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SD Medicare-Related Medicaid - Countable Income

When determining income-eligibility for the Medicare-Related Medicaid programs (QMB, SLMB, QI-1, and QWI), the Office of Medical Eligibility - Overview first starts by considering all types of income, earned and unearned.

NOTE: Net income from self-employment is considered earned income. Net income is the taxable income declared on your most recent income tax return. If a tax return was not filed or was filed and indicated no self-employment, the net income is as established on either a profit and loss statement or on some other business record for the tax year.

It then subtracts exclusions and deductions and compares the result to the Federal Poverty Level (FPL) for the size of the family.

Family Size: South Dakota has chosen to include all family members when determining the FPL family size. Biological, adopted or stepchildren up to age 18 (or age 21 if in school) are included in the household count. Children who are recipients of Supplemental Security Income (SSI) are not included in the family count. Spouses and children must be living in the home to be included in the family size. If a child is still living in the home at an age above the limit, the child is not considered in the family count. It does not matter if the adult child has a disability.

Exclusions and Deductions

Many types of income are excluded entirely, and a number of deductions (such as those for earned and unearned income) are allowed. Here are the Exclusions. (The Deductions are listed below.):


The following types of income are entirely excluded from your gross income in determining your Countable Income:

      Income of children in the family;

      Third-party payments to medical providers;

      County welfare payments to medical providers;

      Money paid by a school district for educational purposes;

      Income tax or sales tax refunds;

      Unearned irregular income from all sources which totals $20 or less per month;

      The following payments from the Department of Veterans' Affairs:

(a) The $90 reduced pension benefit for single veterans or surviving spouses of veterans in nursing facilities who are Medicaid recipients;

(b) Aid and attendance allowance;

(c) The clothing allowance for veterans with a service-connected disability for which the veteran uses a prosthetic or orthopedic appliance;

(d) Educational assistance;

(e) A payment adjustment for unusual medical expenses; and

(f) A payment to a Vietnam veteran's child who has spina bifida;

      Life insurance dividends;

      A benefit received under the provisions of the Older Americans Act of 1965, except wages or salary;

      A payment to a volunteer under the National and Community Service Trust Act of 1993, such as from SCORE, AmeriCorp-VISTA, RSVP, senior companion program, or the foster grandparent program;

      A payment received pursuant to the Agent Orange product liability settlement;

      A gift from a tax-exempt organization to a minor child who has a life-threatening condition;

      A hemophilia settlement fund payment;

      Income of an Supplemental Security Income (SSI) recipient that is used toward an SSI approved Plan for Achieving Self-Support (PASS);

      Income provided to victims of a presidentially-declared disaster from federal programs and agencies, joint federal and state programs, state or local government programs, or private organizations; and

      Income placed in a trust under the provisions of 67:46:05:32.03 of the SD Administrative Code.

      Assistance based on need provided by a local government or nongovernmental agency, such as Catholic Charities, county assistance, or assistance from the Salvation Army;

      Replacement of resources in cash or in kind because of loss, damage, or theft of property;

      Home energy assistance;

      Home produce for personal use;

      Foster care payments made to a foster care provider;

      Grants or loans to undergraduate students for educational purposes which are insured by the United States Secretary of Education;

      Housing assistance from Housing and Urban Development or Farmer's Home Administration;

      Credit life or credit disability insurance payments on loans, installment purchases, and similar items in the event of death or disability;

      Money borrowed;

      Money received as repayment on the principal of a loan;

      Reimbursements for expenses of obtaining income such as per diem payments and mileage;

      United States Department of Agriculture food commodities, the value of coupon allotments from government agencies and, for an individual age 60 or over, the value of meals received at a center or the value of meals delivered to the individual's home;

      Any benefits received under the provisions of the Older Americans Act of 1965, except wages or salary; and

      Indian judgment funds distributed on a per capita basis.


The following types of deductions from gross income are allowed:

      Deduction for court-ordered support or support enforced by OCSE: A deduction from the ineligible spouse's income of the amount paid under court order or enforced by the Office of Child Support Enforcement (OCSE) for the support of another person who is not in the household is allowed.

      Deduction from Earned Income: $65 plus one-half of the remainder is deducted from your total monthly earned income. If you are living with a spouse, the earned income deduction applies to the earned income of you both.

      Income Disregard: $20 a month is deducted from your unearned income unless the income is from a source based on need, such as certain veterans' benefits, TANF, or BIA general assistance. If unearned income is less than $20, the difference is deducted from your gross earned income before applying the earned income deduction. If you are living you're your spouse, the $20 deduction applies to your combined incomes.


Back to:

Medicaid for Low-Income Medicare Beneficiaries

Medicaid for Recipients of SSI and Related Programs

Office of Medical Eligibility - Overview

South Dakota Department of Social Services (DSS)

Welcome and Introduction to the South Dakota Benefits Information System

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