Page 165

Child Care Assistance Program Policy Manual Issued 07/2023 Annualizing lump sum income 6.15.15 A lump sum is cash received on a non-recurring or irregular basis that cannot be reasonably anticipated. See Chapter 6.6 (Earned/Unearned Income) for information on counted lump sum income. Lump sum income can be earned or unearned. Examples of lump sums include non-recurring child support arrears; an inheritance; an insurance settlement, depending on the circumstances; and gambling winnings. Lump sums received by CCAP recipients Lump sums must be annualized effective the date of receipt and continue to count for 12 months or 26 two- week periods from the date of receipt. The period between the date the lump sum is received and 12 months or 26 two-week periods after receipt is the “annualization period”. See the MEC² User Manual for information about entering the lump sum in MEC2. The first $60 of unearned non-recurring income received in the calendar quarter is not counted. This $60 amount is a cumulative total for each calendar quarter. MEC² is not programmed to annualize lump sum income with the $60 quarterly exemption. See the MEC² User Manual for information about entering the lump sum exemption in MEC2. Reported during the 12 month eligibility period Families are required to report receipt of counted lump sum income during the 12-month eligibility period if the income puts the family over the maximum allowed for their family size (85% of SMI). If a lump sum is reported during the 12-month eligibility period, follow guidance in Chapter 8.1.12 (Changes in Income or Expenses). Reported at redetermination At redetermination, families must report and verify any counted lump sum payments received during the previous 12-month eligibility period. See Chapter 8.3 (Reporting Requirements). At redetermination, when a lump sum is verified: • Enter the lump sum in the biweekly period the lump sum was received. • For unearned income, enter the lump sum exemption amount of up to $60, if not already used for the calendar quarter, in the biweekly period the lump sum was received. • Do not approve eligibility results in the biweekly period where the lump sum was received. • Approve eligibility results in the redetermination biweekly period. The lump sum amount and lump sum exemption amount, if applicable, included at redetermination is the amount remaining from the redetermination biweekly period to one year after the lump sum is received. During the 12-month eligibility period, if there is another change in the family’s income, the lump sum amount is adjusted to include the remaining months/weeks. The remaining amount of the lump sum is counted in the new annualization.