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Title 8: Medicaid Page 7 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Income Policies for Non-MAGI-Related Coverage… Revised May 22, 2026 Deeming Non-MAGI-Related Income  Court-ordered support or alimony payments. Deduct support payments from the income of the ineligible spouse or parent before determining the amount of income deemed. Deduct support payments first from unearned income. Any balance remaining then reduces gross earned income. For income not based on need, allow the $20 general income deduction and the $65 plus one-half deduction per household. For example, apply the $20 general income deduction to veteran’s compensation income, but not to a veteran’s pension that is based on need. The following sections explain:  Deeming from an ineligible spouse.  Deeming from an ineligible parent to an eligible child. Deeming from an Ineligible Spouse Legal reference: 20 CFR 416.1160, 20 CFR 416.1163 If the applicant’s income is within program guidelines and an ineligible spouse lives in the same household, also consider the ineligible spouse’s income to determine eligibility through the deeming process. An ineligible spouse is a spouse who is not eligible for SSI or non-MAGI-related Medicaid, or State Supplementary Assistance. When deeming income from an ineligible spouse: 1. Verify the ineligible spouse’s unearned income. Subtract from the ineligible spouse’s unearned income an allocation for each ineligible child. The allocation is $497 (the difference between the payment standard for a couple and the payment standard for one person), minus the child’s income. 2. Verify the ineligible spouse’s earned income. Subtract from the ineligible spouse’s earned income any remaining balance of the ineligible child’s allocation not subtracted from the ineligible spouse’s unearned income. 3. Add the remaining unearned income and the remaining earned income of the ineligible spouse. If the total of the ineligible spouse’s income is equal to or less than $497, there is no income available to be deemed to the applicant. Process as a one-person household. If the ineligible spouse’s total remaining income is over $497, continue as follows.