MEC2 will calculate the annualized net income by reducing the gross income by allowable deductions.

Allow the following verified deductions from annual gross income:

· Actual child support paid to someone living outside of the household. Actual child support paid on behalf of someone living outside of the household. This deduction allows the full child support payment to be deducted.

· Spousal support paid to or on behalf of someone living outside of the household.

· Medical, dental and vision insurance premiums for family members, paid by family members.

· If the participant is on Medical Assistance, any portion of the insurance premium that the participant is not reimbursed for.

· Expenditures necessary to secure payment of unearned income (for example, lawyer’s fees for an insurance settlement can be deducted from the unearned income).

Do NOT allow the following deductions:

· Pre-tax withholding accounts for anticipated expenses, such as medical/dental, child care and transportation expenses.

· Insurance premiums for other than medical, dental or vision insurance.

· Flexible work benefits received from an employer if the employee has the option of receiving the benefit or benefits in cash.

If medical support payments are received from the non-custodial parent (NCP), these amounts are considered income and are added to gross annual income. Client must then provide verification of medical insurance premiums paid to have any amount deducted.

Verification of income deductions

The deduction must be verified in order to reduce annualized gross income. See Chapter 7.9 (Income Verification) for examples of acceptable verification.

Deductions do not need to be verified for families eligible for expedited child care for families experiencing homelessness. Unverified deductions will reduce income for expedited child care applications only. If verification of the deduction is not provided during the three-month period, the family continues to be eligible and the copay cannot increase. At the family’s next redetermination, verification of the deduction would be required in order to reduce annualized gross income.

Legal authority

Minnesota Statutes 119B.011
Minnesota Statutes 119B.025, subd. 1
Minnesota Rules 3400.0170