Effective Date: November 1, 2021

No Previous Policy

Determine if income belongs to a child, a parent, or someone else in the individual's family. Count income as belonging to the person for whom the income is paid. The income of a child’s parents is deemed to the child for eligibility purposes.

A. Income from Trusts

1. Trusts Established Before August 11, 1993

If the trust was set up before August 11, 1993, and has not been amended after that date, do not count the money as both income and an asset in the same month.

a. Medicaid Disqualifying Trusts:

i. If the maximum potential disbursement from the trust is counted as an asset, any payments actually received are NOT countable income.

ii. If the sole beneficiary of the trust is a resident of an institution for the care of the mentally retarded AND the trust was established before April 7, 1986, do not count the trust as an asset. Trust payments received by the individual must be counted as unearned income.

b. Other Trusts:

i. If the trust does not meet the criteria of being a Medicaid Disqualifying Trust, decide if the trust is countable as an asset. If the trust counts as an asset, do not count payments made from the trust as income.

ii. If the trust does not count as an asset, count payments made from the trust to the individual as income. If a child or a parent receives income from a trust, read the trust agreement carefully. If the trust agreement explains who owns the income, accept the terms of the trust agreement.

If the trust agreement does not specify the amount of payments for each person and the payer does not divide the income, then count income as follows:

· If the payment is made in one person's name, count the income as belonging to that person.

· If the payment is made in the names of both a parent and the spouse, count ½ of the payment for each of them.

2. Trusts Established On or After August 11, 1993

a. A trust set up on or after August 11, 1993 can count as an asset and payments made from the trust can count as income in the same month.

b. Count payments made from the trust to, or for the benefit of, the child or a parent, as income in the month the payment is made.

i. If the payment is made in one person's name or for one person's benefit, count the payment as income for that person.

ii. If the payment is made in both names or for the benefit of both, count ½ for each of them, unless the trust has specific provisions to do otherwise.

iii. Payments for the benefit of a child count as income if CHIP policy counts such benefits as income.

e. Count payments made from the trust to a third party, not for the benefit of the child, as a transfer of an asset.

B. Other Income

In most cases, income belongs to the person in whose name it is given. Follow the MAGI Income deeming policies found in 411-1. The following types of income are less common situations for CHIP.

1. Social Security, Railroad Retirement, and Black Lung benefits belong to the person for whom the payment is made even when the payments are sent to a guardian or representative payee.

2. Pensions, or retirement benefits, See section 415-3.

3. Income issued in the name of the child's legal guardian or conservator, or a child's representative payee for the benefit of the child is income for the child. Follow the policy in 411-1 and 440-5 to determine countable income.

4. When income is issued in more than one name, or when the individual states that some of the income is for another family member, find out how much income belongs to the individual and how much belongs to any other persons by contacting the person or agency making the payment. If that person or agency divides the income, accept ownership of the income according to the division made.