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Title 8: Medicaid Table of Contents Chapter E: Income Revised May 22, 2026 Page 3 Page Iowa Department of Health and Human Services Employees’ Manual In-Kind Support and Maintenance (ISM) .......................................................................... 48 Determining the Client’s Living Arrangement ........................................................... 48 When to Apply the Value of One-Third Reduction (VTR) Rule ................................. 50 When to Apply the Presumed Maximum Value Rule (PMV) ..................................... 51 Non-MAGI-Related Self-Employment Income ...................................................................... 53 Determining if a Client is Self-Employed .......................................................................... 53 Determining Income from Self-Employment ..................................................................... 54 Non-MAGI-Related Veterans Affairs Payments .................................................................... 57 Compensation Payment ................................................................................................... 58 Pension Payments............................................................................................................ 58 Aid and Attendance and Housebound Allowance ............................................................. 59 Clothing Allowance ........................................................................................................... 60 Payments for Dependents ................................................................................................ 60 Educational Benefits ......................................................................................................... 62 Payment Adjustment for Unusual Medical Expenses ....................................................... 62 Non-MAGI-Related Deductions ............................................................................................. 64 $20 General Income Deduction ........................................................................................ 64 $65 Plus One-Half Deduction ........................................................................................... 65 Deduction for Impairment-Related Work Expenses .......................................................... 65 Attendant Care Services ........................................................................................... 68 Routine Drugs and Medical Supplies and Services .................................................. 69 Durable Medical Equipment and Prostheses ............................................................ 69 Modified Vehicles ..................................................................................................... 70 Driver Assistance, Taxicab or Other Hired Vehicles ................................................. 71 Own Unmodified Vehicles ........................................................................................ 71 Deduction for Work Expenses for the Blind ...................................................................... 72 Deduction for Plan for Achieving Self-Support ................................................................. 73 Income Policies for MAGI-Related Coverage Groups ......................................................... 73 Definitions ......................................................................................................................... 73 MAGI-Related Income Limits ............................................................................................ 75 Self-Attested Income ........................................................................................................ 76 Income Considered .......................................................................................................... 78 MAGI-Related Household Member Income Exclusions .................................................... 79 Countable Income Under MAGI ....................................................................................... 79 Gross Countable Income .......................................................................................... 80 Income Types Excluded from Gross Income ............................................................ 81 Allowable Expenses ................................................................................................. 82 MAGI Income Deduction .......................................................................................... 83 MAGI-Related Self-Employment ............................................................................... 83 Income Verification ........................................................................................................... 84