Page 58

Chapter: 2400 Budgeting Income Program: RAP 53 2460.0363 Student Earned Income Disregard (RAP) The earned income of an eligible child who is a full-time student or a part-time student who is not a full-time employee is not subject to the eligibility standard test for six months in a calendar year. The gross earned income of the child who is a full-time student, or a part-time student and who is not a full-time employee is disregarded in the budget computation for the entire calendar year.

A student, for purposes of the student earned income disregard, refers to an individual under age 19, or under age 21 whose needs are included in a coverage group that provides Medicaid coverage to children under age 21 (ex. MO Y, MP C). A part-time student who is not a full-time employee is defined as one whose school or training schedule is at least one-half of a full-time curriculum and who is regularly employed less than 30 hours per week. 2460.0500 INCOME AVERAGING (RAP) Income averaging is a method used to adjust for fluctuations in income, as described in passages 2460.0501 through 2460.0509. 2460.0501 Averaging Fluctuating Income (RAP) To average income, the eligibility specialist must consider the assistance group's anticipation of monthly income fluctuations over the eligibility review period. When averaging income, use the most recent consecutive four weeks or the best available information when it is representative of the individual's future earnings.

Example 1: At application, Mr. Smith provides the most recent consecutive four pay stubs from his job. He states he has not received any pay raises or significant changes in the number of hours he is working. As such, the eligibility specialist projects his future monthly earnings on an average of the four pay stubs he presented.

Example 2: At eligibility review, Mr. Smith provides the most recent consecutive four pay stubs from his job. The two more recent stubs indicate a $1.00 increase in his hourly rate. Since he has had a change in his hourly rate, the eligibility specialist does not use all four pay stubs to project his future earning potential. Instead, the eligibility specialist uses the two pay stubs which are representative of his future earnings and averages these to project his monthly earnings. 2460.0502 When Income should be Averaged (RAP) When computing a budget, income should be averaged whenever it is received:

1. in differing amounts; 2. at varying periods; 3. from sources such as tips, commissions, and overtime; 4. at a regular rate and schedule of pay, but to cover time periods which vary; or 5. in any combination of the above, or any time the same amount is not received at the same time each month, resulting in the amounts to be budgeted varying from month to month. 2460.0503 Unearned Income (RAP) Unearned income such as contributions or child support payments may be averaged using the same procedures as for earned income. 2460.0504 Earned Income (RAP) A four week average is used when earned income is received more frequently than monthly; for example, weekly or biweekly. When income is received semimonthly, the computation is averaged based on the most recent available one month of pay (two semimonthly payments). When the income is received monthly, use the most recent one month pay if representative.