HOUSING VOUCHER PROGRAMS - POLICY AND PROCEDURES
MANUAL
Chapter IV. Income -
Assets, Allowances, Expenses, Verifications & Calculations
Expenses
Medical
Expenses
If the head
of household, spouse, or co-head is elderly or disabled, all household medical
expenses in excess of 3% of the annual household income are deductible. Allow
medical expenses, including Medicare Spend-downs, for all family members,
including non-Elderly/Disabled members. Refer to Chapter
IV., Allowances, Disability and/or Elderly Allowance
for disability verification requirements.
Allowable
medical expenses are anticipated to occur during the 12 months following
re-examination and are not covered or reimbursed by an outside source, such as
insurance. Allowable medical expenses include, but are not limited to:
Services of
doctors, health care professionals (HCP) and facilities
Medicare and
any other medical insurance premiums
Prescriptions
and HCP recommended non-prescription medications
Transportation
to treatments
Dental
visits and procedures
Eyeglasses, hearing aids, batteries, etc.
Payments to live-in or periodic home care and medical
assistance
Monthly payments on accumulated medical expenses
Medical care of a permanently institutionalized family member
if their income is included in annual income
One time only medical costs verified by a HCP (for the
upcoming re-exam period only)
Air conditioning installation and maintenance (utility) costs
if third party medical verification confirms the tenant requires air
conditioning for health reasons (i.e. extreme allergies).
Expenses related to an animal that is specifically trained
and used to assist a person with a disability.
·
Medical expenses do not include wheelchairs or
ramps, which may be eligible disabled/handicap expenses. See Disability
Assistance Expenses.
·
If a family has both medical
and disability expenses, a special calculation is required. See Disability
Assistance Expenses.
·
Medical expenses must project all
increases/decreases for the upcoming 12 months whether using a MSHDA 100 or
actual statements. These projected costs must be verified and notated on the
verification.
Equipment Maintenance
Costs related to ongoing maintenance of special equipment are
eligible medical expenses. Examples include medical alert, hearing aid
batteries, TDD, etc.
A MSHDA 100 or other written HCP documentation verifies the
need. Actual verification of the expense (receipts) is also required, using
three months of receipts to get an average.
Medical Bills/Payment Plans
Previous medical bills for which the applicant/participant is
making regular payments are an eligible expense provided the anticipated
payments will continue during the upcoming period.
Determine when the payment plan will be satisfied (e.g. paid
off). Multiply the monthly payment amount by the number of months remaining on
the payment plan, or by 12 months, whichever is appropriate. Do not exceed the
amount owed or the 12-month period.
Medicare
Premiums/Other Health Insurance
·
If the Medicare or other health insurance
premium is paid by the family and the household qualifies as ED (i.e. eligible
for $400 allowance), the amount must be included as income and subsequently
deducted as a medical expense.
Medicare Premiums
The family does not pay the Medicare premium:
The SSA pays Medicare premiums on behalf of qualified
recipients;
The Medicare premium is identified on printout with a code of
"230”; "yes" under third party payer; or $0.00 listed as
amount paid; and
The gross payment will equal the net payment (unless SSA is
recouping overage previously paid to recipient).
The family does pay the Medicare premium:
If the household is ED (which qualifies it for medical
deductions), include the gross premium as income and deduct the gross premium
as a medical expense.
If the household is not ED (and, therefore, does not qualify
for medical deductions) include the gross payment as income and disregard the
Medicaid expense.
The net payment plus the Medicaid premium should equal the
gross payment received.
Convert the monthly premium to an annual figure; do not round
the monthly Medicare amounts.
Other health insurance premiums must be documented. Third party verification of
the premiums is required.
Non-Prescription
Expenses
·
Non-prescription expenses are over-the-counter
medical expenses (aspirin, arthritis cream, Depends, etc). The expenses are
allowed if the need is documented in writing by a qualified HCP. Compare the
documented need (type, amount and frequency) with the actual verified expense.
Calculate non‑prescription costs by multiplying the amount from actual
receipts/ statements by the verified frequency.
Verification of Non-Prescription costs can be documented via:
·
A MSHDA 100 completed by a HCP; or
·
HCP-issued prescription with corresponding cash
register receipts, or
·
Other written statements/printouts from a HCP that
documents the type, amount, and frequency of the expense.
Example: The tenant has a prescription written by an M.D.
stating she must take one aspirin per day for heart disease. She has a receipt
from the grocery store showing she purchased a bottle of 30 aspirins for $1.50.
She needs approximately 12 bottles to last for the full year. Calculate the
total annual expense ($18) by multiplying the cost ($1.50) by 12.
One-Time
Medical Expenses
·
One‑time medical expenses (i.e.
installation of an air conditioner or purifier) apply for the current year
only. A MSHDA 100 (or other written statement from the HCP) documents the
purpose/medical need for the expense. Use actual receipts, statements, or a
payment plan from the service provider to document cost.
Ongoing
Medical Expenses
Completion of a MSHDA 100 is the preferred method of
verifying medical expenses. The form requests the total expenses for the past
12 months and anticipated increases and decreases of expenses for the following
12 months. Use the information to project expenses for the next 12 months.
Projected expenses (increases or decreases) must also be documented.
If unable to obtain a MSHDA 100, the following documents are
acceptable:
Pharmacy or other HCP printout;
Physician issued prescriptions (copies) if cost is
documented;
Medical statements or receipts from
providers.
·
Expenses for one animal that has been
specifically trained to assist person(s) with their specified disability
(example: guide dog or other animal used by a visually or hearing impaired
person) can be included as a medical expense such as:
·
Cost of the animal;
·
Amounts paid for the care of the specially trained
animal; i.e., training expenses, vet bills. Use IRS Publication 502, Medical
and Dental Expenses, for more information.
·
See Chapter XX.
Miscellaneous, Reasonable Accommodation, Section F, Service Animals
also.
Transportation Expenses
Transportation expenses (mileage) for required out-of-town
treatments (dialysis, chemotherapy, etc.) are allowable medical expenses.
Documentation of the purpose and frequency of out of town
travel for treatment are verified by both the HCP and the appropriate
treatment center to determine mileage. Use a MSHDA 100 or other written
statement for documentation.
Use the State map to determine city‑to‑city
mileage. Use the mileage and frequency noted on the MSHDA 100 (or other written
verification from HCP).
If the family uses their own transportation, use the
appropriate mileage rate listed in the most recent Appendix Section, K.
Travel/Meal Reimbursement Schedule. Calculate average transportation costs by
multiplying map mileage by the State rate by verified frequency.
If the family pays a provider for transportation, use actual
receipts/statement from the transportation provider. Calculate average
transportation costs by multiplying the amount from actual receipts/statements
by verified frequency.
·
NOTE: Vicinity miles are not allowed unless the
family makes a written request and provides an acceptable explanation of the
need.
Disability
Assistance Expenses
·
Care attendants and auxiliary apparatus expense
items (such as wheelchairs, ramps, adaptations to vehicles, special equipment
to enable a blind person to read or type, etc.) are allowed if they:
Directly relate to enabling a family member (including the
disabled family member) over 18 years of age to work;
Are not reimbursed by any other program or agency;
Exceed 3% of annual household income; and
Do not exceed the earned income of the household member(s)
enabled to work.
The head, co-head, or spouse does not need to be E or D for the
household to qualify for this deduction.
Two examples of eligible disability assistance expenses are:
·
1. Monthly payments on a motorized wheelchair
allow the adult son of the head of household to leave the house and go to work
on his own. Prior to this purchase, the son was unable to make the commute to
work.
2. Hourly payments to a care attendant to stay with a
disabled 20-year old adult child allows the child’s mother to go to work
each day.
Example
of calculations to determine allowable disability expenses :
Head of Household Earned Income $12,000
Spouse Earned Income $10,000
Household income $22,000
Expense for care of disabled adult child $ 3,500
Disability Assistance Allowance ($22,000 X 3%) - 660
Allowable
Disability Assistance Expense $ 2,840
Since $2,840 is less than the income earned, the full amount
is deducted.
·
If a family has both medical
and disability assistance expenses, a special calculation is required to insure
that the family’s 3% share of these expenses is applied only once. The allowance
for disability assistance expenses is limited by the amount earned by the
person freed for work; therefore, the disability allowance is calculated first.
Deduct the 3% amount from the disability expense, and the remainder (if any)
from the total medical expenses. If the proper codes are entered in EHS, the
system automatically performs the correct calculation.
·
If the disability assistance expense exceeds the
amount earned by the person who is freed for work, the allowance for disability
assistance is capped at the amount earned by that individual.
·
If the total un-reimbursed disability expense is equal to or greater than the
medical/disability 3% threshold:
3% of the total annual income (medical disability 3%
threshold) is subtracted first from the total disability assistance expense.
Compare this amount to earnings made possible by the
assistance expense; the lower of the two is the allowable disability assistance
expense.
Any remainder is deducted from the total medical expenses.
·
If the total un-reimbursed disability expense is
less
than the medical/disability 3% threshold:
Enter the total disability expense as the maximum disability
3% allowance.
Compare this amount to the earnings made possible by the
assistance expense; the lower of the two is the allowable disability assistance
expense.
The allowable disability assistance expense is added to the
medical expense.
3% of annual income (the medical /disability threshold) is
subtracted from the total disability assistance and medical expenses to
determine the medical/disability assistance allowance.
·
Acceptable verifications of disability expenses:
A MSHDA 100 is the preferred method of verifying the need for
auxiliary apparatus, and disability care expenses; or
A letter or statement from a HCP; or
Receipts, canceled checks, statements, or bills from the
provider verifying the auxiliary apparatus.
Full Time Live-In Aide Expenses
(Formerly referred as Chore Providers) or Part-time Aides
·
Permanent, temporary, full-time live-in aide or
part-time aide expenses are allowable.
·
Document tenant paid live-in aide or part-time aides expenses on the MSHDA 100. Do not include live-in aide
or part-time aide expenses paid directly by DHS or another agency as a medical
expense. Expenses must be verified annually.
·
A full-time live-in aide may reside in the unit to
provide care for an elderly or disabled member if essential to the care and
well being of the person(s). The need for an aide must be documented on the
Verification of Disability and/or Special Medical Needs (MSHDA 16).
Refer to Chapter III, Section B,
Full-Time Live-in Aides.
Child
Care
The cost of child
care for children (including foster children) aged 12 and under to enable a
family member who would otherwise have cared for the child to work, attend
school, or actively seek employment, is an allowable deduction from annual
income if all the following are true:
If working, the cost of child care is not greater than the
amount of income earned;
The care is necessary to enable family member to work,
actively seek employment, or to further their education;
The expense is not reimbursed by another agency or
individual;
Child care costs are ‘reasonable’; and can be
verified through TPV. Determine whether child care costs are
“reasonable” (which means reasonable for the care being provided).
Reasonable costs for in-home care may be very different from reasonable
day-care center costs. Families may choose the type of care to be provided.
MSHDA may not decide that the
family may receive a deduction only for the least expensive type of care
available.
·
NOTE: The child
care expense deduction may not be refused because there is an adult family
member in the household that may be available to provide childcare.
·
When more than one family member works, determine
which family member is being enabled to work because child care is provided.
This is necessary because the child care allowance cannot exceed the income
that family member earns. A general rule is to assume that the child care
expenses enable the lowest paid individual to work unless this is obviously not
the case.
If a portion of child care expenses are reimbursed by another
agency or an individual (indicated on the MSHDA 50), allow only the portion
actually paid by the family.
If child care is required for a member to attend school, use
only the weeks attended per semester/term to calculate childcare expenses. The total number of hours claimed may include reasonable travel
time to and from school. Refer to Chapter IV, Income Verification
Irregular income for a breakdown of calculations for school time.
If a family member works and goes to school, the child care
expense must be prorated so that the portion of the total child care expense
that is specifically related to the hours the family member works can be
compared with the amount earned.
Child Support payments are not child care expenses and are
not an allowable deduction.
Care expenses for disabled family members over the age of 12
cannot be counted as ‘child care,’ but may be allowed as a
disability expense. Refer to b. Disability Assistance Expenses for details.
If child care is provided by someone under age 18 who can not
legally complete the MSHDA 50, a statement signed by the under-age provider and
the provider’s parent is necessary.
Document all expenses and the need for child care.
|
To verify: |
Use Form: |
|
The cost of child care and
person who is responsible for payment of care: |
Verification of Child Care
Expenses (MSHDA 50) |
|
Number of hours worked for
which care is needed: |
Verification of Earnings
(MSHDA 49) |
|
Number of hours actively
seeking employment for which care is needed: |
Family Certification |
|
Number of hours attending
school for which care is needed: |
School Verification (MSHDA
55) |
|
Other types of
verification (i.e. MSHDA 77) may be appropriate. |
|
(February 2007)