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• To determine entitlement for medical assistance first determine the income standard for the AG size and then the amount of countable income. • To calculate the amount of countable income the following rules apply: a parent's income can be used to determine his spouse's, and his child's eligibility; a child's income can be used to determine his own eligibility but not a sibling's or parent's eligibility. • To calculate a parent's countable income: Determine the amount of the parent's gross income; or if self-employed, deduct actual business expenses or 40% of the gross income as applicable. • Subtract applicable earned income deductions including: • $90 Work expense disregard; and • Out of pocket dependent care expense in the following manner: The maximum childcare or incapacitated adult care deduction that may be allowed for each dependent participating AG member is based on the age of the dependent and the number of hours of employment per month. The actual cost of care up to the monthly amounts listed below is allowed.19

Monthly Employed Hours Dependent Under 2 Years of Age Dependent 2 Years of Age or Older Over 129 Hours $200.00 per member $175.00 per member 129 Hours or Less $199.00 per member $174.00 per member

Allocation to a spouse who is not a member of the AG occurs only when the spouse does not have sufficient income to meet his needs. Allocation up to the full standard to a child under age 18 who is not a member of the AG always occurs regardless of the child's income. If necessary, allocate to the parent's spouse or child by: • Determining the nonparticipating spouse's gross income • subtracting the work expense disregard from earned income • subtracting the total need standard of nonparticipating children in the home under age 18 who are solely the spouse's responsibility • subtracting the total need standard of the nonparticipating spouse • subtract the total need standard of the non-AG child. (A parent allocates to his child regardless of the child's income.) If the spouse has insufficient income to meet the needs of children who are solely his responsibility, the allocation equals the need standard of the nonparticipating spouse and common children. The remainder of the parent's income, if any, is counted in the benefit calculation. The parent's countable income is added to the participating child(ren)'s income. If the combined income exceeds the income standard, eligibility is determined by prorating the need standard among all