Texas Health and Human Services Commission
Texas Works Handbook
Revision: 14-2
Effective: April 1, 2014

Part A — Section 1400

Deductions

A—1410  General Policy

Revision 13-2; Effective April 1, 2013

All Programs

Certain deductions may be allowed when determining countable income.

TANF and TP 08

Households may be allowed the following deductions:

  • work-related expense deduction (up to $120);
  • 90% earned income deduction;
  • dependent care;
  • diversions; and
  • $75 disregard.

SNAP

Households may be allowed the following deductions:

  • 20% earned income deduction for households with earnings;
  • standard deduction;
  • medical costs or household members who are elderly or disabled;
  • dependent care;
  • child support paid to or for non-household members;
  • homeless shelter standard;
  • excess shelter costs; and
  • Plan for Achieving Self-Sufficiency (PASS).

Medical Programs

Households may be allowed the following deductions:

  • work-related expense deduction;
  • dependent care;
  • payments to dependents living outside the home;
  • alimony;
  • child support payments;
  • $75 disregard; and
  • extra needs for legal parent (TP 47).

A—1411  Rules that Apply to Deductions

Revision 12-3; Effective July 1, 2012

All Programs

For the interview month, use actual amounts (amounts that have already been billed), and project for amounts that have not been billed.

  • Do not deduct:
    • expenses paid to another member of the same EDG;
    • expenses paid by a reimbursement, an exempt vendor payment or in-kind benefit (Exception: For the Supplemental Nutrition Assistance Program (SNAP), see A-1428.1, Allowable Medical Expenses, and A-1429.3, Utility Allowances); or
    • past-due balances, late charges or finance charges. Exception: For SNAP, expenses such as property tax that are averaged over the period between scheduled billings or over the period the expense is intended to cover, are allowable even if the expense is paid or past due when reported.
  • Use the most recent month's bills to project expenses. Consider changes expected during the certification period.
  • Consider only household expenses expected during the certification period.
  • Use the income conversion factors to determine monthly expenses if expenses are billed weekly, biweekly or semi-monthly.

Do not allow a deduction if:

  • verification of the expense is required;
  • the household fails to provide required verification; and
  • the advisor is not able to verify the expense directly using other automated systems that are acceptable verification sources and accessible to the advisor or through another method.

Note: Do not deny the EDG for failure to provide the verification.

SNAP

  • Allow an expense regardless of when or if the household intends to pay it.
  • If expenses are not averaged, deduct them in the month the expense is billed (or the month it becomes due if no bill is sent). Exception: See Change in Medical Expenses During Certification, A-1428.4.
  • Allow a deduction for expenses that are legally due monthly even when the household pays them in advance.
  • Households may choose to average expenses that fluctuate or occur less often than monthly. Average these expenses over the
    • interval between scheduled billings, or
    • period the expense is intended to cover if there is no scheduled billing.

      Note: If the individual reports a change, recalculate the average.

  • If the individual agrees with the provider to make installment payments for an allowable one-time expense, the individual can choose to have the agreed upon payments budgeted as the amount due in a given month.

A—1420  Types of Deductions

Revision 12-3; Effective July 1, 2012

A—1421  Child Support Deductions

Revision 12-3; Effective July 1, 2012

TANF

Follow diversion policy in A-1424, Diversions, Alimony, and Payments to Dependents Outside the Home.

SNAP

Deduct child support payments (current or arrears) that a household member is legally obligated to pay and that member or another household member:

  • actually pays to an individual outside the Supplemental Nutrition Assistance Program (SNAP) household; or
  • actually pays for an individual outside the SNAP household; or
  • makes to a child support agency.

Medical Programs

Deduct child support payments made by a member of the budget group.

Exceptions:

  • Do not deduct child support payments paid directly or through the Office of the Attorney General to a child living in the home.
  • If a payment is intended for more than one child and one child lives in the home, deduct only the portion of the payment that is for the child that does not live in the home.

A—1421.1  Allowable Child Support Deductions

Revision 12-3; Effective July 1, 2012

SNAP

Allowable child support payments may be in the form of:

  • cash support;
  • medical support; or
  • payments to third parties.

To be an allowable deduction, these payments must be ordered by a court or administrative authority and be equal to or less than the household's child support obligation.

Do not deduct payments for alimony or spousal support.

Medical Programs

Allowable child support payments may be in the form of:

  • cash support;
  • medical support; or
  • payments to third parties.

Do not deduct a levy or garnish fee charged by an employer.

A legal obligation is not required to allow the deduction.

A—1421.2  Budgeting Child Support Deductions

Revision 09-3; Effective July 1, 2009

All Programs

Child support collected through a tax intercept is not an allowable child support deduction.

A child support payment may be owed by one household member but paid by another member. Allow the child support expense for the household member paying the expense.

If the household member with the legal obligation or the household member paying the legal obligation leaves the home, redetermine the household's eligibility for the deduction.

SNAP

Allow a child support deduction for households that pay legally obligated child support. For current support, allow a deduction up to and including the legally obligated amount. For arrears, allow the amount a household member actually pays.

For households with new obligations, budget the anticipated amount if the household member can reasonably explain the basis for future payment. For households with previous payments, average the amount (not to exceed the legal obligation) and project over the certification period. Consider any other anticipated changes that would affect the payment.

In some instances, an employer may charge the absent parent a processing fee for garnishing wages or the custodial parent may use the services of a private collection agency, which may charge the absent parent a fee for collecting child support. The processing fee is not an allowable expense. Allow as a deduction only the legally obligated amount a household member pays regardless of whether a processing fee is added or subtracted from the gross amount of the child support.

If a household member pays child support in advance, the household is eligible for the child support deduction. Allow the individual the option of deducting the entire amount in the month paid or averaging the amount over the period of time it is intended to cover.

If legally obligated child support is paid by a household member who is disqualified due to ... then ...
intentional program violation, employment sanction, felony drug convictions or being a fugitive, deduct the entire amount of eligible child support paid.
alien status, citizenship, Social Security number or 18-50 work requirement, prorate the amount of eligible child support paid by the disqualified member. Deduct all but the disqualified member's share.

Deduct the full child support expense when another household member pays the legally obligated child support on behalf of a disqualified member.

A—1422  $75 Disregard Deduction

Revision 09-1; Effective January 1, 2009

TANF

Deduct up to $75 of child support received before the certification date.

Related Policy
Child Support, A-1326.2

Medical Programs

Deduct up to $75 of child support received by members of the budget group.

A—1423  Dependent Care Deduction

Revision 13-3; Effective July 1, 2013

TANF and Medical Programs

The maximum dependent care deduction is up to and including:

  • $200 per month for each child under age 2,
  • $175 per month for each child age 2 or older, and
  • $175 per month for each adult with disabilities.

Allow an earned income deduction for the actual cost of unreimbursed payments up to and including the maximum amount when the individual incurs an expense for:

  • the care of a child or adult with disabilities (even when the child or adult with disabilities is not included in the certified group); and/or
  • transportation of a child to and/or from day care or school.

The expense must be both necessary for employment and incurred by an employed person who is included in the TANF or Medical programs budget group or would be included except the person is disqualified for a reason listed in A-1362.2, TANF — Budgeting for a Household Member Disqualified for Noncompliance with SSN, TPR, Failure to Timely Report a Certified Child's Temporary Absence, Intentional Program Violation, Being a Fugitive or a Felony Drug Conviction. Allow the expense for household members meeting these requirements, even if there are other adults in the household who could care for the children.

In TANF and TP 08, allow the deduction in the budgetary and recognizable needs tests.

SNAP

Allow a deduction for the actual cost of unreimbursed payments when the individual incurs an expense for the care of a child or adult with disabilities, or transportation of a child or adult with disabilities to and/or from day care or school. Allow the deduction if the expense is necessary for a household member to:

  • seek or continue employment;
  • attend training; or
  • go to school.

Allow the expense for household members who meet one of the above conditions, even if there are other adults in the household who could care for the children. Deduct these expenses from earned or unearned income. The individual's expense may be considered necessary for employment, training or school attendance if the child or adult with disabilities lives with the individual at least one day a month. The child/adult with disabilities does not have to be a certified member of the SNAP household.

Related Policy
Disqualified Members, A-1362

A—1424  Diversions, Alimony, and Payments to Dependents Outside the Home

Revision 09-3; Effective July 1, 2009

TANF

Allow the following deductions from the income of a caretaker, second parent, or minor parent before applying either of the two needs tests (after earned income deductions in the Budgetary and Recognizable Needs Tests):

  • budgetary needs amount for a family size equal to the number of noncertified persons in the home the legal parent can claim as tax dependents or is legally obligated to support (including Supplemental Security Income (SSI) recipients and children receiving TP 19 SSI Medicaid). Use the needs figure applicable to the number of noncertified members.

    Do not divert an amount for the needs of a dependent who is disqualified for a reason other than citizenship, alien status, time limits, or unmarried minor parent domicile requirement.

  • actual amount of child support and alimony a household member pays to persons outside the home.
  • actual amount of a household member's payments to persons outside the home a household member can claim as tax dependents or is legally obligated to support.

When two household members are married or filing a joint tax return, any portion of their joint diversion amount that exceeds one person's income can be deducted from the other person's income.

Complete Step 3 on Form H1100, Addendum Income Worksheet, to allow this deduction.

Medical Programs

Allow the following deductions:

  • alimony, and
  • payments to dependents living outside the home.

A—1424.1  Determining the Needs Figure

Revision 12-3; Effective July 1, 2012

TANF

Use the following table when diverting for the needs of noncertified tax dependents in the home.

If the tax dependent is a ... then use the budgetary needs figure for ...
  • parent,
  • spouse (including spouse of child), or
  • child age 19 or older,
an adult.*
child under 19, a child.
* If the number of persons whose needs are diverted includes more than two adults, use the chart figure for two adults and the number of children from the column labeled Caretaker EDGs With Second Parent. If there are a total of three adults, add an additional amount from the chart for the family size of one ($313); or if there are a total of four adults, add an additional amount from the chart for a family size of two ($498). Continue the pattern depending upon whether the number of additional adults is an odd number (5 = $498 + 313) or an even number (6 = $498 + $498).

When diverting for an 18-year-old child who turns 19 during one of the budget months, use the budgetary needs figure of an adult beginning with the month after the child turns 19.

A—1425  Earned Income Deductions

Revision 12-3; Effective July 1, 2012

TANF

Earned income deductions are the:

  • standard work-related expense (up to $120);
  • 1/3 earned income disregard for applicants;
  • 90% earned income deduction; and
  • dependent care costs.

An applicant or recipient does not qualify for deductions if:

  • income is gained from illegal activities, such as prostitution and selling illegal drugs.
  • the individual did not notify HHSC timely about a new job or increased earnings without good cause. Allow the deduction for ongoing budgets, but do not allow it when determining an overpayment or supplemental budgets. Count the months it should have been budgeted as used months based on when the change would have been effective if the individual had reported timely.
  • individual voluntarily quits a job without good cause within the 60 days prior to the:
    • application file date, or after filing but before certification; or
    • household addition request date, or after the request but before being added.

      Do not allow the deductions until the next complete review. Allow the deductions beginning with the TIERS effective month when processing the next complete review.

SNAP

Allow a 20% deduction of all gross earned income. See B-752, Determining Claim Amounts, for exceptions.

Medical Programs

The earned income deduction is the work-related expense (up to $120).

A—1425.1  Work-Related Expense ($120 and 20%)

Revision 06-3; Effective July 1, 2006

TANF and Medical Programs

Allow a work-related expense deduction of up to $120 a month (not to exceed the person's monthly earnings) from the earned income of each employed household member:

  • whose needs are included in the budget or certified group; or
  • who is a disqualified member.

In TANF, allow this deduction in the budgetary and recognizable needs test. Exception: Do not allow this deduction for the 185% FPIL test for Transitional Medicaid.

SNAP

Allow a 20% deduction of all gross earned income.

A—1425.2  1/3 Disregard for Applicants

Revision 02-3; Effective April 1, 2002

TANF

Applicant households that must pass the 100% Budgetary Needs Test are also required to pass Part A of the 25% Recognizable Needs Test. This Part A Test allows the standard work-related deduction ($120) and a disregard of 1/3 of the remaining income. If the applicant fails this test, the household is ineligible for TANF.

Note: For this purpose, an applicant household is one that has not received TANF in any state in the four months before applying.

A—1425.3  90% Earned Income Deduction

Revision 13-2; Effective April 1, 2013

TANF and TP 08

Applicant households that pass Part A of the Recognizable Needs Test and all other households must pass Part B of the test (see A-1341, Income Limits and Eligibility Tests). After subtracting the standard work-related expense, subtract 90% of the remaining earnings (up to a cap of $1,400). Allow this deduction for each employed household member who is eligible for it. The individual can receive this deduction for four months in a 12-month period. The four months do not have to be consecutive. Note: Do not count a month in which a full-family sanction is imposed as one of the 90% earned income deduction (EID) months.

The 12-month period is a fixed period that begins with the first month the 90% deduction is used. The first month that counts as a used month is the first month the individual receives a cash benefit that includes the 90% deduction. This period is referred to as the 90% EID eligibility period.

If the individual has not used all four months of the deduction within the 90% EID eligibility period, allow a new fixed 12-month period and four new months of the 90% EID after the first 12-month period ends. The new 12-month period begins with the first month that the individual uses the 90% deduction again.

If the household member received the 90% deduction for four months in a 12-month period, the member may not receive it again until:

  • the TANF or TP 08 EDG is denied, and remains denied for one full benefit month; and
  • 12 calendar months have passed since the denial. This 12-month period is known as the 90% EID ineligibility period, and begins with the first full month of denial after the individual used the fourth month of the 90% deduction. Months the individual receives TP 07 or TP 37 Transitional Medicaid count as denial months.

A—1425.3.1  Who is Eligible for the 90% Earned Income Deduction

Revision 13-2; Effective April 1, 2013

TANF and TP 08

A household member is eligible to receive the 90% EID if:

  • the individual has not previously received the deduction for four months in the individual’s 12-month period, and
  • the individual’s needs:
    • are included in the certified group; or
    • would be included except the individual is disqualified for noncompliance with child support, SSN, Choices, TPR requirements, IPV, or for reasons other than alien/citizenship status, TANF state time limit policies, and the TANF unmarried minor parent domicile requirement.

TIERS default settings automatically allow the 90% EID for eligible EDG members. The 90% EID page appears by choosing the screen from the left navigation bar. Use the effective begin and end dates to allow the deduction for specific months.

An individual may decline use of the deduction even if it results in EDG denial without its use. The individual may decline at any time, but the deduction may not be removed retroactively. Any removal from the budget will take effect according to timely change processing for future months.

If the client wishes to decline the deduction, answer yes to the questions "Does individual decline the TANF 90% earned income deduction?" and "Does individual decline the FMA 90% earned income deduction?" on the 90% Earned Income Deduction – Details screen. TIERS requires answers for both questions.

A—1425.3.2  Who is Not Eligible for the 90% Earned Income Deduction

Revision 13-2; Effective April 1, 2013

TANF

An individual is not allowed the deduction if any of the situations listed in A-1425, Earned Income Deductions, apply to the individual.

An individual is not allowed the deduction if the member’s needs are not included in the EDG because the member is disqualified due to:

  • alien/citizenship status;
  • TANF state time limits policies; or
  • TANF unmarried minor parent domicile requirement.

Do not allow the deduction if the individual has already received the 90% deduction for four months in a 12-month period. When the 90% ineligibility period ends, do not allow the deduction again until the individual obtains new employment. The new employment must begin after the 90% ineligibility period ends.

A—1425.3.3  Removing the 90% Earned Income Deduction

Revision 12-3; Effective July 1, 2012

TANF

After the individual receives the 90% deduction for four months in a 12-month period, the deduction ends. TIERS automatically removes the deduction and rebudgets the EDG for the appropriate month based on advisor entries.

TIERS will transfer the EDG to TP 37 EID Transitional Medicaid if the household becomes ineligible because the fourth month of the 90% deduction ends.

A—1426  Extra Needs Deduction — TP 47

Revision 12-3; Effective July 1, 2012

TP 47

Allow a deduction equal to the difference between the TANF Caretaker EDG without Second Parent budgetary and recognizable needs for the legal parent (Step 2, Form H1119, Medical Programs Income Worksheet). Currently this extra needs figure is $235 ($313 – $78 = $235). Do not allow this deduction if the budget group's only income is the child's.

A—1427  Homeless Shelter Standard

Revision 13-4; Effective October 1, 2013

SNAP

Budget the homeless shelter standard shown in C-121.1, Deduction Amounts, for any month the household:

  • meets the definition of a homeless household;
  • has any amount of out-of-pocket shelter expenses; and
  • chooses the standard.

Households that choose the homeless shelter standard are not entitled to any other shelter deductions or utility standards.

Note: Ensure that the household has out-of-pocket shelter expenses before allowing the deduction.

A—1428  Medical Deduction

Revision 13-2; Effective April 1, 2013

SNAP

Allow a medical deduction for households with a member who meets the definition of elderly in B-431 or disabled in B-432 if the:

  • member who is elderly or disabled incurred the expense; and
  • medical expenses exceed $35 per month. If two or more people in the household qualify for a medical deduction, combine the medical expenses. If an applicant has been or will be reimbursed for a medical expense, deduct only the nonreimbursed amount.

Also allow expenses the household is still legally obligated to pay for someone who was a household member:

  • immediately before entering the hospital or nursing home; or
  • when the member died.

A—1428.1  Allowable Medical Expenses

Revision 14-2; Effective April 1, 2014

SNAP

Allow a deduction for the following medical expenses:

  • Medical care provided by a licensed practitioner or other qualified health professional (e.g., registered dietician).
  • Dental care provided by a licensed practitioner or other qualified health professional.
  • Psychotherapy care provided by a licensed practitioner or other qualified health professional.
  • Rehabilitation care provided by a licensed practitioner or other qualified health professional.
  • Hospitalization provided by a facility recognized by the state.
  • Outpatient treatment provided by a facility recognized by the state.
  • Nursing care provided by a facility recognized by the state.
  • Nursing home care provided by a facility recognized by the state.
  • Diapers for children with disabilities.
  • Incontinence pads for elderly or adults with disabilities.
  • Drugs prescribed by a licensed practitioner (including insulin).
  • Over-the-counter medication (including aspirin, ibuprofen, medicated creams, etc.) when approved by a licensed practitioner or other qualified health professional.
  • Medical supply costs (including rental) are deductible without a prescription/approval.
  • Sickroom equipment costs (including rental) are deductible without a prescription/approval.
  • Adaptive aids.
  • Health insurance policy costs (including dental insurance, vision insurance, etc.). The costs of policies that do not specifically cover medical costs (such as income maintenance or lump sums for death or dismemberment) are not allowable.
  • Hospitalization insurance policy costs (including hospital indemnity insurance, etc.). The costs of policies that do not specifically cover medical costs (such as income maintenance or lump sums for death or dismemberment) are not allowable.
  • Medicare premiums and cost-sharing/deductibles.
  • Spend down expenses incurred by Medicaid recipients.
  • Medicaid Buy-In for Children (MBIC) premium payments.
  • Dentures.
  • Hearing aids.
  • Prostheses.
  • Service animals. Cost of securing and maintaining any animal trained to serve the needs of a person with disabilities, such as a guide dog or dog to help the hearing impaired. This includes dog food and veterinarian bills.
  • Eyeglasses prescribed by a qualified health professional.
  • Transportation costs (such as trips to the doctor, hospital, therapy, drug store, or paying someone to drive the individual for medical services, etc.). Note: When determining transportation costs, the individual may choose to use 56 cents per mile instead of keeping track of actual expenses.
  • Lodging costs to obtain medical services.
  • Care costs. Cost of maintaining an attendant, home health aide, child care provider or housekeeper necessary because of age or illness. In addition to wages, deduct an amount equal to a one-person SNAP allotment if the applicant furnishes a majority of the attendant's meals. If the applicant has attendant care costs that could qualify under both medical and dependent care deductions, consider the cost a medical expense.
  • Repayment of a loan used to pay medical expenses.

Do not allow a deduction for the following medical expenses:

  • food supplements that can be purchased with SNAP, such as Ensure and baby formula, even if prescribed by a physician;
  • paid or past due expenses billed prior to the initial certification period (that is, before the person was receiving SNAP); or
  • herbal products.

A—1428.2  Budgeting Medical Deductions

Revision 14-2; Effective April 1, 2014

SNAP

Households that have a member who is eligible for a medical expense are eligible for a deduction using either the standard medical expense (SME) or actual medical expenses.

At ... then budget ... and verify ...
application, if the household has a medical expense(s) greater than $35 and less than or equal to $137 per month, the SME the household has medical expenses greater than $35.
application, if the household has medical expenses greater than $137 per month, actual medical expenses the actual monthly medical expense(s). If the household chooses not to provide verification of expenses exceeding $137, then allow the SME instead of actual expenses. The household must provide proof of expenses exceeding $35.
redetermination, if
  • the household already has actual medical expenses greater than $35 and less than or equal to $137, and
  • there is no change, or there is a change in the amount but the monthly medical expense is still greater than $35 and is less than or equal to $137,
the SME N/A, no verification is required.
redetermination, if the household does not already have the SME budgeted and the household states an eligible member has medical expenses greater than $35 and less than or equal to $137, the SME the household has medical expenses greater than $35.
redetermination, if the household does not already have actual medical expenses budgeted and the household states an eligible member has medical expenses greater than $137, actual medical expenses the actual monthly medical expense(s). If the household chooses not to provide verification of expenses exceeding $137, then allow the SME instead of actual expenses. The household must provide proof of expenses exceeding $35.
redetermination, if
  • the household has actual medical expenses greater than $137 already budgeted, and
  • there is a change in the monthly amount of more than $25,
  • the SME if the new total is greater than $35 and less than or equal to $137, or
  • actual medical expenses if the new total exceeds $137
the change in medical expenses.

When the expense ends, the advisor must end date the expense record in TIERS.

TIERS will subtract $35 from the SME or actual medical expenses to determine the net amount of the medical deduction.

If a member is disqualified for:

  • SNAP Employment and Training (E&T), a felony drug conviction, IPV, refusal to cooperate with the quality control review process, or being a fugitive, and is billed for or pays medical expenses — allow the full deduction; or
  • SSN noncompliance, citizenship requirements, alien status or the 18-50 work requirement, and is billed for or pays medical expenses for the disqualified member’s own expenses or the medical expenses of another household member who is elderly or has a disability — prorate the expense or the standard medical deduction among all household members and do not allow the pro rata share for individuals disqualified for SSN noncompliance, citizenship requirements, alien status or the 18-50 work requirement. Allow the full medical deduction if the medical expenses are paid by an eligible household member.

If the disqualified person has the only income, consider the expenses to be paid by that person.

The following information describes how the SME or actual medical expenses are prorated in the event a disqualified member pays for some or all of the allowable medical expenses. Determine eligibility for the SME or actual medical expenses based on verified medical expenses of all aged members or members with disabilities (including a disqualified member). Use the SME if the total verified medical expenses are greater than $35 and less than or equal to $137. The household can claim actual expenses if the total verified expenses exceed $137.

If ... then ... and ...
the household is eligible for the SME, prorate the SME among all household members use the eligible household members’ portion of the SME in the budget. (In TIERS enter the amount each member actually pays, and TIERS prorates accordingly.)
the household is eligible for actual medical expenses, prorate the portion paid by the disqualified member among all household members add the eligible household members’ prorated portion to the actual amount of medical expenses any eligible member pays, and use this amount in the budget. (In TIERS enter the amount each member actually pays, and TIERS prorates accordingly.) 

Example 1 (SME): The household consists of three eligible members with total verified monthly medical expenses of $75 and one member who is disqualified due to citizenship. The disqualified person pays for half of the medical expenses, and an eligible person pays for the other half. The household is eligible for the SME because the total verified monthly medical expenses are $75 (greater than $35 but less than $137). Prorate the SME among the eligible members, because the disqualified member pays for part of the medical expenses.

$137 / 4 = $34.25
$34.25 x 3 = $102.75

In TIERS, enter a medical expense of $37.50 ($75/2) for both the disqualified person and for the eligible member, which is the amount of monthly medical expenses each member actually pays, and TIERS will budget a prorated SME of $102.75.

Example 2 (Actual Medical Expenses): Consider the same household situation as Example 1, except that the monthly amount of verified medical expenses is $200. The disqualified member pays $100 of the medical expenses. The household is eligible for the actual amount of medical expenses. Prorate the amount the disqualified member pays and add it to the portion paid by the eligible member, to determine the total amount of the medical deduction.

$100 / 4 = $25
$25 x 3 = $75
$75 + $100 = $175

In TIERS, enter:

  • $100, for the eligible member; and
  • $100, for the disqualified member (TIERS will prorate the allowable amount to $75).

Finally, $35 must be subtracted from the total deduction to determine the net amount of the medical deduction (TIERS does this as a final step).

A—1428.2.1  Determining Allowable Costs for Individuals with a Medicare Prescription Drug Plan Part D

Revision 07-2; Effective April 1, 2007

SNAP

If the applicant is enrolled in Medicare Drug Plan Part D, budget these individuals' prescription costs following normal rules by reasonably anticipating the individual's un-reimbursed out-of-pocket expenses.

Note: The household may opt for the SME.

A—1428.3  Budgeting Options

Revision 13-2; Effective April 1, 2013

SNAP

When averaging the medical expenses, budget the SME for each month of the certification period, as long as the household’s allowable averaged monthly medical expense is greater than $35. If the expense recurs monthly or more often, and the medical expense exceeds $35 and is less than or equal to $137 per month, budget the SME for each month of the certification period. When allowable medical expenses for the household exceed the SME, budget the actual medical expenses. Use the following chart to determine when to budget the SME or actual medical expenses.

If the expense ... then budget the ...
recurs less often than monthly and the amount averaged for each month is less than or equal to $35, actual amount of verified actual medical expense in the month billed, or use the SME in the month billed if the medical expense is greater than $35 and less than or equal to $137.
recurs less often than monthly and the amount averaged for each month is greater than $35 and less than or equal to $137 per month, SME for each month of the certification period.
recurs less often than monthly and the amount averaged for each month is greater than $137, averaged amount of actual verified medical expenses for each month. Budget the SME only if the household chooses to use the SME or fails to provide enough verification to qualify for actual medical expenses.
occurs one time and the amount averaged over the certification period is less than or equal to $35 per month, actual amount of verified medical expenses in the month billed, or use the SME in the month billed if the medical expense is greater than $35 and is less than or equal to $137.
occurs one time and the amount averaged over the certification period is greater than $35 and less than or equal to $137 per month, SME for each month of the certification period.
occurs one time and the amount averaged over the certification period is greater than $137 per month, averaged amount of the actual medical expenses for each month. Budget the SME only if the household chooses to use the SME or fails to provide enough verification to qualify for actual medical expenses.

Note: Allow a deduction for payments made on a monthly payment plan set up before the expense became past due.

A—1428.4  Change in Medical Expenses During Certification

Revision 13-2; Effective April 1, 2013

SNAP

Supplemental Nutrition Assistance Program (SNAP) households are not required to report changes in medical expenses during the certification period.

Advise households that a new one-time expense or change in a recurring medical expense that is reported and verified timely may be budgeted in the certification period.

If the household voluntarily reports a change in medical expenses and the change is reported and verified timely, the advisor must consider the newly reported change to determine if the individual should consider switching from the SME to actual expenses.

A medical expense, paid or unpaid, is reported timely if it is reported before it becomes past due to the provider

  • anytime during the certification period, or
  • at the next redetermination.

A one-time medical expense reported and verified too late to budget in the current certification period may be deducted in the first month of the next certification period or averaged over the next certification period.

When the household timely reports and provides timely verification of a paid or unpaid expense (one-time medical expense or recurring) at the redetermination interview

  • deduct it in the first month of the new certification period, or
  • average it over the new certification period.
When a change in medical expenses is reported during the certification period by a ... then ...
household member or the authorized representative, follow procedures in Changes, B-600, for both increases and decreases in benefits.
source other than a household member or the authorized representative, act on the change if it is considered to be verified at the time of receipt and the change can be made without contacting the household for additional information or verification. Note: If the change would require contact with the household, do not act on the change until the household is recertified.

A—1428.5  Switching Between Actual Medical Expenses and the Standard Medical Expense

Revision 13-2; Effective April 1, 2013

SNAP

Households may switch between actual expenses and the standard medical expense (SME) at redetermination. Households may also switch at an incomplete review if changes in medical expenses are reported and it is to the household's advantage to switch from the SME to actual medical expenses.

A—1429  Shelter Costs

Revision 13-2; Effective April 1, 2013

SNAP

Allow a deduction for all households that incur a shelter expense using the following rules.

  • Deduct monthly shelter costs that exceed 50% of the income remaining after other deductions.
  • The shelter deduction cannot exceed the maximum shown in C-121.1 unless there is a member of the household who is elderly or disabled as defined in B-430.
  • Do not allow the uncapped deduction for households that only receive a medical deduction for a former member.
  • Allow a deduction only for charges for the shelter the household currently occupies. Exceptions:

    • If a required household member is employed in another city and maintains a residence there, allow shelter costs for both the regular residence and the residence maintained where the member is employed. The household can claim one of the utility allowances.
    • See A-1429.2, Shelter Deductions for an Unoccupied Home.
  • Households sharing shelter costs are both entitled to a shelter deduction for their share.
  • Do not deduct shelter expenses paid by an exempt vendor payment or reimbursement. Exception: Allow a deduction for utility expenses as noted in A-1429.3, Utility Allowances.
  • Allow one of the utility allowances/standards.
  • Note: Do not prorate the utility and telephone standards for households with disqualified members or households sharing utility expenses.

  • Deduct property taxes that are averaged as explained in A-1411, Rules that Apply to Deductions, even if the expense is paid or past due when reported.

A—1429.1  Allowable Shelter Costs

Revision 14-2; Effective April 1, 2014

SNAP

Allowable costs include:

  • rent, mortgage payments and other continuing charges leading to ownership of the property, such as mandatory maintenance and homeowner association fees;

    Notes:

    Costs to repay a loan are allowable shelter costs only if the lender places a lien on the property as a result of the loan. The loan may be for home repair/improvement or for purposes unrelated to the home, but the payments due are considered a mortgage if the loan results in a lien on the property.

    Maintenance fees must be mandatory as a condition for the continuation of residence for renters and homeowners. The fees must be a required fee payment, not a requirement to maintain the property.

  • taxes and insurance on the shelter, but not its contents. Allow the cost of insurance for the shelter and the contents if they cannot be separated;
  • charges for fuel, utilities, sewage and garbage collection (these costs are used to determine whether the household may be eligible for one of the utility expense deductions found in A-1429.3, Utility Allowances);
  • expenses related to a telephone, including a cell phone (these costs are used to determine whether the household may be eligible for a standard telephone deduction); and
  • unreimbursed expenses for the repair of a home damaged by a natural disaster.

Note: Shelter costs do not include one-time deposits.

A—1429.2  Shelter Deductions for an Unoccupied Home

Revision 10-2; Effective April 1, 2010

SNAP

Budget the actual shelter costs for a home (excluding utility costs) unoccupied because of employment or training, illness (including receiving medical treatment), natural disaster or casualty loss (fire, flood, state of disrepair, etc.), if the:

  • household intends to return to the home;
  • current occupants are not claiming the same shelter costs the owner is claiming for SNAP purposes; and
  • home is not leased or rented.

The household may claim both the shelter costs of its current residence and the cost of the unoccupied home, and a single utility standard (if the household is eligible for one), but no more than the maximum excess shelter deduction (if applicable).

A—1429.3  Utility Allowances

Revision 11-2; Effective April 1, 2011

Determine the appropriate utility allowance at application, redetermination and when the individual reports a change in utility expenses.

A—1429.3.1  Standard Utility Allowance (SUA)

Revision 11-1; Effective January 1, 2011

SNAP

Budget the SUA in the amount shown in C-121.1, Deduction Amounts. Do not allow any other expenses related to utilities when using the SUA. Allow the SUA for households that:

  • have or anticipate out-of-pocket heating or cooling costs separate from their rent or mortgage payments during the next 12 months; or
  • reasonably anticipate receiving a vendor or direct payment from CEAP or the Energy Crisis Program funded under the Low Income Home Energy Assistance Act (LIHEAA) in any of the next 12 months, even if they do not have an out-of-pocket expense.

Notes:

  • Cooling costs are limited to the cost related to the operation of an air conditioning system, an evaporative cooler (or swamp box) or window unit air conditioner(s). A fan is not considered a cooling cost for the purposes of qualifying for the SUA.
  • When households share heating or cooling costs and a meter (whether they live together or not), each household is eligible for the SUA.

A—1429.3.2  Basic Utility Allowance (BUA)

Revision 14-1; Effective January 1, 2014

SNAP

Budget the BUA in the amount shown in C-121.1, Deduction Amounts, for households that incur utility expenses other than just a telephone expense but do not have heating or cooling costs separate from their rent or mortgage payments. Do not allow any other expenses related to utilities when using the BUA.

When households share utility costs other than a telephone but do not have heating or cooling costs (whether they live together or not), each household is eligible for the BUA.

A—1429.3.3  Determining the Appropriate Utility Allowance

Revision 13-2; Effective April 1, 2013

SNAP

Use the following chart as a guide to determine the appropriate utility allowance the household is eligible to receive.

If the individual ... then the household is eligible for the ...
owns or is buying their home and is billed for utilities that include heating or cooling costs ... SUA
owns or is buying their home and is billed for utilities that do NOT include heating or cooling costs ...
(Example: the household does not have air conditioning and cools their home with fans and uses a cooking stove for heating.)
BUA
receives LIHEAA payments, such as CEAP or Energy Crisis ... SUA
rents and is billed for utilities from an individual meter for heating or cooling costs ... SUA
rents from a landlord who lives in a separate residence and the landlord bills the household a standard amount for the heating/cooling costs ... SUA
lives in public housing and is billed only for excess heating or cooling costs ... SUA
shares the expense and a meter with another household who lives in a separate residence on the same property and the other household is billed for the utilities that include heating and cooling costs ... SUA
lives together in the same residence with a friend or family member and the individual
  • shares the heating/cooling expenses with the friend or family member (even if the friend or family member is billed for the utilities that include heating/cooling costs);
  • pays the cooling bill and friend or family member pays the heating;
  • pays the friend or family member a set amount for the utilities that include heating and/or cooling costs separate from the rent ...
SUA
lives together in the same residence with another household and the individual shares the utility expenses that do not include heating or cooling costs separate from the rent ... BUA
lives together in the same residence with another household who pays for the heating/cooling costs and the individual is only responsible for the water bill ... BUA
pays only the telephone expense and all other utility expenses are included in the shelter costs ... telephone standard
lives together in the same residence with other households who share the heating, cooling or other utility costs and the individual is only responsible for the telephone bill ... telephone standard
lives with a disqualified member and the household pays heating or cooling costs ... SUA
lives with a disqualified member and the household pays non-heating or non-cooling costs ... BUA


A—1429.4  Telephone Standard

Revision 10-2; Effective April 1, 2010

SNAP

Budget the telephone standard shown in C-121.1, Deduction Amounts, for households that have a telephone expense (including a cell phone) and do not claim the BUA, SUA or the homeless shelter standard.

A—1430  Standard Deduction

Revision 02-1; Effective January 1, 2002

SNAP

Budget the standard deduction as shown in C-121.1 for each household.

A—1440  Verification Requirements

Revision 12-3; Effective July 1, 2012

All Programs except TP 40

If an individual fails to provide a required verification of a deduction, do not deny the EDG. Disallow the deduction. If the individual subsequently provides verification of the deduction, use report of change guidelines to budget the deduction.

TANF and Medical Programs except TP 40

Verify dependent care at application, complete review or if the amount changes.

Verify the following at application, complete review or if the amount changes:

  • actual amount of child support and alimony paid to persons outside the home, and
  • actual amount of payment to persons outside the home that a person can claim as tax dependents or is legally obligated to support.

Exception: At TP 43, TP 44, TP 47 and TP 48 renewals, do not verify a deduction unless it is new or the individual reports a change in the amount.

TP 40 — Accept the individual's statement.

SNAP

Verify dependent care expenses at application, recertification and when the individual reports a change in dependent care if verification can be obtained during the interview. If verification cannot be obtained during the interview, accept individual's statement without verification if the household states the total dependent care expense for the EDG does not exceed $300 per month and it is not questionable. Pend the EDG only if the expense claimed is questionable or exceeds a total of $300 per month.

Verify the:

  • household's legal obligation to pay child support;
    • by viewing a court order, administrative order, legally enforceable separation agreement, other official document; or
    • using a collateral contact with access to an official document.
  • amount of child support obligation.
  • actual amount of child support paid by viewing:
    • attorney general or county registry collection and distribution records,
    • canceled checks,
    • wage withholding statements,
    • withholding information from unemployment compensation, or
    • statements from the custodial parent regarding direct payments or third-party payments the household pays or expects to pay on behalf of the custodial parent.

    Note: Documents used to verify the household's legal obligation to pay child support are not acceptable verification of the household's actual payments.

  • medical expenses. See A-1428.2, Budgeting Medical Deductions.
  • rent or mortgage costs if the expense is questionable or if a regional requirement. If the requested proof is not provided, do not allow the expense.
  • shelter cost of an unoccupied home at initial application, changes and recertifications.

A—1441  Verification Sources

Revision 13-2; Effective April 1, 2013

All Programs

Dependent Care

  • Statement or a current bill from provider
  • Current receipts
  • Income tax return

Child Support Paid by Household — Verifying Amount of Child Support Paid

  • Attorney General collection and distribution records
  • County Clerk records
  • Cancelled checks
  • Wage withholding statements
  • Withholding statements from unemployment compensation
  • Statement from the custodial parent regarding direct payments or third party payments paid in their behalf

TANF and Medical Programs

Alimony

  • Divorce decree
  • Court order
  • Court records
  • Statement from the individual who is receiving the alimony

Dependents Outside the Home

  • Previous year tax records
  • Bank records
  • Copies of money orders
  • Cancelled checks
  • Statement from the individual who is receiving the payments

SNAP

Medical Expenses

  • Bills (or copies of bills) from providers of health insurance, services, and products
  • Statements from providers. Note: If covered by insurance this statement needs to show balance due after insurance pays
  • Health insurance policies
  • Statement from a qualified health professional indicating that over-the-counter medication, medical equipment, or supplies are prescribed

Child Support Paid by Household — Verifying Legal Obligation

  • Court order
  • Administrative order
  • Legally enforceable separation agreement
  • Divorce decree
  • Attorney General child support enforcement records
  • County Clerk records

Mortgage

  • Statement from mortgage company or bank
  • Cancelled checks
  • Mortgage receipt

Rent

  • Statement from landlord or apartment manager
  • Rent receipt
  • Cancelled checks
  • Current lease contract showing the payment amount. Note: Common practice of leasing companies is to show the monthly market amount on the first page of a lease, not the actual payment amount of the lease.

Property Taxes

  • Tax bill
  • Cancelled check
  • Statement from tax office employee
  • Property tax information on the Data Broker System

Home Insurance

  • Insurance company bill
  • Cancelled check
  • Statement from insurance company employee

Utilities

  • Utility company bill
  • Cancelled checks
  • Statement from utility company employee

Related Policy
Questionable Information, C-920
Providing Verification, C-930

A—1450  Documentation Requirements

Revision 14-1; Effective January 1, 2014

All Programs

Document:

  • the type of deduction allowed;
  • the person for whom a deduction is allowed and how the person qualifies;
  • the source/provider to whom a deduction expense is paid (name, address and/or telephone number);
  • date and amounts paid;
  • calculations used to determine monthly amounts;
  • the reason a household qualified for a dependent care deduction when it is questionable or not obvious;
  • justification for not allowing earned income deductions;
  • if the individual chose the standard medical expense (SME) when the individual's expenses exceed the SME; and
  • an explanation of standard deductions —
    • document why the household did not qualify for a utility deduction; or
    • why one of the utility standards (standard utility allowance, basic utility allowance, telephone standard) was budgeted.

Exception: Utility service providers’ names and addresses are not required documentation.

TANF

Document the relationship of the child care provider to the child.

Related Policy
The Texas Works Documentation Guide