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508 (07/2026) Chapter 2:Eligibility • Section 9: Employed Persons with Disabilities (EPD) 4. Deduct one standard earned income deduction of $65. 5. Divide the remainder by two. 6. Deduct any costs allowed as EIEs, IRWEs, or BWEs. 7. The remainder is adjusted income. Note: In the regular OSIPM program, steps 5 and 6 are reversed. By using the EIEs, IRWEs and BWEs after the 50% earned income deduction, the EPD program effectively doubles the usefulness of the deductions. Deductions EPD offers three income deductions that allow individuals to retain eligibility for Medicaid when they are employed. IRWEs, EIEs, and BWEs allow participants’ costs to be taken into account for Medicaid eligibility. IRWEs, EIEs, and BWEs do not offer the individual more benefits; they merely allow the individual to have their eligibility for Medicaid judged on realistic values. Money that the individual uses, or plans to use, on independence and employment expenses will not be counted when eligibility is determined. Impairment-Related Work Expenses (IRWEs) Under the SSA definition, an IRWE is a payment for a service or an item that is excluded for SSI eligibility/payment purposes when the severity of the impairment is such that the individual must purchase or rent items and services in order to work. To be allowed as an IRWE, the expense must be directly related to work and it must be necessary, due to the individual’s disability. However, it can meet the criteria for an IRWE even if the item is used for daily activities other than work. Employment and Independence Expenses (EIEs) EIEs are very similar to IRWEs. They are expenses that contribute to the person’s ability to work and enhance independence. Any expense that can reasonably be expected to enhance the individual’s independence and facilitate employment will be allowed as an EIE deduction. Examples can include, but are not limited to, any of the following: • Vehicle modifications; • Vehicle equipment; • Maintenance on modified vehicles (contact policy for current mileage rates); • Interpreter and Reader services; • Assistive technologies; • Non-covered medical expenses; • Non-covered medical supplies; and • Payments made to approved accounts. To be counted as an IRWE or an EIE, the cost must be incurred and paid for by the individual. It cannot be a cost or item that is paid for by a third party, such as an employer under the Americans with Disabilities Act (ADA) or Vocational Rehabilitation. Expenses that a person without a disability would also incur and pay as a result of being