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FSC
Manual 07/01/03
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6100
Summary
When calculating a food stamp budget, a
county office worker must determine which deductions will be used in that budget.
There is one deduction that is uniformly used in every budget calculated.
This is the standard deduction.
The standard deduction is used in
every budget calculated. The amount of the standard deduction is
dependent on the household size.
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 deductions apply when there are payments for the care of a
child or an incapacitated adult so that a household member can work or
attend training preparatory to work. There is a limit to the amount
of the deduction for dependent care costs. See the [Standards Appendix (Appendix
D)] for the current limits.
An excess medical deduction is
allowed only for aged and/or disabled household members. Medical costs for aged
and/or disabled members that 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 the [Standards Appendix (Appendix
D)] for the current limit.
These are the only deductions that 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.
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FSC
Manual 06/01/01
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6200
The 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 [Standards Appendix (Appendix
D)] for the current percentage used in the earned income deduction.
Gross earned income (including self-employment income after all exclusions)
is multiplied by the current percentage to determine the earned income deduction.
The resulting figure is the earned income deduction. The earned
income deduction will be rounded up or down to the nearest dollar and
subtracted from the gross earned income to obtain net earned income.
Example - As of 10/1/00, 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 - 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.
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FSC
Manual 12/01/95
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6210
Farm Loss Deduction
The losses from a farming enterprise
operated by a household member may be deducted from the household's other
countable income. [FSC 5670] contains
instructions for applying the Farm Loss deduction.
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FSC
Manual 07/01/03
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6300
The Standard Deduction
A standard deduction is applied to all
food stamp households. The standard deduction is based on the household
size. See the chart below for the correct standard deduction:
Household size 1
$134
Household size 5 $147
Household size 2 $134
Household size 6 and up $168
Household size 3 $134
Household size 4 $134
The standard deduction is applied in the
following manner when there is both earned and unearned income in the
household:
- Calculate the net earned income by applying
the earned income deduction as described in FSC 6200 above.
- Total all unearned income.
- Calculate gross income by adding together
net earned income and total unearned income.
- Subtract the standard deduction from the
gross income. The resulting figure is the adjusted gross income.
Example: There are five household members.
The household has one member with gross earnings of $795. Two members each
receive TEA cash assistance of $142. The calculations are based on
deduction amounts in effect 10-01-02.
- Calculate net earned income. Gross earned income
$795 x 20% = $159 earned income deduction. $795 gross earned income -
$159 earned = $636 net earned income.
- Calculate total unearned income. $142 TEA cash
assistance + $142 TEA cash assistance = $284
- Calculate total gross income. $636 net earned income
+ $284 total unearned income = $920 gross income.
- Subtract the standard deduction. $920 total gross
income - $147 standard deduction = $773 adjusted gross income.
When there is only earned income in the
food stamp budget, the gross income will consist of the amount calculated
as the net earned income.
Example: The household reports only
earned income of $795. The worker calculates the earned income deduction as
$159 and $636 as the net earned income. $636 will be entered as the total
income and the $147 standard deduction will be subtracted from this figure
($636 - $147 = $489) to obtain the adjusted gross income.
When there is only unearned income in
the food stamp budget, the gross income will consist of the amount
calculated as the total unearned income.
Example: There are six household
members. The household reports only unearned income of two TEA cash
assistance checks. They total $284. $284 will be entered as the gross
income and the $168 standard deduction will be subtracted from this figure
($284 - $168 = $116) to obtain the adjusted gross income.
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FSC
Manual
10/01/08
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6400
The 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:
- Accept or continue employment; or
- Pursue education preparatory for
employment; or
- Comply with the Food Stamp Employment and
Training (E & T) Program requirements; or
- Seek employment.
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. The amount of the deduction will be the total cost of dependent
care, there is no maximum deduction amount.
Example: A household reports that a member is
employed. This member pays $45 per week per child to a day care center for
two children.
Calculated prospectively,
dependent care costs would be $45 x 4.334 = $195 per child
$195 x 2 = $390 total
dependent care costs.
Child care expenses that are reimbursed or paid
by the Division of Child Care and Early Childhood Education, TEA Program or
other similar programs are not deductible. A deduction will be allowed only
for the portion of child care expenses not paid or reimbursed by
such a program.
Any reimbursements made by the Division of Child
Care, TEA Program or other similar program to the household will not be
counted as income ([FSC 5411 #3]).
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FSC
Manual 06/01/01
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6410
Documentation and Verification of Dependent Care Costs
At a minimum, the following
documentation of the dependent care deduction must appear:
- The amount of the dependent care payment;
- The frequency of the expense/bill - i.e.
weekly, bi-weekly or monthly; and
- The name, address and telephone number of
the dependent care provider.
At any case action, dependent care costs
need be verified only if information regarding these costs is
questionable. If verification is requested the county office worker will
also document:
- The reason the payment was considered
questionable; and
- The source of the verification (example -
phone call to Kiddie Kare
Director, Mrs. John Smith, verified the amount billed as $50 per
week).
If the household does not supply the
requested 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 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 11410]. The date
upon which the verification was supplied will be considered the date the
change was reported.
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FSC
Manual 03/01/97
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6500
Medical Deduction
Allowable medical costs are listed in [FSC 6510]. Allowable medical costs
incurred by an aged and/or disabled household member are deductible. See
the [Glossary] for a
definition of "Aged/ Disabled." Only allowable medical costs in
excess of $35 per month are deductible. The $35 disregard applies to the
entire household and not individual members.
Each household member is evaluated individually
for entitlement to the medical deduction. Spouses of aged/disabled members
are not entitled to a medical deduction unless they are also aged or
disabled. The medical expenses of household members receiving benefits as
dependents of an SSI, Social Security or VA recipient are not deductible
unless the dependent is also aged or disabled.
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 disabled. 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 a medical deduction
begins either in the month that an individual turns age 60, or in the month
that a disabled individual begins receiving a disability check or
Medicaid benefits.
A medical expense incurred for an aged
or disabled individual who was a household member immediately before
entering a hospital or nursing home is allowable if the household is
responsible for the 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 a household member
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.
Households may be assigned a
certification period of up to 24 months if all members are eligible and
each member is either aged or disabled. At the end of the first 12 month
period, these households are subject to a midpoint review. This review
includes a full reassessment of the household's medical expenses. See [FSC 11345] for instructions.
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FSC
Manual 06/01/05
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6510
Allowable Medical Costs
Each category of allowable medical costs
is explained below.
- 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
salary costs, an amount equal to the maximum food stamp benefit amount for one
person will be deducted if the household provides the attendant (or
attendants) with more than 50% of the meals served in the household in a
month. For example, two attendants come each day. Therefore, the household
is providing a meal to an attendant at each meal time. The full coupon
allotment for one person will be deducted even though neither attendant
takes more than 50% of his or her meals in this home in a month's time.
The amount of
the meal related deduction is the maximum food stamp benefit amount for one
person that is in effect at the household's
certification or recertification. If a new basis of issuance (NBI) occurs,
the county office is not required to update this deduction until the next
scheduled recertification or midpoint review but may choose to do so
sooner.
When the costs
of an attendant could either be deducted as a dependent care expense or as
a medical expense, the costs will be handled as a medical
expense. If a mother pays dependent care costs for two or more
children but not all the children are disabled, only the portion of the
expense paid for the care of the disabled child or children will be allowed
as a medical expense. When the amount paid for the care of the disabled
child or children is not identifiable, the entire expense will be allowed
as a dependent care deduction. See [FSC
6400].
- Corrective Devices - Corrective devices are items such as, but not limited to,
the following:
- 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)
- Prosthesis
- Corrective braces worn on the limbs
- Corrective shoes and orthotics when prescribed by a doctor or other
health care professional
- Hospital and
nursing home care - This includes costs incurred
during confinement or out-patient care or
a medical facility such as a hospital,
out-patient facility, 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 household member
immediately before he or she entered the hospital or nursing home are
allowable if the household is responsible for the costs. Code 1, 2 or 3
must appear in Field 63 of the DCO-233 when such costs are allowed.
- Insurance - Health and Hospitalization Policy
Premiums -
This includes
payments for aged/disabled members for health and hospitalization policy
premiums such as, but not limited to, the following:
- Medical and
hospital insurance
- Nursing home insurance
- Cancer and intensive care insurances
- Health insurance premiums deducted from paychecks
- Dental insurance
- Prescription drug insurance including "prescription drug cards"
purchased by a household member that pays part of certain prescription
costs
Some health
insurance policies cover household members who are not entitled to a
medical deduction as well as those who are. When the portion of the premium
paid for the aged/disabled members cannot be determined, the premium will
be prorated among all members included on the policy. The pro rata amount
for one member will be multiplied by the number of aged/disabled members.
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.
- Medicaid Cost Sharing - These are medical expenses incurred by
aged/disabled Medicaid recipients which are not covered by Medicaid.
Example:
Medicaid recipients are allowed to obtain a certain number of prescriptions
free of charge each month. Additional prescription costs incurred by a
Medicaid recipient are allowed as a medical expense if the Medicaid
recipient is aged or disabled.
- 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
- Other medical procedures
This also
includes other services provided by a licensed practitioner or other
qualified health practitioner such as:
- Psychotherapy
- Rehabilitative services
- Chiropractic services
- 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, wheelchair ramps, hospital beds and portable oxygen tanks.
- Costs for the purchase, maintenance, and training of seeing eye dogs for
the blind, and service dogs for people with mobility disabilities. 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.
- Costs for the purchase and maintenance of a "lifeline" service
intended to be used by an elderly or disabled individual to call for assistance
in the case of an emergency. Related telephone coast are not
allowable since they would be covered by the telephone standard.
- 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.
- Prescription Drugs - This includes:
- Drugs
prescribed by a licensed practitioner - e.g., doctor, dentist,
chiropractor; and
- Over-the-counter medication recommended or approved by a licensed
practitioner. This includes over-the-counter medications such as, but
not limited to, insulin for diabetics, aspirin for arthritics, herbal
supplements, and vitamins. Food supplements prescribed by a physician
or other health care professional may be allowed as an over-the-counter
medication if the food supplement cannot be purchased with food stamp
benefits. (Ensure, Ensure Plus, Ensure Pudding, Boost, and Jevity can be purchased with food stamp benefits.
If information is needed about a food supplement not listed here, the
worker must contact the Food Stamp Section.)
o
The standard
cost included in the food stamp budget to prevent the reduction of food
stamp benefits when one or more household members use a Medicare-Approved
Drug Discount Card. See FSC 6524.1 for additional information.
- 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 State employee reimbursement rate 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 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 that requires the parent or parents to obtain
lodging. The cost of lodging
does not include the cost of meals or other incidentals.
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FSC
Manual 06/01/05
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6511
Allowable Medical Deductions in Alphabetical Order
- Ambulance costs
- Attendants, home health aids, care of a
disabled child, homemakers, etc.
- Braces, corrective, for limbs
- Braces, orthodontic
- Chiropractic services
- Contact lenses
- Corrective shoes and orthotics
- Crutches
- Dental services
- Dentures
- Dogs (including the cost of food and other
costs) trained to assist blind, deaf or physically impaired
- Drugs, prescription
- Drugs, over the counter when prescribed by a
licensed practitioner
- Eye glasses
- Hearing aids and batteries
- Hospital care
- Hospital beds
- Incontinence supplies
- Insurance, cancer and intensive care
- Insurance, medical and hospitalization
- Insurance, Medicare
- Insurance, Medipak
- Lease costs for medical equipment
- "Lifeline" service but not related
phone costs
- Lifts
- Lodging when needed to receive medical
treatment
- Medicaid cost sharing
- Needles and syringes used for insulin or
other prescription drugs
- Nursing home care
- Oxygen
- Physician's charges
- Prosthesis
- Psychotherapy
- Rehabilitative services
- Surgery
- Surgical dressing supplies
- Telephonic aids used by persons with a
disability
- Tests, medical
- Therapy
- Transportation to medical facility
- Wheel chairs
- Wheel chair ramps
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FSC
Manual 03/01/97
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6520
Determining Current Medical Expenses
The county office worker and the household
must work together at certification, recertification and mid-point review
to anticipate current medical expenses based on the best information
available. The household is under no obligation to report changes in
medical expenses but is allowed to do so. The worker will act on any
reported changes in medical expenses.
The worker must consider several factors
when anticipating current medical expenses:
- How often is the expense incurred? - See [FSC 6521-6521.3].
- Will the expense be reimbursed? - See [FSC 6522].
- Is the expense past due? - See [FSC 6523].
NOTE: See [FSC 11640] for special instructions on
handling cases certified for longer than 12 months.
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FSC
Manual 03/01/97
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6521
Factor One - How Often is the Expense Incurred
6521.1 Expenses
Incurred Each Month
Monthly rental payments on medical
equipment, visits to a physician made at least once per month, and Medicare
premiums are all types of monthly medical expenses. (Any medical expense
the household expects to incur at least once per month is classified as a
monthly medical expense.)
Example: Mrs. Casey, age 61, declares
the following medical expenses:
- A prescription drug filled twice per month
at $22.40 per bottle.
- A monthly visit to the doctor at $20.00 per
visit and taxi fare of $10.00 for the round trip.
- A blood test done once per month at $25.00
per test.
- Hospitalization insurance premium paid once
per month at $47.50 per month.
Mrs. Casey provided receipts indicating
that she has incurred these expenses for the last six months and stated
that she expects to continue paying these expenses each month. Her expenses
are calculated as follows:
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$22.40 x 2 =
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$ 44.80
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for drugs
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$ 20.00
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for the doctor's visit
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$ 10.00
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for taxi fare to the
doctor's office
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$ 25.00
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for the blood test
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$ 47.50
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insurance
premium
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$147.30
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total monthly medical
expenses
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FSC
Manual 03/01/97
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6521.2
Expenses Incurred Periodically
Medical expenses not incurred every
month may be allowed in the food stamp budget if they are:
- Regularly recurring (expenses such as medication purchased every other month or
insurance paid quarterly); and
- Reasonably anticipated (the customer expects to continue incurring
these costs on a basis less often than once per month).
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 June 2001 to May
2002. On August 26, 2001, she reports a $50 cost on August 19,
2001. Her budget is adjusted for the month of September, 2001 only.
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Manual 03/01/97
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6521.3
One-Time Medical Expenses
One-time medical expenses are those that
are not expected to recur. Examples of medical expenses that may be
incurred on a one-time basis 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 within 30 calendar days prior to the
date of application or if payment will otherwise become 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. The cost of the glasses is allowable. The cost of the hearing aid is
not allowable.
A one-time medical expense may either be
averaged forward over the period of certification or deducted in the month
incurred.
One-time medical expenses are allowed at
the time of the midpoint review if the expense is incurred or payment
otherwise becomes due in the month of the midpoint review or the month
prior to the midpoint review. These expenses will be allowed in the first
month following the review or averaged over the second segment of the
certification period. This is the household's option.
Example - A household submits its midpoint review on
December 11. The household provides receipts for the following one-time
expenses with its midpoint review - glasses purchased on October 10, an
emergency room visit on November 5, and a blood test on December 1. The
cost of the emergency room visit and the blood test are allowable medical
expenses. The cost of the glasses is not an allowable medical expense.
One-time expenses are allowed at the
time of recertification if the expense is incurred or payment otherwise
becomes due in the month of recertification or the month prior to
recertification. The expense will be averaged over the months in the new
certification period or allowed in the first month of the new certification
period. This is the household's option. (For households certified for
longer than 12 months, the expense will be averaged only over the first
segment of the certification period.)
Example - A household presents the following receipts for
the following one-time expenses at its recertification interview on October
10 -glasses purchased September 30, denture repairs paid August 26, and a
doctor bill of $80 incurred on May 10. The household paid one doctor bill
on October 3. The doctor's office states this bill was not overdue.
The cost of the denture repair is not an
allowable expense. The cost of the glasses is an allowable medical expense.
The $80 doctor bill is allowable.
One-time expense voluntarily reported as
a change are allowed if the expense was incurred or payment became due
within 30 days prior to the date the report was received in the county
office. The expense will be averaged over the months remaining in the
certification period or in the first month after change. This is the
household's option.
If the household is certified for longer
than 12 months, and is in the first segment of the certification period,
the expense will be prorated only over the months remaining in the first
segment. If the household is in the second segment of the certification
period, the expense will be prorated only over the months remaining in the
second segment.
Example - A household is certified for the period May,
2001 to April, 2003. A change report form is submitted on September
10, 2001, reporting an aged household member has entered the nursing home.
They also report this household member incurred during August, 2001 a
number of medical costs before entering the nursing home. These expenses
are: hospital bed $50.00, sick room supplies $100, prescription drugs $225
and part-time attendant $30 per week. They are allowable.
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 October. She has arranged to pay the
hospital $100 per month on this bill beginning in December. $100 per month
will be the allowable cost for the ten month period,
December through the following September, 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.
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Manual 03/01/97
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6522
Factor 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, 2001. She reports this on her application dated
April 26, 2001. She also reports that she has Medicare. She is certified on
May 21, 2001 for April, 2001 to March 2003. 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 first 12 months 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.
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.
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Manual 03/01/97
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6523
Factor 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 county office worker will contact the provider to determine
the status of the bill unless the status can be determined from viewing the
bill.
Exceptions:
- The bill has been reported timely but not
deducted since the amount of the reimbursement was not yet known.
- Arrangements for a payment schedule had been
made before the bill was classified as past due.
- The expense has already been averaged over
the period of certification.
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Manual 06/01/05
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6524
Anticipating Monthly Prescription Drug Cost
06/01/05
One of the most difficult parts of
determining the total medical deduction is anticipating the household's
monthly prescription drug cost. To complete this task successfully, the
county office worker must work with the household.
Verification of the prescription
medications taken by aged disabled household members is required.
Acceptable verification of prescription medications includes receipts or
bills from the pharmacist. Statements or computer printouts from the
pharmacy are also acceptable. If the pharmacist provides a computer
printout or statement, the worker will contact the pharmacist for
clarification of the contents when necessary.
Example - The printout list two amounts for each prescription.
The worker contacts the pharmacist who states the full cost of the
prescription is list on one line and the amount of reimbursement on
another. The worker must subtract the amount of the reimbursement to
determine the cost actually incurred by the household.
If the household claims that a member is
taking over the counter medication recommended or approved by a licensed
practitioner, the practitioner must verify he or she has recommended or
approved the medication. See FSC 6524.1 if the
household is using a prescription drug discount card.
The worker will review the verification
to see which prescriptions appear frequently. If the household states the
member continues to take these medications, the worker will anticipate the
current cost of each prescription as a monthly expense.
Prescriptions purchased at least once
per month will be shown as a monthly cost. If a prescription is purchased
more than once per month, the total cost will be shown as a monthly cost.
For example, a drug is purchased two times each month at a cost of $10.00.
The anticipated monthly cost will be $20.00.
Prescriptions purchased several time per
year on a recurring basis will be anticipated as a periodic expense. See [FSC 6521.2].
Prescriptions purchased infrequently
will be disregarded unless the household states the member will begin
purchasing the drug more frequently. (This should be verified through the
physician or pharmacist.)
If the household cannot provide
verification of past expenses or if the member's prescription costs have
increased or decreased substantially, current receipts may be accepted as
verification. The worker must document the household's statement about
anticipated prescription costs. If the costs are exceptionally high,
verification may be requested from the physician or pharmacist that the
member is expected to continue taking the prescription drugs.
The
method used to anticipate the monthly prescription drug cost will be fully
documented in the case record along with the household's statements about
anticipated changes in prescription drug costs. An ANSWER spread
sheet is available to calculate and document medical costs including
prescription drug costs. The spread sheet must be printed and placed
in the case record.
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Manual 01/01/06
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