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Minnesota Department of Human Services Child Care Assistance Program (CCAP) Policy Manual
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6.15.15 Annualizing Lump Sum Income

ISSUE DATE: 08/2016

See Chapter 6.6 (Earned/Unearned Income) for information on included lump sum income.

Examples of lump sums include child support arrears, an inheritance, an insurance payment, and gambling winnings.

LUMP SUMS RECEIVED BY CCAP RECIPIENTS

Families are required to report receipt of lump sums timely (within 10 days of receipt).

Once you are aware of the lump sum:

· Determine if the income should be included in the household income,

· If included, do not count the first $60 in lump sum income received in the calendar quarter. Track this $60 amount as a cumulative total for each calendar quarter.

· Divide the total remaining amount by 12 months or 26 2-week periods and apply an equal amount throughout the entire year, AND

· Determine if the family remains eligible. If eligibility continues, determine the new copay amount.

If there is another change in the family’s income during the year you count the remaining months/weeks of the lump sum. Include the remaining amount in the new annualization.

Count the annualized lump sum effective the date of receipt. Continue counting it for 12 months or 26 2-week periods from the date of receipt.

MEC² is not yet programmed to annualize lump sum income according to CCAP policy. Follow instructions in the MEC² User Manual to enter lump sum income in the appropriate income type category with an accurate received date.

LUMP SUMS RECEIVED BY CCAP APPLICANTS (PRIOR TO APPLICATION)

If lump sum income is received prior to CCAP participation the lump sum is NOT included in the CCAP household income. However, if a CCAP participant receives a lump sum income, the case closes and the family’s reapplies during the original annualization period, continue to count the lump sum through the end of the original annualization period. Do not start a new annualization period.

LUMP SUM REPORTING AND OVERPAYMENTS

When a lump sum income IS reported timely, resulting in an increased copayment, send an adverse action notice with an effective date beginning the next payment period following the 15-day notice requirement.

When lump sum income is NOT reported timely, cite an overpayment for child care assistance paid in excess of what should have been paid had the payment been reported timely. The overpayment would include the time period between the date of receipt of the lump sum and the end of the 15 day adverse action notice. Consider if all or part of the lump sum would have been disregarded as the first $60 in included lump sum income for the calendar quarter before assessing an overpayment.

If the lump sum calculation results in an adverse action, send an adverse action notice. See Chapter 12.3.9 (Adverse Action Notices – Family).

NOTE: The Child Care Assistance program does NOT have an asset test. The liquidation of an asset does NOT count as lump sum income when determining a household’s income. However, during CCAP participation, any interest/dividend received as a result of investments must be included in the household’s income. See Chapter 6.6 (Earned/Unearned Income).

TRACKING THE LUMP SUM

MEC2 does not remove the lump sum from income in eligibility when the annualization period ends. See the MEC2 User Manual for instructions on how to track the expiration of the lump sum income and steps to follow when it expires.

LEGAL AUTHORITY

Minnesota Statutes 119B.011
Minnesota Statutes 119B.02
Minnesota Rules 3400.0170
Minnesota Rules 3400.0180
Minnesota Rules 3400.0185

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© 2017 Minnesota Department of Human Services Updated: 7/22/16 10:44 AM | Accessibility | Terms/Policy | Contact DHS | Top of Page | Updated: 7/22/16 10:44 AM