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Title 8: Medicaid Page 67 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Non-MAGI-Related Deductions Revised April 11, 2025 Deduction for Impairment-Related Work…  Annualized payment. The down payment and the monthly payment must be divided into uniform monthly payments if: • The monthly payments do not begin immediately after the month in which the down payment is made, or • The regular monthly payments extend for less than 12 months. To calculate uniform monthly payments: • Establish the 12-month proration period beginning with the month of purchase. • Add together the down payment and all the monthly payments that will be paid in the 12-month proration period. • Divide the sum by 12.

Mr. G purchases a deductible item in July 1994, paying $1,450 down. However, the first monthly payment of $125 is not due until September. The worker calculates a uniform monthly deduction as follows: Step 1. Establish the 12-month proration period as July 1994 through June 1995 (12-months beginning with month of purchase) Step 2. Add the down payment and monthly payments $ 1,450 + 1,250 $ 2,700 Down payment in 7/94 ($125 x 10) Sum of monthly payments during proration period (July 1994 - July 1995) Step 3. Divides $2,700 by 12 = $225 In this situation, a $225 monthly deduction, the down payment prorated amount plus the regular monthly payment, is allowed beginning in July 1994, and ending in June 1995. After June 1995, the deduction amount would be the regular monthly payment of $125.  Nonrecurring payment. If the impaired person pays the full amount all at once, either deduct it entirely in one month, or prorate it over a 12-consecutive- month period, beginning with the month of purchase. The client chooses the method.  Recurring payments. Some impairment-related work expenses are paid on a recurring basis. When durable equipment is purchased by installment over a period of time, the cost of the item, interest, and sales tax are deductible. Prorate the payments over the time period between payments.