Texas Health and Human Services Commission
Texas Works Handbook
Effective: October 1, 2015
Part A — Section 1400
A—1410 General Policy
All Programs except TP 45
Certain deductions may be allowed when determining countable income.
Households may be allowed the following deductions:
- work-related expense deduction (up to $120);
- 90 percent earned income deduction;
- dependent care;
- diversions; and
- $75 disregard.
Households may be allowed the following deductions:
- 20 percent earned income deduction for households with earnings;
- standard deduction;
- medical costs for household members who are elderly or have a disability;
- 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 except TP 45
Households may be allowed the following Modified Adjusted Gross Income (MAGI) deductions:
- standard MAGI income disregard;
- alimony paid;
- educational expenses/student loan interest;
- moving expenses;
- tuition or GI Bill deduction;
- educator expenses;
- expenses of fee-basis government officials, expenses of performing artists, and expenses of reservists;
- health savings account;
- deductible part of self-employment tax;
- self-employed individual retirement account (IRA), simple IRA, and qualified plan deductions;
- self-employed health insurance;
- penalty on early withdrawal;
- IRA deduction; and
- domestic production activities deduction.
Since there is no income test, deductions are not considered as a factor in determining eligibility for TP 45.
A—1411 Rules That Apply to Deductions
TANF and SNAP
Actual amounts (amounts that have already been billed) are used for the interview month, and amounts that have not been billed may be projected.
- The following expenses are not deducted:
- expenses paid to another member of the same Eligibility Determination Group (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.
- The most recent month's bills are used to project expenses, and unexpected changes should be considered during the certification period.
- Only household expenses expected during the certification period should be considered.
- The income conversion factors are used to determine monthly expenses if expenses are billed weekly, biweekly or semi-monthly.
Deductions must not be allowed 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: The EDG must not be denied for failure to provide the verification.
- An expense is allowed, regardless of when or if the household intends to pay it.
- If expenses are not averaged, the expenses should be deducted in the month the expense is billed (or the month it becomes due if no bill is sent). Exception: See A-1428.4, Change in Medical Expenses During Certification.
- A deduction for expenses that are legally due monthly is allowed even when the household pays them in advance.
- Households may choose to average expenses that fluctuate or occur less often than monthly. These expenses are averaged 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, the average is recalculated.
- 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.
Medical Programs except TP 45
MAGI rules allow certain expenses to be deducted from the individual’s income in order to determine the MAGI individual income.
- For all MAGI expenses that have been verified using last year’s federal income tax return, take the expense amount from the federal income tax return and divide that amount by 12 to determine the monthly expense amount for use for applicant or recipient.
- For the alimony paid expenses verified using other acceptable verification sources, use the actual amount verified for the MAGI alimony paid expense.
A—1420 Types of Deductions
A—1421 Child Support Deductions
Diversion policy in A-1424, Diversions, Alimony, and Payments to Dependents Outside the Home, applies.
Advisors should 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 SNAP household; or
- actually pays for an individual outside the SNAP household; or
- makes to a child support agency.
A—1421.1 Allowable Child Support Deductions
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.
Payments for alimony or spousal support are not deductible.
A—1421.2 Budgeting Child Support Deductions
TANF and SNAP
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. The child support expense for the household member paying the expense is allowed.
If the household member with the legal obligation or the household member paying the legal obligation leaves the home, the household's eligibility for the deduction must be redetermined.
A child support deduction for households that pay legally obligated child support is allowed. For current support, a deduction up to and including the legally obligated amount is allowed. For arrears, only the amount a household member actually pays is allowed.
For households with new obligations, the anticipated amount is budgeted if the household member can reasonably explain the basis for future payment. For households with previous payments, the amount (not to exceed the legal obligation) is averaged and projected over the certification period. Any other anticipated changes that would affect the payment should be considered.
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. Only the legally obligated amount a household member pays is allowed as a deduction, 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. The individual is allowed 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.|
The full child support expense is deducted when another household member pays the legally obligated child support on behalf of a disqualified member.
A—1422 $75 Disregard Deduction
Up to $75 of child support received before the certification date may be deducted.
Child Support, A-1326.2
A—1423 Dependent Care Deduction
The maximum dependent care deduction is up to and including:
- $200 a month for each child under age 2,
- $175 a month for each child age 2 or older, and
- $175 a month for each adult with disabilities.
An earned income deduction is allowed 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 Temporary Assistance for Needy Families (TANF) 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. The expense for household members meeting these requirements is allowed, even if there are other adults in the household who could care for the children.
The deduction in the budgetary and recognizable needs tests is allowed.
A deduction is allowed for the actual cost of unreimbursed payments when the individual incurs an expense for the care of a child or adult with disabilities, or the transportation of a child or adult with disabilities to and/or from day care or school. The deduction is allowed if the expense is necessary for a household member to:
- seek or continue employment;
- attend training; or
- go to school.
The expense for household members who meet one of the above conditions is allowed, even if there are other adults in the household who could care for the children. These expenses are deducted 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.
Disqualified Members, A-1362
A—1424 Diversions, Alimony, and Payments to Dependents Outside the Home
The following deductions from the income of a caretaker, second parent, or minor parent are allowed before either of the two needs tests are applied (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 whom 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). The needs figure applicable to the number of noncertified members is used.
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 is not diverted.
- 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 whom 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.
Step 3 on Form H1100, Addendum Income Worksheet, should be completed to allow this deduction.
Alimony paid by members of the MAGI household composition may be deducted.
A—1424.1 Determining the Needs Figure
The following table may be used 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 ...|
|child under age 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 age 19 during one of the budget months, the budgetary needs figure of an adult is used beginning with the month after the child turns age 19.
A—1425 Earned Income Deductions
Earned income deductions are the:
- standard work-related expense (up to $120);
- 1/3 earned income disregard for applicants;
- 90 percent 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 the Texas Health and Human Services Commission (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 it 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. Deductions are not allowed until the next complete review.
Deductions beginning with the Texas Integrated Eligibility Redesign System (TIERS) effective month are allowed when processing the next complete review.
A 20 percent deduction of all gross earned income is allowed. See B-752, Determining Claim Amounts, for exceptions.
A—1425.1 Work-Related Expense ($120 and 20%)
A work-related expense deduction of up to $120 a month (not to exceed the person's monthly earnings) is allowed 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, this deduction is allowed in the budgetary and recognizable needs test.
Allow a 20 percent deduction of all gross earned income.
A—1425.2 1/3 Disregard for Applicants
Applicant households that must pass the 100 percent budgetary needs test are also required to pass Part A of the 25 percent 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
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, 90 percent of the remaining earnings (up to a cap of $1,400) is subtracted. This deduction is allowed 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: A month in which a full-family sanction is imposed is not counted as one of the 90 percent earned income deduction (EID) months.
The 12-month period is a fixed period that begins with the first month the 90 percent 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 percent deduction. This period is referred to as the 90 percent EID eligibility period.
If the individual has not used all four months of the deduction within the 90 percent EID eligibility period, a new fixed 12-month period and four new months of the 90 percent EID are allowed after the first 12-month period ends. The new 12-month period begins with the first month that the individual uses the 90 percent deduction again.
If the household member received the 90 percent deduction for four months in a 12-month period, the member may not receive it again until:
- TANF 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 percent EID ineligibility period and begins with the first full month of denial after the individual used the fourth month of the 90 percent deduction.
A—1425.3.1 Who Is Eligible for the 90% Earned Income Deduction
A household member is eligible to receive the 90 percent 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, Social Security number (SSN), Choices, third-party resource (TPR) requirements, intentional program violation (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 percent EID for eligible EDG members. The 90 percent EID page appears by choosing the screen from the left navigation bar. The effective begin and end dates are used 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, the client answers "yes" to the questions, "Does individual decline the TANF 90 percent earned income deduction?" and "Does individual decline the FMA 90 percent earned income deduction?" on the 90 percent 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
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.
The deduction is not allowed if the individual has already received the 90 percent deduction for four months in a 12-month period. When the 90 percent ineligibility period ends, the deduction is not allowed again until the individual obtains new employment. The new employment must begin after the 90 percent ineligibility period ends.
A—1425.3.3 Removing the 90% Earned Income Deduction
After the individual receives the 90 percent 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.
A—1427 Homeless Shelter Standard
The homeless shelter standard shown in C-121.1, Deduction Amounts, is budgeted 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: Advisors must ensure that the household has out-of-pocket shelter expenses before allowing the deduction.
A—1428 Medical Deduction
- member who is elderly or has a disability incurred the expense; and
- medical expenses exceed $35 a 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.
Expenses that the household is still legally obligated to pay are allowed 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
Deductions are allowed 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.
- Hearing aids.
- 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.
Deductions are not allowed 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
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 medical expenses greater than $35 and less than or equal to $137 a month,||the SME,||the household has medical expenses greater than $35.|
|application, if the household has medical expenses greater than $137 a 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.|
||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.|
||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 — the full deduction is allowed; 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 — the expense or the standard medical deduction is prorated among all household members and the pro rata share for individuals disqualified for SSN noncompliance, citizenship requirements, alien status, or the 18-50 work requirement is not allowed. The full medical deduction is allowed if the medical expenses are paid by an eligible household member.
If the disqualified person has the only income, the expenses are considered 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.
Eligibility for the SME or actual medical expenses is determined based on verified medical expenses of all aged members or members with disabilities (including a disqualified member). The SME is used if the total verified medical expenses are greater than $35 and less than or equal to $137. The household may 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). The SME is prorated 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, a medical expense of $37.50 ($75/2) is entered 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): The household situation is the same 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. The amount the disqualified member pays is prorated and added 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
The following amounts are entered in TIERS:
- $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
If the applicant is enrolled in Medicare Drug Plan Part D, the individual’s prescription costs are budgeted following normal rules by reasonably anticipating the individual's unreimbursed out-of-pocket expenses.
Note: The household may opt for the SME.
A—1428.3 Budgeting Options
When averaging the medical expenses, the SME is budgeted 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 a month, the SME is budgeted for each month of the certification period. When allowable medical expenses for the household exceed the SME, the actual medical expenses are budgeted. The following chart is used 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 a 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 a 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 a month,||SME for each month of the certification period.|
|occurs one time and the amount averaged over the certification period is greater than $137 a 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: A deduction is allowed 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
SNAP households are not required to report changes in medical expenses during the certification period.
Households should be advised 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:
- the expense is deducted in the first month of the new certification period, or
- averaged 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 the procedures in B-600, Changes, 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
Households may switch between actual expenses and the 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
A deduction is allowed for all households that incur a shelter expense using the following rules:
- Monthly shelter costs that exceed 50 percent of the income remaining after other deductions may be deducted.
- The shelter deduction cannot exceed the maximum shown in C-121.1, Deduction Amounts, unless there is a member of the household who is elderly or has a disability as defined in B-430, Households with Elderly Members or Members with a Disability.
- The uncapped deduction is not allowed for households that only receive a medical deduction for a former member.
- A deduction is allowed 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, shelter costs are allowed for both the regular residence and the residence maintained where the member is employed. The household may 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.
- Shelter expenses paid by an exempt vendor payment or reimbursement are not deductible. Exception: A deduction for utility expenses as noted in A-1429.3, Utility Allowances, is allowed.
- One of the utility allowances/standards is allowed.
Note: The utility and telephone standards for households with disqualified members or households sharing utility expenses must not be prorated.
- Property taxes that are averaged as explained in A-1411, Rules That Apply to Deductions, are deducted, even if the expense is paid or past due when reported.
A—1429.1 Allowable Shelter Costs
Allowable costs include:
- Rent, mortgage payments and other continuing charges leading to ownership of the property, such as mandatory maintenance and homeowner association fees, are allowed.
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, are allowed. The cost of insurance for the shelter and the contents are allowed if they cannot be separated.
- Charges for fuel, utilities, sewage, and garbage collection 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, are used to determine whether the household may be eligible for a standard telephone deduction.
- Unreimbursed expenses for the repair of a home damaged by a natural disaster are allowed.
Note: Shelter costs do not include one-time deposits.
A—1429.2 Shelter Deductions for an Unoccupied Home
The actual shelter costs are budgeted 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
The appropriate utility allowance is determined at application, redetermination, and when the individual reports a change in utility expenses.
A—1429.3.1 Standard Utility Allowance (SUA)
- 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.
- 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)
The BUA is budgeted 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. No other expenses related to utilities are allowed 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
The following chart may be used 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.)
|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:
|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
The telephone standard is budgeted as 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
The standard deduction is budgeted as shown in C-121.1, Deduction Amounts, for each household.
Medical Programs except TP 45
All households receive the standard MAGI income disregard listed in C-131.4, Standard MAGI Income Disregard, by MAGI household size. This disregard is equal to five percentage points of the Federal Poverty Income Limit (FPIL) and is applied when calculating MAGI household income, as explained in A-1341, Income Limits and Eligibility Tests, Medical Programs, Step 4.
A—1440 Verification Requirements
All Programs except TP 45
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.
Dependent care must be verified at application, complete review, or if the amount changes.
The following amounts must be verified 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 whom a person can claim as tax dependents or is legally obligated to support.
Dependent care expenses must be verified 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, the individual's statement may be accepted without verification if the household states the total dependent care expense for the EDG does not exceed $300 a month and it is not questionable. The EDG is pended only if the expense claimed is questionable or exceeds a total of $300 a month.
The following amounts must be verified:
- 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 the 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, the expense is not allowed.
- shelter cost of an unoccupied home at initial application, changes, and recertifications.
Medical Programs except TP 45
All MAGI expenses must be verified at application, complete review, or if the amount changes.
A—1441 Verification Sources
TANF and SNAP
- Statement or a current bill from provider,
- Current receipts, or
- 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, or
- Statement from the custodial parent regarding direct payments or third-party payments paid on their behalf.
TANF and Medical Programs except TP 45
- Divorce decree,
- Court order,
- Court records, or
- 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, or
- Statement from the individual who is receiving the payments.
- Bills (or copies of bills) from providers of health insurance, services, and products;
- Statements from providers;
Note: If the individual is covered by insurance, this statement needs to show the balance due after insurance pays.
- Health insurance policies; or
- 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, or
- County Clerk records.
- Statement from mortgage company or bank,
- Cancelled checks, or
- Mortgage receipt.
- Statement from landlord or apartment manager,
- Rent receipt,
- Cancelled checks, or
- Current lease contract showing the payment amount. Note: A 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.
- Tax bill,
- Cancelled check,
- Statement from tax office employee, or
- Property tax information on the Data Broker System.
- Insurance company bill,
- Cancelled check, or
- Statement from an insurance company employee.
- Utility company bill,
- Cancelled checks, or
- Statement from utility company employee.
Medical Programs except TP 45
An applicant’s or recipient’s federal income tax return from the previous year is the only valid verification source that can be used to verify all MAGI expenses except for alimony paid.
Note: A federal income tax return from the previous year is valid verification for MAGI expenses until the client files a new federal income tax return but no later than April 15 of the following year. If an individual files an extension and submits proof of an extension, the previous year’s federal income tax return is valid until October 15. If an applicant or recipient does not file federal income taxes, he or she will not be able to provide verification and, therefore, will not be able to claim any MAGI expenses other than alimony paid.
A—1450 Documentation Requirements
All Programs except TP 45
Documentation is required for the following:
- 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; and
- calculations used to determine monthly amounts.
TANF and SNAP
Documentation is required for the following:
- the reason a household qualified for a dependent care deduction when it is questionable or not obvious; and
- justification for not allowing earned income deductions.
The relationship of the child care provider to the child must be documented.
Documentation is required for the following:
- if the individual chose the 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.
The Texas Works Documentation Guide