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15.4 Unearned Income Unearned income is income that a member receives from sources other than employment. Unless it is disregarded income (see SECTION 15.3 EXEMPT AND DISREGARDED INCOME) or an income deduction (see SECTION 15.7 INCOME DEDUCTIONS), count gross unearned income in a person’s income total. When two payments from the same income source are received the same month due to mailing cycle adjustments, count each payment only for the month it is intended. Income sources commonly affected by such mailing cycle fluctuations include general assistance, other public assistance programs, SSI, and SSA benefits. Note Occasionally, a regular periodic payment (e.g., Title II or VA benefits) is received in a month other than the month of normal receipt. As long as there is no intent to interrupt the regular payment schedule, consider the funds to be income in the normal month of receipt. 15.4.1 Income From Trusts A trust is any arrangement in which a person (the "grantor") transfers property to another person with the intention that the person (the "trustee") hold, manage, or administer the property for the benefit of the grantor or of someone designated by the grantor (the "beneficiary"). The term "trust” includes any legal instrument or device or arrangement which, even though not called a trust under state law, has the same attributes as a trust. That is, the grantor transfers property to the trustee, and the grantor's intention is that the trustee hold, manage, or administer the property for the benefit of the grantor or of the beneficiary. The grantor can be: • A Medicaid member. • The spouse of a Medicaid member. • A person, including a court or administrative body, with legal authority to act in place of or on behalf of the member or the member’s spouse. This includes a power of attorney or guardian. • A person, including a court or an administrative body, acting at the direction or upon the request of the member or the member’s spouse. This includes relatives, friends, volunteers, or authorized representatives. All payments (including interest and dividends) from a trust to the beneficiary are unearned income to the beneficiary. See SECTION 15.4.9 INTEREST AND DIVIDEND INCOME for instructions on counting interest. If the beneficiary does not receive payments (including interest and dividends) from the trust, but they are added back to the trust principal, do not count them as income to the beneficiary if the beneficiary is elderly, blind, or disabled. Note If the grantor is an institutionalized person or acting on behalf of an institutionalized person, payments from any trust, both revocable and irrevocable, that are not to or for the benefit of the institutionalized person are divestment (see SECTION 17.2 EVALUATION OF TRANSFERS FOR DIVESTMENT). 15.4.2 Sick Benefits Sick benefits are payments, such as income continuation, received from insurance. Cash from any insurance policy that pays a flat rate benefit to the recipient without regard to the actual charges or expenses incurred is unearned income. Examples of these types of insurance policies are per diem hospitalization or disability insurance, or cancer or dismemberment policies.