Kenneth Vercammen, Esq is Chair of the ABA Elder Law Committee and presents seminars to attorneys and the public on Wills, Probate and other legal topics related to Estate Planning and Elder law. He is author of the ABA's book "Wills and Estate Administration. Kenneth Vercammen & Associates,
2053 Woodbridge Avenue - Edison, NJ 08817
(732) 572-0500 More information at www.njlaws.com/

Wednesday, July 15, 2009

10:71-5.3 Income exclusions
(a) Only the following income shall be excluded in the determination of countable income.
Income exclusions shall be applied to unearned income first, then to earned income as
appropriate. Exclusions shall be applied in the order of their appearance in this section.
1. Monies received as a result of the sale of a resource shall be excluded. These monies
shall be treated as a resource (see N.J.A.C. 10:71-4.2 and N.J.A.C. 10:71-4.4(b)8ii).
2. Monies received as a result of the settlement of a casualty insurance claim, if such
settlement is intended as compensation for the loss or destruction of a previously
excludable resource, shall be excluded (see N.J.A.C. 10:71-4.4(b)8i).
3. Third-party payments for medical care or services, including room and board furnished
during medical confinement, shall be excluded.
4. The value of social services (for example, advice, training, consultation) performed by
any governmental or private agency shall be excluded.
5. The value of food stamps shall be excluded.
6. All loans which are actually repayable shall be excluded.
i. Regular contributions to an individual by his or her family, which are made over an
extended period of time and which would be impossible to repay given the individual's
current and/or future financial status, shall not be considered loans. Contributions of this
nature shall be treated as income in accordance with N.J.A.C. 10:71-5.2.
7. Benefits received under the following Federal programs shall be exempt:
i. The value of benefits received under the Federal WIC program shall be exempt.
ii. The value of meals provided under the National School Lunch Act shall be exempt.
iii. Training incentive payments made under the Comprehensive Employment Training Act
(CETA) of 1973 shall be exempt.
iv. Payments received under Title II of the Uniform Relocation and Real Property
Acquisition Policies Act of 1970 shall be exempt.
v. Payments received for services performed in connection with the Domestic Volunteer
Service Act of 1973 shall be exempt. Such programs include the Foster Grandparents
Program, Older Americans Community Service Program, the Retired Senior Volunteer
Program (RSVP), the Service Corps of Retired Executives (SCORE), Volunteers in Service
to America (VISTA), the Active Cooperative Volunteer Program (AVP), the Active Corps of
Executive (ACE), and other programs which are coordinated by the Federal ACTION
agency.
vi. Payments made by the Disaster Assistance Administration shall be exempt.
vii. The value of assistance to children under the Child Nutrition Act of 1966 shall be
exempt.
viii. Payments from Home Energy Assistance (HEA) and the Crisis Intervention Program
shall be exempt.
ix. Payments received from the Youth Incentive Entitlement Pilot Projects, Youth
Community Conservation and Improvement Projects, and the Youth Employment and
Training Programs under the Youth Employment and Demonstration Projects Act of 1978
shall be exempt. However, payments from the Adults Conservation Corps under that Act or
any other payments under the Comprehensive Employment and Training Act (CETA) of
1973 (with the exception of (a)6iii above) may not be excluded.
x. The amount of the annual cost-of-living increase in Social Security benefits for those
individuals who became ineligible for Supplemental Security Income (SSI) solely as a result
of SSA cost-of-living increases after June 30, 1977 shall be exempt. Individuals eligible for
this exemption are entitled to an additional exemption of the dollar amount of all SSA costof-
living increases subsequent to that increase which created their SSI ineligibility.
xi. For certain individuals, the dollar amount of the October 1972, 20 percent cost-of-living
increase in Social Security benefits shall be exempt. In order to qualify for this exemption,
the individual must have been, for the month of August 1972:
(1) Eligible for or receiving cash assistance under Old Age Assistance, AFDC, Aid to the
Blind, or Disability Assistance (including persons who were eligible for such assistance but
not receiving such assistance because they had not applied for it or because they were
residents in medical or intermediate care facilities); and
(2) Entitled to a monthly insurance benefit under Title II of the Social Security Act (RSDI).
8. That part of the proceeds of a life insurance policy which is used to pay the last illness
and burial expenses of the insured shall be excluded.
i. Last illness and burial expenses shall include related hospital, medical, funeral, burial
plot, interment expenses, and related costs.
9. Refunds on taxes for food, real property, or income shall be exempt.
10. That portion of a grant, scholarship, or fellowship which is to be used to pay tuition and
mandatory fees (as defined by the educational institution) shall be excluded.
11. The value of agricultural produce, if raised for home consumption, shall be excluded.
12. Certain irregular and/or infrequently received income shall be excluded as follows:
i. Unearned income which totals $60.00 or less per quarter (any consecutive three-month period), and which is received less frequently than twice per quarter or cannot be
reasonably anticipated shall be excluded.
ii. Earned income which totals $30.00 or less per quarter (any consecutive three-month
period), and which is received less frequently than twice per quarter or cannot be
reasonably anticipated shall be excluded.
13. Monies paid to an individual as compensation for the care of a legally assigned foster
child shall be excluded. (This income is not excludable if the child is an eligible individual in
his or her own right, or if he or she does not reside in the home of the eligible individual(s).)
14. One-third of the amount received as child support from an absent parent shall be
excluded.
15. Income received as compensation for services performed as an employee, or from
self-employment, by an unmarried student who is under 22 years of age, shall be excluded
to the extent that such income does not exceed $1,200 in a calendar quarter and/or $1,620
per calendar year.
i. A person shall be considered a student if he or she meets the following criteria:
(1) He or she is enrolled in a course or courses of study and attends to the extent
required for continued enrollment. Specifically, a person must attend:
(A) A college or university at least eight semester or quarter hours weekly; or
(B) A secondary school at least 12 clock hours weekly; or
(C) A course of vocational or technical training (other than at a secondary school,
college, or university) designed to prepare the student for gainful employment involving
shop practice, at least 15 clock hours a week; or without shop practice, at least 12 clock
hours per week; or
(D) Less than the appropriate requirements in (a)15i(1)(A), (B), and (C) above, if it is
determined that there are extenuating circumstances beyond the control of the student and
he/she is pursuing a course of study comparable to the requirements of (a)15i(1)(A), (B),
and (C) above.
(2) A student shall be considered in regular attendance if he or she is engaged in home
study provided by a secondary school, college, university, or governmental agency, and a
home visitor or tutor supervises the study or training. For purposes of this section,
government-sponsored courses in the various self-improvement and anti-poverty programs
are considered to be for the purposes of preparing the student for gainful employment.
(3) A student shall be considered in regular attendance during normal vacation periods if
he or she is in regular attendance in the month immediately preceding and immediately
following the vacation period.
(4) A student shall be considered to be in regular attendance for the month in which he or
she completes or discontinues his or her school or training program.
16. Benefits provided under the State's Lifeline Utility Credit Program shall be excluded.
17. Interest on or appreciation in value of burial funds excluded from consideration as
resources at N.J.A.C. 10:71-4.4(b)9 shall be excluded from income.
18. The first $20.00 per month of income, other than income received as a VA pension
based upon need, shall be excluded. This exclusion shall be applied first to unearned
income, and any remaining amount of exclusion then applied to earned income. In the
determination of countable income of a couple, this $20.00 exclusion is applied to the
combined income of both.
19. Earned income, in the amount of $65.00 per month plus one-half of the remaining sum,
shall be excluded. In the determination of countable income of a couple, this exclusion
applies to the combined earned income of both.
20. In the case of blind persons only, all expenses reasonably attributable to the earning of
income shall be excluded.
21. In the case of blind or otherwise disabled persons, the amount of money which is
needed to achieve an approved plan of self-support shall be excluded.
i. In order for this exclusion to apply, the plan of support must have been approved, in
writing, by the Division of Vocational and Rehabilitation Services or the Commission for the
Blind and Visually Impaired. The plan must also be current.