10:71-5.4 Includable income
(a) Any income which is not specifically excluded under the provisions of N.J.A.C. 10:71-5.3
shall be includable in the determination of countable income. Such income shall include, but
is not limited to, the following:
1. Wages, salaries, tips, and commissions: Any and all compensation for services
performed as an employee shall be included as earned income.
2. Income from self-employment: Net adjusted income from self-employment shall be
included as earned income.
i. Determination of net adjusted income from self-employment: In the determination of net
adjusted income, IRS rules shall apply.
(1) Individual business: Net adjusted income shall be the amount of gross income, less
all allowable deductions attributable to the trade or business.
(2) Partnership: Net adjusted income shall be the individual's distributive share of the
trade or business in which he/she is a partner.
ii. Annualization of income: If income from self-employment is received on other than a
monthly basis, such income shall be averaged over the most recently ended taxable year in
order to determine the average monthly or quarterly income to the individual, with the
following exceptions:
(1) Seasonal self-employment: An individual whose income from seasonal selfemployment
is supplemented by income from employment and/or other sources during the
balance of the year shall not have his/her self-employment income annualized. Income
from self-employment shall be averaged only over the period in which it is intended to cover.
3. Annuities, pensions, and other benefits: Payments received in an annuity, pension,
retirement or disability benefits, workers or unemployment compensation, veteran's Social
Security (gross income), or strike benefits shall be included as unearned income.
i. Social security income: SSA gross income shall be defined as the actual amount of the
check, plus any premium deduction made under the Supplemental Medical Insurance
Program (SMI on Part B Medicare).
4. Educational grants and loans: Scholarships, educational grants, fellowships, and
veteran's educational benefits shall be included as unearned income, except as provided in
N.J.A.C. 10:71-5.3(a)10.
5. Support, alimony, and inheritances: Support, alimony, and inheritances, in the amounts
actually received, shall be included as unearned income except as provided in N.J.A.C.
10:71-5.3(a)14.
6. Vendor payments: Cash payments, except those for medical costs, which are made on
behalf of the individual by an organization or other third party shall be included as unearned
income.
7. Proceeds of life insurance policies: Payments made as the result of the settlement of a
life insurance policy claim shall be included as unearned income except as provided in
N.J.A.C. 10:71-5.3(a)8.
8. Prizes, gifts, and awards: Cash or in-kind payments which are received as prizes, gifts,
or awards shall be included as unearned income. (Occasional gifts, such as Christmas
presents, with a value of $20.00 or less, are excluded.)
i. Gift defined: A gift shall be defined as any payment which is neither given as
compensation for services or other consideration, nor as satisfaction of any legal obligation
to the beneficiary of the gift.
ii. Value of in-kind prizes, gifts, or awards: The value of an in-kind prize, gift, or award
shall be its cash value.
9. Dividends, interest royalties: Dividends, interest, and royalties shall be included as
unearned income.
10. Rental income and income from roomer-boarder: The amount remaining, after all the
costs (except depreciation costs) of producing the income have been deducted, shall be
included as unearned income.
11. Lump-sum payments: A lump-sum payment shall be included as income (either earned
or unearned, as appropriate) either in the month in which it is received or prorated over
three months when the payment exceeds the individual's monthly deficit, except as follows:
i. No portion of a cash reward provided to any individual by the Division for providing
information about fraud and/or abuse in any program administered in whole or in part by the
Division shall be included in the computation of income for financial eligibility purposes.
12. Support and maintenance furnished in-kind (community cases): Support and
maintenance encompasses the provision to an individual of his or her needs for food,
clothing, and shelter at no cost or reduced value. Persons determined to be "living in the
household of another" in accordance with N.J.A.C. 10:71-5.6 shall not be considered to be
receiving in-kind support and maintenance as the income eligibility levels have been
reduced in recognition of such receipt. Persons not determined to be "living in the
household of another" who receive in-kind support and maintenance shall be considered to
have income in the amount of:
$208.00 for an individual
$302.00 for a couple
i. In the event the individual/couple can demonstrate that the actual value of in-kind
support and maintenance is less than the assigned value, the lesser value shall be
counted as unearned income.
ii. The income levels in (a)12 above shall be revised annually to reflect the annual cost-ofliving
adjustment to the SSI payment standard made by the Social Security Administration in
accordance with 42 U.S.C. § 1382f. The income level revisions to (a)12 above will be
published annually as a notice of administrative change in the New Jersey Register.
13. Support and maintenance furnished in-kind (other living situations):
i. Title XIX facilities: In-kind support and maintenance is not counted in cases in which the
individual is considered institutionalized for program purposes (i.e., the individual's eligibility
is determined under the Medicaid "Cap").
ii. Private nonprofit domiciliary care facility: The value of in-kind support and maintenance
provided an individual in a nonprofit residential care facility is excluded when all the
following conditions are met:
(1) The facility is not a public facility. A public facility is one which is the responsibility of a
governmental unit or over which a governmental unit exercises administrative control.
(2) The facility, or the distinct portion in which the individual resides, is neither a Title XIX
in-kind nor an institution for educational or vocational training.
(3) The facility is tax-exempt under Section 501(c) or (d) of the Internal Revenue Code.
(4) The facility (or organization controlling it) provides support and maintenance to the
individual but does not receive payment for that part to be excluded or receives such
payment from a private nonprofit organization which is also tax exempt under Section 501(c)
or (d) of the Internal Revenue Code.
(5) The nonprofit facility or nonprofit organization has not undertaken an express
obligation to furnish full support and maintenance to the individual. An express obligation to
provide full support and maintenance exists when an institution agrees to provide lifetime
care in return for a specified lump sum payment and there is no requirement for any current
or future payment. An express obligation also exists if, as a result of the membership of the
individual or of a relative, in an organization (fraternal or religious order, union, etc.) there
exists a written document requiring the facility to provide lifetime care regardless of payment
provided.
(6) If the criteria in (a)13ii(1)-(5) above are not met, the value of support and maintenance
is determined in accordance with (a)13iii below.
iii. Other nonmedical facilities:
(1) Facility is proprietary (private for-profit) or private non-profit and no third party pays:
The value of in-kind support and maintenance is excluded from income if it is provided by
such a facility, no third party payment is made for it, and:
(A) The individual makes some payment which the facility accepts as payment in full
(even though its usual charge may be higher); or
(B) The individual contracts a written indebtedness to the facility for his/her support
and maintenance and the facility accepts the amount of the debt plus the individual's
payment, if any, as payment in full.
(2) Facility if proprietary or private nonprofit and third party pays: When a proprietary
(private for-profit) or private nonprofit facility provides support and maintenance to an
individual because a third party pays the facility on that individual's behalf, that individual is
receiving in-kind support and maintenance. The value of the in-kind support and
maintenance is determined in accordance with (a)12 above.
(3) Other situations regardless of third-party payment: In other types of facilities, support
and maintenance provided by that facility is unearned income to the individual in
accordance with (a)12 above.
(b) Countable income: Income remaining after appropriate income exclusions shall be
applied toward the applicable income eligibility standard. The applicant's living arrangement affects the method of treatment of income and its relationship to the standards as stated in
the variations appearing below.
1. Applicant/beneficiary living alone: If the applicant/beneficiary lives alone, only his or her
countable income shall be applied to the appropriate income standard.
2. Applicant/beneficiary couple: In the case of an applicant/beneficiary couple, living
together, the total amount of husband's and wife's countable income shall be combined and
applied to the appropriate income eligibility standard for a couple. Such individuals will
continue to have their countable income combined until they have been separated for a
period of six months.
i. One member of couple institutionalized: When one member of an applicant/beneficiary
couple is institutionalized and the other remains in the community, no income of the
community spouse will be used in the determination of income eligibility beginning in the
month of admission into a Title XIX facility.
ii. Institutionalized couple: When an applicant/recipient couple is institutionalized in the
same facility, the gross income of each individual is combined and applied to an amount
equal to two times the Medicaid "Cap." If, however, the applicant/recipient couple is
institutionalized in separate facilities, the income of each is applied individually to the
Medicaid "Cap."
3. Applicant/beneficiary living with ineligible spouse: if the applicant/beneficiary lives with
an ineligible spouse, the income of the ineligible spouse is deemed to the
applicant/beneficiary (see N.J.A.C. 10:71-5.5). Such individual's income shall continue to be
deemed until the husband and wife have been separated for one month. At such time the
individuals will be considered to be living alone and deeming shall cease.
i. Effect of institutionalization: Income of the community spouse shall not be considered in
the determination of income eligibility of the institutionalized individual beginning with the
month of admission into a Title XIX facility.
4. Applicant/beneficiary unmarried and under 18 years of age, living with parents: If the
applicant/recipient is an unmarried child under 18 years of age who lives with his or her
parents (including stepparents), the income of the parents is deemed to the child (see
N.J.A.C. 10:71-5.5(c)3). Such deeming will cease when a child has ceased living with
his/her parents for a period of one calendar month.
i. Child not living with parents due to institutionalization: If a physician has certified that
the child's duration of stay in a Title XIX facility (or a combination of such facilities) is
expected to be a full calendar month or more, such child shall be considered to be not living
with his/her parents and deeming shall cease at the time of such certification.