Kansas Family Medical Assistance
Manual (KFMAM)
Eligibility Policy - 11/21/2024
05000 >>> 05400
05330
05400 Exempt Income - With the exception of non-taxable Social Security, non-taxable foreign earned income, and tax-free interest, only income that is taxable is countable. Income from the following sources is exempt as income in the month received. For income types not referenced, additional research is required to determine if the income is taxable.
5401 Child Support - Payments, whether paid for current support, arrears support, or voluntary payments are exempt as income. This includes cash payments and payments made in-kind.
5402 Disability - Disability payments such as those received for Worker’s compensation, short-term disability, or other non-SSA disability payments are exempt as income.
5403 Earnings - Earned income from Strike Pay and Blood/Plasma Sales are exempt.
5404 Educational Income - Income from Grants, Scholarships, Loans, Veteran’s educational income, and Monthly living benefits (stipends) are exempt as income.
5405 Government Payments - Government payments are exempt as income. These payments are described below.
5405.01 Adoption Assistance Subsidy - Payments received for Adoption Assistance are exempt as income in the month received.
5405.02 Cash Assistance - Cash assistance payments, including those received as TAF special allowances are exempt as income in the month received. Examples of Special Allowances payments are special transportation payments and special service payments.
5405.03 Disaster/Emergency Assistance - Federal major disaster and emergency assistance and comparable disaster assistance provided by state or local government or by disaster assistance organizations in conjunction with a presidentially declared disaster are exempt as income in the month received and as a resource in the following months.
This includes disaster unemployment assistance to an individual as a result of a major disaster. Individuals cannot be eligible for any other unemployment compensation and also receive disaster unemployment benefits. Payments are limited to 26 weeks. Central Office will notify staff if such disaster unemployment assistance is paid in Kansas due to a major disaster.
5405.04 Energy Assistance/LIEAP - Payments or allowances made under some federal laws for the purpose of providing energy assistance are exempt from consideration as income in the month received. An example of such federal program is the Department of Health and Human Services' Low Income Energy Assistance Program (LIEAP).
Other home energy assistance furnished by a federal or state regulated entity whose revenues are primarily derived on a rate-of-return basis, by a private nonprofit organization, by a supplier of home heating oil or gas, or by a municipal utility company which provides home energy, if the assistance provided is based on need, is exempt as income in the month received.
5405.05 Executive Volunteer Programs - Payments received through Service Corps of Retired Executives (SCORE) or Active Corps of Executives (ACE) are exempt as income in the month received.
5405.06 Food Stamps - Value of the benefits issued under the current Food Stamp Act are exempt as income in the month received.
5405.07 Foster Care and Permanent Custodianship - Payments received for providing foster care or permanent custodianship are exempt as income in the month received.
5405.08 Foster Grandparents - Any payment provided to volunteers serving as foster grandparents is exempt as income in the month received and as a resource in the following months.
5405.09 HUD Payments/Housing Assistance - Payments from federal housing programs including negative rent payments made to tenants of subsidized housing under Housing and Urban Development (HUD) regulations is exempt as income in the month received and as a resource in the follow months.
5405.10 Independent Living Payments - Payments received for Independent Living are living exempt as income in the month received.
5405.11 Older American Act Payments - Payments received via the Older American Act are exempt as income in the month received. These include the Senior Community Services Employment Program funded under Title V of the Older Americans Act of 1965 (as amended by P.L. 100-175, the Older Americans Act Amendments of 1987) are exempt as income in the month received. Programs in Kansas funded under Title V include Green Thumb, Project Ayuda (serving Wyandotte, Johnson, Douglas, and Shawnee counties), and the Senior Community Service Employment Program through the Midway Chapter of the American Red Cross (serving Sedgwick, Reno, Harper, Kingman, Butler, Cowley, Harvey, and Sumner counties).
5405.12 Refugee Resettlement Funds - Payments received from a Refugee Resettlement Agency are exempt as income in the month received.
5405.13 Senior Health Aids/Companions - Payments received through Senior Health Aides or Senior Companions are exempt in the month received.
5405.14 Tax Refunds/Rebates/Credits - Legislated tax rebates and refunds are exempt as income in the month received. This also includes Earned Income Tax credit, whether received as a lump sum refund or on an ongoing basis.
5405.15 Gate Money - Money paid to a prisoner upon their release shall be exempt as income in the month of receipt.
5406 Insurance Payments - Payments from life or burial insurance as well as payments made for repair or replacement of property are exempt.
5406.01 Life and Burial Insurance Payments - Payments occasioned by the death of another person to the extent that the payments have been expended or committed to be expended for purposes of the deceased person’s last illness and/or burial. Such payments include, but are not limited to, proceeds from a life insurance or burial insurance policy, gifts, and inheritances.
5406.02 Repair and Replacement - Insurance payments received for the repair or replacement of property is exempt as income. This includes income from a one-time payment or a portion of a one-time payment from a settlement for repair or replacement of property or other settlement, including legal services and medical insurance payments.
5407 Interest and Dividends - Interest earned on a burial fund or on a pre-paid burial space contract account is exempt as income in the month received. Dividends earned on a life insurance policy are exempt as income in the month received.
5408 Loans, Gifts, and Contributions - Cash gifts, Loans, Charitable Donations, and Deemed Sponsor income are exempt.
5408.01 Loans - All loans, including loans from private individuals as well as commercial institutions, including deferred educational loans, shall be exempted from household income. Monies received from reverse mortgages are treated as loans, even if payments are regular and predictable.
When verifying that income is exempt as a loan, a legally binding agreement is not required. A simple statement signed by both parties that indicates that the payment is a loan and must be repaid shall be sufficient verification. However, if the household receives payments on a recurrent or regular basis from the same source but claims the payments are loans, the provider of the loans may be required to sign a statement that indicates that repayments are being made or that payments will be made in accordance with an established repayment schedule.
5408.02 Social Fundraising Accounts - Income received from a social fundraising account, such as a Go Fund Me account may be exempt as income depending on the purpose and intent of the account. Contributions received are exempt when the individual donating does not expect to receive anything in return for their contribution. Contributions are also exempt when the payment is made as an investment and the individual expects to receive a return on their investment.
5409 Native American Income - Payments from Tribal owned land, tribal disbursements, Indian Affairs income, and Claims Resettlement Income are exempt. Note: Income from gaming is countable. See 5220.08.
5410 Reimbursements - Income that is a reimbursement or refund is exempt.
Examples of exempt reimbursements are ones for job or training-related expenses such as travel, per diem, uniforms, and transportation to and from the job or training site. Reimbursements that are provided over and above the basic wages for these expenses are excluded; however, these expenses, if not reimbursed, are not otherwise deductible. Reimbursements for the travel expenses incurred by migrant workers are also excluded.
Also exempt are medical and dependent care reimbursements, reimbursements to students for specific education expenses such as travel or books, and jury duty payments.
To be exempt, these payments must be provided specifically for an identified expense other than normal living expenses and used for the purpose intended. When a reimbursement, including a flat allowance, covers multiple expenses, each expense does not have to be separately identified as long as none of the reimbursement covers normal living expenses.
5411 Social Security - Social Security income is exempt as outlined below.
5411.01 SSI - Income of an SSI recipient (including 1619(b) recipients) and retroactive SSI benefits (even if the individual receiving the benefit is no longer an SSI recipient) are exempt as income in the month received. This does NOT apply to persons receiving long term care in Medicaid approved institutions as provided in MKEESM 8112).
5411.02 Social Security Death Benefits - Social Security death benefits are exempt as income when used toward the cost of burial.
5412 Veteran's Income - All forms of veteran’s income are exempt. These include:
Veterans – Aid and Attendance
UME – Unusual Medical Expenses
Reduced VA Pension – LTC
VA Work Therapy
VA Housing Allowance
Veteran’s Disability
Veteran’s Pension
5413 Work Program/Training - Income from a work program may be exempt as income, depending on the type of program and whether or not the income is taxable. Exempt income types are outlined below. Also see 5320.08 for countable work programs.
5413.01 Workforce Investment Act (WIA) - Incentive and Training allowance income received from the Workforce Investment Act of 1998 (WIA) is exempt as income.
5413.02 Vocational Rehab (VR) - Training Allowances and Incentive Maintenance payments received from Vocational Rehabilitation are exempt as income.
5430 Miscellaneous Exempt Income - The following miscellaneous income types are all considered exempt.
5431 Agent Orange - Settlement payments are exempt as income in the month received and as a resource in the following months.
5432 Allocated Income - Income allocated for the support of dependents is exempt as income.
5433 Crime Victims Fund - Payments made pursuant to the Crime Victims Fund (Public Law 103-322), as amended are exempt as income in the month received.
5434 Family Subsidy - Payments provided through the Mental Health and Developmental Disabilities Commission or Family Support payments provided through the Children and Family Services Commission are exempt as income in the month received and as a resource in the following months.
5435 Holocaust Survivors - Reparation payments made to Holocaust survivors are exempt as income in the month received. These payments shall also be exempt for purposes of determining patient liability in a long-term care arrangement.
5436 Hostile Fire/Combat Pay - Hostile fire pay (also known as combat pay) received while in active military service is exempt as income in the month received.
See Policy Memo #2005-03-01 Exclusion of Combat Pay for more detailed information.
5437 Individual Development Accounts (IDA) - The interest on an allowable individual development account (IDA), including authorized matching contributions and accrued interest, is exempt as income as long as the account is maintained. For Working Healthy, income deposited into an IDA is also exempt in the month deposited. IDAs are exempt resources for all programs. An allowable IDA meets the following guidelines:
5437.01 - It is established by or on behalf of a TAF recipient or by or on behalf of an individual participating in the Assets for Independence Demonstration Program (AFIA) and is used for a qualified purpose.
5437.02 - A qualified purpose is one or more of the following:
(a) - post-secondary education expenses for college or vocational-technical school. Learning Quest or other 529 accounts are not considered IDAs;
(b) - first home purchase (must not have owned a home within three years of acquisition); or
(c) - business capitalization (business plan must be approved by financial institution or non-profit loan fund).
NOTE: Any funds withdrawn from an IDA and used for any purpose other than one of those listed above shall count as unearned income in the month withdrawn.
5437.03 - The IDA must be a trust funded through periodic contributions by the establishing individual and may be matched by or through a qualified entity for a qualified purpose.
5437.04 - A qualified entity to match IDA funds for a TAF recipient is either a not-for-profit organization described in section 501(c)(3) of the IRS code of 1986 and exempt from taxation under section 501(a) or a state or local government agency acting in cooperation with a 501(c)(3) organization. For AFIA participants, matching contributions are made by the federal government through a grantee.
5437.05 - AFIA recipients may only contribute to IDAs with income derived from earnings.
Note: The earnings of an adult placed in an IDA are counted as earned income in the month earned.
5437.06 - Parents may establish IDAs for their children as well as for themselves. Children may also contribute their earnings to accounts established by or for them.
5438 In-Kind Income - Benefits are exempt as income in the month received
5439 Japanese Aliens - Payments granted to certain United States citizens of Japanese ancestry and resident Japanese aliens under Title I of P.L. 100-383 (enacted 8-10-88) are exempt as income in the month received and as a resource in the following months.
5440 Student Loan Debt - Student loan debt that is discharged, forgiven, or cancelled after December 31, 2020 or discharged due to death or disability between January 1, 2018 and December 31, 2020.
5441 Ministerial Housing Allowance - A minister’s housing allowance, sometimes called a parsonage allowance or a rental allowance is exempt as income.
5442 Monies Withheld Voluntarily or Involuntarily - Monies withheld from assistance payments (e.g., TAF, GA, SSI) shall be included as countable income if the monies are withheld for the purpose of recovering from a household an overpayment which resulted from the household's fraudulent failure to comply with a state, federal, or federally assisted program which provides assistance on the basis of financial need. (For a definition of "fraudulent," refer to 8400).
5442.01 - Mandatory deductions from military pay for educational purposes shall not be included as income (or as a resource) while the individual is enlisted in the armed services. If individuals enroll in an educational institution after they leave the service, the amount withheld from salary plus any amounts matched from the VA will be treated as countable educational income minus expenses. Individuals who choose not to attend any school will receive the withheld monies in a lump sum payment and the payment shall be exempt per item 5440 above.
5442.02 - In addition, for all medical programs, programs not based on financial need that have a portion withheld to repay a prior overpayment received from that same income source, such as SSA, VA, Unemployment or Worker’s Compensation shall not have the portion withheld counted as income.
5443 Radiation Exposure Compensation - Payments made pursuant to the Radiation Exposure Compensation Act, P.L. 101-426 (10-15-90) are exempt as income in the month received and as a resource in the following months. This law compensates individuals for injuries or deaths resulting from exposure to radiation from nuclear testing and uranium mining in Arizona, Nevada, and Utah.
5444 Rehabilitation Services Payments - Income directly provided by Kansas Rehabilitation Services, except as noted in 5320.08 is exempt as income in the month received and as a resource in the following months. Maintenance payments are also exempt as they are in excess of normal living expenses and are considered a reimbursement.
5445 Relocation Assistance - Payments received under the Uniform Relocation Assistance and Real Property Acquisition Policy Act of 1970 are exempt as income in the month received and as a resource in the following months. The applicant’s or recipient’s equity in a home is to be disregarded to the extent that such equity was purchased with payments under the Uniform Relocation Act of 1970.
5446 Renal Dialysis - Special incentive payments received for renal dialysis patients for care in their own home are exempt as income in the month received.
5447 Ricky Ray Hemophilia Act Fund - Payments made pursuant to the Ricky Ray Hemophilia Relief Fund Act, P.L. 105-369 are exempt as income and as a resource for all programs. The payment is a one-time amount of $100,000.
NOTE: Interest earned on these exempt funds is not exempt as income. See 5220.05.
5448 Shared Living - In shared living arrangements; cash paid from one family to another toward the total cost of shelter is exempt as income in the month received.
5449 Susan Walker v. Bayer - Payments made pursuant to a class settlement in the case of Susan Walker v. Bayer Corporation is exempt as income in the month received and as a resource in the following months. This case involved hemophiliacs who contracted the HIV virus from contaminated blood products. Interest earned on retained funds is not excluded and is countable per 5220.05. Accumulated interest is also countable as a resource beginning the month following the month of receipt, even if commingled with non-exempt funds.
5450 Trust for a VA Child - Money for a child which is held in trust by VA and determined by VA unavailable for subsistence needs is exempt as income in the month received and as a resource in the following months.
5451 Vendor Payments - Money payments that are not payable directly to a household but are paid to a third party for a household expense are vendor payments and exempted as income. A vendor payment is defined as a payment made in money on behalf of a household shall be considered a vendor payment whenever a person or organization outside of the household uses its own funds to make a direct payment to either the household's creditors or a person or organization providing a service to the household. For example, if a relative or friend, who is not a household member, pays the household's rent directly to the landlord, the payment is considered a vendor payment and is not counted as income to the household. Similarly, rent or mortgage payments, made to landlords or mortgagees by HUD or by state or local housing authorities, are other examples of vendor payments and are also exempted.
5452 Spousal Support (Alimony) - Spousal support payments, or alimony, as a result of a divorce decree effected or modified after December 31, 2018 are not taxable and are thereby considered exempt income for MAGI purposes.