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305.4 TANF MANUAL 11/10 Page 26

A lump sum received in the month of application is treated as income for that month. A case which is denied due to excess income based on the lump sum payment may be eligible in the second month.

Calculating a lump sum payment:

1. Determine that the non-recurring payment meets the definition of lump sum above and that the payment is not for a casualty property loss. Then, determine the amount of the lump sum to be considered as income. Only the amount that is actually received by the individual (lump sum less any directly related expenses which were deducted prior to the individual receiving the payment) shall be considered as income.

Example: Ms. S. notifies the local agency that her claim from an automobile accident has been settled. The settlement, which was separate from a casualty claim for the loss of her vehicle also made by Ms. S., was for $5,000. Ms. S. received a check in the amount of $1,000 from her attorney. The check stub showed that $2,000 was deducted to cover legal expenses and $2,000 was deducted for medical expenses. The $1,000 that the client actually received is considered the lump sum amount.

Note: Lump sum payments received as a result of an accumulation of benefits for a prior period, such as Social Security benefits, may not have any directly related expense deductions.

2. Count the lump sum as income. Add the lump sum received by the individual to other net countable income received in the same month. If the total income exceeds 130% of the federal poverty level for the household, count income for the month following receipt of the lump sum. a. If the applicant/recipient has knowledge of the date and amount of the lump sum before receiving it and reports it, the lump sum will be counted in the month that it is expected to be received. The lump sum is counted for one month only. It will not impact future months.

b. If the recipient reports receipt of a lump sum on the

day that it is received or any day thereafter, the lump sum is counted for the month following receipt or for the first month that the action is administratively possible. The lump sum income is counted for one month only. It will not impact future months.

Example 1: Applicant applied for TANF on April 15th. She received $10,000 in January when her uncle’s estate was settled. The application must be processed without counting the lump sum as income because it was received prior to the month of application for TANF.

*22 VAC 40-295

TANF Transmittal 45