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1. From a payment received for damages in connection with an accident, subtract legal, medical and other expenses connected with the accident; or

2. From a retroactive check from a benefit program other than SSI, subtract legal fees connected with that claim.

C. The following fees are considered essential to obtaining income and are allowed as deductions:

1. Document fees to acquire documentation to establish that an individual has a right to certain income are an essential expense and reduce the amount of unearned income which is countable.

a) Examples include fees for obtaining birth or death certificates, legal papers, medical examinations, filing fees, etc.

2. Guardianship fees are essential expense only if the presence of a guardian is a requirement for receiving the income.

D. The following criteria must be used when deducting expenses essential to obtaining the unearned income:

1. Expenses are deducted from the first and any subsequent amount(s) of related income until the expense is completely offset.

2. Excludable expenses can be offset against the income when it is actually or constructively received.

3. Allow any verified expenses which were paid by the recipient prior to the receipt of the income (e.g., a partial payment to an attorney made from an individual’s savings account) as long as they are essential to obtaining the income.

4. Proof of having incurred the expense (bills, canceled checks, money orders, etc.) is required. If an expense has been incurred, but not paid, assume the individual will pay the expense.

5. The remainder is unearned income subject to the general rules pertaining to income and income exclusions.

Source: Social Security Act §1902 (r)(2); 42 CFR § 435.601(b) (Rev 1994).

Rule 6.5: Overpayment Recovery from Unearned Income.

A. Unearned income includes that part of a benefit that has been withheld to recover a previous overpayment.