.
allowable shelter costs in excess a maximum allowable figure
of 50% of the household's income mandated by Federal law.
after all other allowable
deductions. Exception - This restriction
does not apply to households
For purposes of determining with aged or disabled members.
allowable utility costs, eligible Such households are allowed to
households may elect the standard deduct all excess shelter costs.
utility allowance or may use their
actual costs.