Q & A: Countable Income

Countable Income

Crime victim payments

Q1: How does the Antiterrorism and Effective Death Penalty Act of 1996 affect a family's access to TANF benefits?

A1: Section 234 of the above-cited Act, regarding the Crime Victims Fund, amends section 1403 of the Victims of Crime Act of 1984 (42 U.S.C. 10602) to read:

(c) Exclusion From Income for Purposes of Means Tests.--Notwithstanding any other law, for the purpose of any maximum allowed income eligibility requirement in any Federal, State, or local government program using Federal funds that provides medical or other assistance (or payment or reimbursement of the cost of such assistance) that becomes necessary to an applicant for such assistance in full or in part because of the commission of a crime against the applicant, as determined by the Director, any amount of crime victim compensation that the applicant receives through a crime victim compensation program under this section shall not be included in the income of the applicant until the total amount of assistance that the applicant receives from all such programs is sufficient to fully compensate the applicant for losses suffered as a result of the crime.

For TANF, this provision means that, in most cases, States will need to exclude the full amount received under the crime victims compensation program from income in determining the family's eligibility for benefits. TANF agencies should consult with their State victim compensation offices as well as the Office of Victims of Crime in the Department of Justice when implementing this provision.

Tax Refund Disregard Period Required Under P.L. 111-312:

Q1: As explained in TANF-ACF-PI-2011-01, under The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (P.L. 111-312), States, DC, Tribes, Guam, Puerto Rico, and the Virgin Islands are required to disregard Federal tax refunds received after December 31, 2009, and on or before December 31, 2012, as income and as resources for a period of 12 months when determining eligibility for TANF and Adult Programs (Aid to the Aged, Blind, and Disabled). What month can jurisdictions begin counting the 12 month disregard period? Does the disregard begin to affect eligibility in the month of receipt or the month following receipt?

A1: Section 728 of P.L. 111-312 states, “Notwithstanding any other provision of law, any refund (or advance payment with respect to a refundable credit) made to any individual under this title shall not be taken into account as income, and shall not be taken into account as resources for a period of 12 months from receipt, for purposes of determining the eligibility of such individual (or any other individual) for benefits or assistance (or the amount or extent of benefits or assistance) under any Federal program or under any State or local program financed in whole or in part with Federal funds” (emphasis added).

However, the law does not explicitly state when eligibility for a program is affected by the disregard of tax refunds as income or resources. Therefore, for TANF purposes, jurisdictions may apply any reasonable interpretation of the statute and use any applicable existing rules for when the disregard begins to affect eligibility. Jurisdictions that do not have such a rule for TANF may use an interpretation applied by other Federal agencies, such as the Centers for Medicare and Medicaid Services (CMS) or the Supplemental Nutrition Assistance Program (SNAP), for ease of administration.

For example, CMS’s policy concerning when the 12 month disregard period begins is based on the basic rules for counting income and resources under the Medicaid program. Under Medicaid, a tax refund is counted as income in the month of receipt; if it is still retained by the recipient, it becomes countable as a resource beginning with the month following the month of receipt. A tax refund cannot be treated as both income and a resource at the same time. Therefore, under P.L. 111-312, a Federal tax refund would be disregarded as income in the month of receipt, and then disregarded as a resource for another 12 months starting with the month it would first be considered a resource under Medicaid rules.

SNAP’s policy is that Federal tax refunds received after December 31, 2009, are disregarded from SNAP eligibility determinations as resources for a period of 12 months from receipt. The 12 month period begins on the date of receipt. For example, if a household receives a refund on March 15, 2011, it will be excluded as a resource through March 14, 2012.

Accordingly, in the great majority of circumstances, the Medicaid and SNAP rules will have the same practical effect. Note, however, that in the above example, if a household receives a tax refund on March 15, 2011, then it will only affect SNAP eligibility for the month of March 2012 if the household either newly applies for SNAP benefits or is recertified on or after March 15, 2012. In contrast, the Medicaid exclusion will apply for the full month of March 2012.

Q2: Based on Section 728 of P.L. 111-312, the requirement to disregard tax refunds as income and as resources for a period of 12 months shall not apply to any amount received after December 31, 2012. Should jurisdictions disregard tax refunds received in December 2012 from eligibility determinations for the following 12 months, through November 2013? Or does the disregard itself end December 31, 2012?

A2: Under P.L. 111-312, the disregard applies to tax refunds received on or before December 31, 2012, and the disregard period would then last 12 months; therefore the law will affect eligibility determinations after December 31, 2012.

Q3:  How should settlement funds received by program recipients or applicants be treated for purposes of TANF eligibility?

A3:  We suggest that jurisdictions consult with their legal counsel with respect to specific situations that arise.  Generally, if income from a settlement or judgment is received by program recipients or applicants and it is not governed by a specific law that indicates how the funds should be treated, or the order for the judgment does not clearly state how the income is to be treated, then the TANF jurisdiction (i.e., State, Tribe, or Territory) has the authority to determine how the funds will be treated for purposes of determining financial eligibility for the TANF program.

Q4: The U.S. Census Bureau performs a census of the nation’s inhabitants every tenth year, and nationwide hires many people, including many TANF recipients, for a range of temporary census-related positions. May states and tribes disregard income in benefit calculations that TANF recipients receive as temporary census employees? Must a state or tribe submit a TANF plan amendment detailing its decision to disregard census income?

A4:  Yes, states and tribes have considerable flexibility in setting TANF eligibility criteria and may choose to disregard income from temporary census employment in calculating the amount of a family’s TANF benefit. A state or tribe will need to amend its plan if the current plan does not cover the disregard the state or tribe wishes to use.  (Posted: 5/02/2019)