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LUMP SUM PAYMENTS Income Versus Resources Income must be distinguished from resources as both may be received in lump sum payments. The sale of an asset, income tax refunds, retroactive TANF, and accumulated retirement funds which are available for withdrawal and required by policy to be withdrawn are considered resources. Regular Monthly Income Income received annually or periodically (less often than monthly) from the same source must be considered as income and is averaged over the period it is intended to cover, unless specifically addressed or excluded in this chapter. The yearly payments on a property sale and the yearly rental on an oil lease are averaged over a twelve month period and used as regular monthly income. Lump Sum Income The majority of lump sum payments that a client may receive, unless otherwise disregarded, are considered as resources in the month received. Some of these payments may be classified as windfalls. A windfall is defined as a sum that is not earned, does not occur on a regular basis, but does not represent an accumulated monthly income received in a single sum. A windfall may be an inheritance, benefits from a life insurance policy, lottery winnings, personal liability accident settlements, and Job Corps readjustment payments. The most common lump sum payments received by individuals are nonrecurring payments, such as retroactive RSDI benefits. Any portion of this lump sum payment identified as a payment for the current month must be counted as income. Lump sum child support arrearage payments received directly and retained by the recipient, and excess arrearage payments collected by IV-D and returned to the family, are treated as resources in the month received. (Lump sum payments from SSI should be totally disregarded). Other types of non-recurring lump sum payments include income tax refunds, rebates, or credits, retroactive TANF or other payments, lump sum insurance settlements, vacation pay received in one payment, lottery winnings, refunds, etc. Lump sum death benefits from RSDI should be disregarded when it is verified that the benefit

4011 Volume III | Chapter 4

MISSISSIPPI BASIC PRINCIPLES: DEFINITION OF EARNED AND UNEARNED INCOME

Revised 05 - 01 - 06