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33.6.6 Self-Employment Earnings SeniorCare will budget net self-employment income, which is calculated by deducting allowable business expenses, losses, and depreciation from gross self-employment income (see SECTION 15.6 SELF- EMPLOYMENT INCOME). If the net self-employment earnings are anticipated to be a loss, the amount should be reported as zero. Negative amounts should not be reported. Any reported losses will be budgeted as zero and will not be used to offset other income. 33.6.6.1 Rental Income If rental income is reported to the IRS as self-employment income and is subject to the federal self- employment tax for rental income (usually real estate agents or individuals in a business where extensive services are provided to the renters), depreciation should also be deducted from the gross rental income. Refer to SECTION 15.6.4 SELF-EMPLOYED INCOME SOURCES for more information about rental income for self-employed members. Refer to SECTION 33.6.8.3 RENTAL INCOME if rental income is not reported as self-employment income. 33.6.7 Gross Retirement Income Examples of retirement income that are counted for SeniorCare include: • Veterans retirement benefits • Railroad Retirement Board benefits • The taxable portion of IRAs, annuities, work-related retirement plans, and pensions Retirement benefits include work-related plans for providing income when employment ends (e.g., pension, disability, or retirement plans administered by an employer or union). Other examples are funds held in an IRA and plans for self-employed individuals, sometimes referred to as Keogh plans. The funds in retirement accounts, including IRAs, Keogh plans, etc., are assets and are therefore not counted for SeniorCare. However, periodic payments, withdrawals, and distributions the individual expects to receive from their retirement account or annuity in the next 12 months are counted as income. The only exception is when the individual has never previously made withdrawals from the account and they withdraw the full amount at one time. This is not considered a periodic payment and is not countable income. Note Rolling over an IRA (transferring the funds from one IRA to another) is the conversion of an asset from one form to another. Any potential income from an IRA rollover is countable income for SeniorCare.

Example 2 Mike owns a $2,000 IRA and plans to withdraw all of it this year. Mike has not withdrawn any money from this IRA in the past. If Mike withdraws the full $2,000 at one time, the $2,000 continues to be considered an asset. This is a conversion from one form of an asset to another. If Mike were planning to make a one-time withdrawal of $1,000 from the $2,000 IRA in the next 12 months, the $1,000 would be considered income. He should report this income on his SeniorCare application and it should be budgeted.