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How wage payments are treated depends on the following:
If the payment is... |
Then the treatment is... |
| Wages | Counted as earned income |
| Difficulty of Care Payments | · Excluded from income for MAGI programs. · Counted as earned income for non-MAGI programs. |
| Tips | Under $20 per month are counted as unearned income for the non-MAGI programs. |
| U.S. Census Wages | For wages from temporary work for the U.S. Census, see MA606N. |
| Flex Income Credits | Any part of the credits paid to the person in their wages instead being used to purchase benefits is counted as earned income. |
| On call, standby or non-work pay | On call, standby or non-work pay Counted for all Medical Assistance programs as earned income. |
Term |
Definition |
Wages |
The amount paid to a person for services provided as an employee. Wages include: · Advances · Back pay · Bonuses · Commissions · Paid time off, including sick pay · Military basic pay · Overtime pay · Severance pay · Sheltered Workshop or Work Activities Center payments NOTE An employer’s contributions toward an employee’s insurance, retirement or Unemployment Insurance are not counted as income for the employee. |
Advances |
Amounts paid to the employee as an advance before the scheduled pay date. |
Back Pay |
Amounts to make up the difference between what the employee was paid and what he or she should have been paid. |
Difficulty of Care Payments |
Wages received by providing Personal Care or attendant services to an ALTCS customer. Difficulty of Care payments must meet the following conditions: · The earnings are for Personal Care or Attendant Care services; · The services are being paid for through the ALTCS program; · The caregiver is providing the services to an ALTCS customer living at home with them. See Difficulty of Care payments examples |
Flex Income Credit |
An amount of money provided by the employer to purchase benefits like life, health, and disability insurance through the employer’s offered plans. |
On Call, Standby or Non-work Pay |
Payment for duty that requires the employee to be available and able to report to duty if called. |
Severance Pay |
Payment made by an employer to an employee after employment has ended.. |
Sheltered Workshop or Work Activity Center Payment |
Payments for services performed in a sheltered workshop or a work activity center under a program designed to help the person become self-sufficient. |
Tips |
Gifts from customers for the employee’s service. The employer is required to keep a record of the amount reported for IRS purposes. Types of jobs that may earn tips are: · Restaurant wait staff; · Pizza delivery; · Dancer; and · Barber and salon staff. |
Work Activity Center |
Work activity centers provide therapeutic activities that teach basic living skills to those whose handicap is so severe that it precludes productive employment. |
Proof of income is first obtained through the Federal and State Data Services Hubs. If needed, other proof includes:
· Copy of pay stubs;
· Letter from employer;
· Request for Verification of Employment form completed by the employer;
· Collateral contact with employer; or
NOTE Tips may be difficult to verify and is usually dependent on accurate reporting by the employee.
For Difficulty of Care Payments
Proof of wages being paid by a healthcare agency includes:
· Information from the employer’s website or other reliable internet sites;,
· Collateral contact with the employer; or
· Written statement from the employer.
Proof that the person being cared for is on ALTCS and living with the customer includes AHCCCS eligibility and enrollment records.
When the customer is a paid caregiver for someone who lives with them AND someone who does not, proof of the counted amount of wages includes:
· Pay stubs if itemized for each person receiving care;
· Written statement from the employer, or
· Collateral contact with the employer
This requirement applies to the following programs:
Program |
Legal Authorities |
ALTCS SSI-MAO Medicare Savings Program Freedom to Work |
42 USC 1382a(a)(1)(A) 20 CFR 416.1111(a) AAC R9-22-1909 |
Adult Caretaker Relative Pregnant Woman Child KidsCare |
42 CFR 435.603 42 CFR 457.10, 300, 301 and 315 |