Page 11
Families and Children Manual Policy Manual Number: 010.020 Section: Financial Eligibility Chapter: Countable and Excluded Income
September 1, 2026 Division of Tenncare 11 n. Other Income i. Canceled Debts The amount of a debt that an individual is no longer required to pay, or that is forgiven, is countable as income in the month received. Student loan debt that is canceled or discharged under certain types of forgiveness programs, such as Public Service Loan Forgiveness (PSLF), Teacher Loan Forgiveness, or Perkins Loan Cancellation, is not countable. Student loan debt canceled or discharged due to the death or permanent and total disability of the student, or school fraud, or closure is not countable. Student loan debt canceled or discharged after December 31, 2020, and before January 1, 2026, for loans described in 26 U.S.C. § 108(f)(5)(A)-(D), including but not limited to those discharged under income- based repayment plans, is not countable. ii. Cash Inheritance The value of inherited cash is counted as income in the month of receipt. iii. Cash Support If an individual is claimed as a tax dependent by someone other than a spouse or parent, any cash support provided by the tax filer in excess of $30 a month is countable as income in the month received. iv. Countable Unearned Income 1. Court awards
Settlement amounts that are received, either by compromise or judgment, may be countable income based on the item that the settlement replaces. The following settlements or awards are countable income: a. Interest on any award; b. Compensation for lost wages or lost profits in most cases; c. Punitive damages; d. Amounts received in settlement of pension rights (if the individual did not contribute to the plan); e. Damages for patent or copyright infringement, breach of contract, or interference with business operations; f. Back pay and damages for emotional distress received to satisfy a claim under Title VII of the Civil Rights Act of 1964; and g. Attorney fees and costs where the underlying recovery is included in gross income. Note: Compensatory damages for personal physical injury or sickness are not countable income.