Lump Sum cash assistance and- TANF/SFA-related medical assistance
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Lump Sum cash assistance and- TANF/SFA-related medical assistance


Revised September 26, 2013



Purpose: This category contains the policies and procedures for budgeting lump sum payments for cash, TANF/SFA-Related medical, and Basic Food.

WAC 388-455-0005How do lump sum payments affect benefits?
WAC 388-455-0010When and how does the department treat lump sum payments as a resource for cash assistance programs?
WAC 388-455-0015When and how does the department treat lump sum payments as income for cash assistance programs?

WAC 388-455-0005

WAC 388-455-0005

Effective October 1, 2013

WAC 388-455-0005 How do lump sum payments affect benefits?

  1. A lump sum payment is money that someone receives but does not expect to receive on a continuing basis.
  2. For cash assistance programs, we count a lump sum payment :
    1. As a resource, under 388-455-0010, if it was awarded for wrongful death, personal injury, damage, or loss of property.
    2. As income, under 388-455-0015, if it was received for any other reason, with the exception of subsection (3) and (4) of this section.
  3. For cash assistance programs, tax refunds and earned income tax lump sums are excluded as income and excluded as a resource for twelve months from the date of receipt.
  4. For Basic Food, we count lump sum payments for a previous period as a resource under WAC 388‑470‑0055.  We count any amount for current or future months as income to your assistance unit.

This is a reprint of the official rule as published by the Office of the Code Reviser. If there are previous versions of this rule, they can be found using the Legislative Search page.

CLARIFYING INFORMATION

*** As a result of implementation of the Affordable Care Act (ACA), this clarifying page may no longer be effective for medical coverage applications received on or after 10/01/2013. Please see the ACA Transition Plan for more information. Clients who need to apply for medical coverage on or after 10/01/2013 should be referred to Washington Healthplanfinder. ***

  1. For treatment of lump sum payments placed in trust for ABD cash clients, see WAC 388-450-0005.
  2. Compensatory awards, settlements, and retroactive benefits are often issued in several smaller payments instead of one large payment. These types of payments are considered unearned income. See WAC 388-450-0025.
  3. Retroactive Lump Sums: 

For Basic Food, we can only count the portion of a lump sum payment that is for a previous period as a resource.  We count any portion that is for the current period as income.   However, with prospective budgeting we normally will not be able to budget the current much income against the household’s benefits.


EXAMPLE

Bill was laid off from his job at a chicken processing plant in March.  He received $3,000 in severance pay and $1,200 payout for accrued vacation leave.    

  • Because the severance pay is not for a previous period, we must count it as income for March.  We count any remaining amount as a resource in following months.
  • The payout of accrued vacation leave is for a previous period.  We would count this portion of the payment as a resource.


EXAMPLE

Sharon received a $6,000 lump sum payment of Supplemental Security Income (SSI) benefits in April.  Sharon’s award letter indicated that her disability was approved for a fixed period of time and she will not receive ongoing benefits.  The letter shows that $5,300 is for a prior period of time, but $700 of the payment is for the current month and next month’s benefits.

  • We count the portion of the lump sum paid for prior months as a resource in April.
  • We count the $700 portion that is not for a previous period as Sharon’s income.


4.     Diversion Cash Assistance:

For Basic Food, we consider Diversion Cash Assistance (DCA) payments to be lump sum payments. 


WAC 388-455-0010

WAC 388-455-0010

Effective October 1, 2013

WAC 388-455-0010 When and how does the department treat lump sum payments as a resource for cash assistance programs?

  1. If you receive a lump sum payment, we count it as a resource if it was awarded for:
    1. Wrongful death;
    2. Personal injury;
    3. Damage; or
    4. Loss of property.
  2. If some of your lump sum payment is designated for medical bills or to repair or replace damaged property, we do not count the designated amount as a resource for sixty days starting the month after you received the payment.  After the sixty day period, we count all of the lump sum payment that remains as a resource.

This is a reprint of the official rule as published by the Office of the Code Reviser. If there are previous versions of this rule, they can be found using the Legislative Search page.

CLARIFYING INFORMATION

  1. We exclude a portion of the lump sum payment for 60 days in order to give the client time to use the money for its intended purpose (repair or replacement of damaged or lost property or to cover medical costs).

  2. If a client transfers the portion of the payment that counts as a resource for less than it is worth, they may have a period of ineligibility.  See TRANSFER OF PROPERTY.


WORKER RESPONSIBILITIES

1.   When a client reports that they have received a compensatory award or settlement, determine the amount that is designated to repair or replace damaged or lost property or to cover medical expenses.

2.      If any portion is designated for these specific reasons:

a.      Do not count this amount for 60 days following the month of receipt.

b.      Set an alert to request verification of the amount that remains after the 60-day period.

c.      When you receive the verification, determine if the client's total resources exceed the resource limit.

                                                        i.          If the resources are over the limit, terminate the benefits following adverse action requirements.  See LETTERS.

                                                      ii.          If the resources are under the limit, the client remains eligible for benefits.

  1. For the portion not designated for the specific reasons:
    1. Request verification of the amount remaining after the month of receipt.
    2. When you receive the verification, determine if the client's total resources exceed the resource limit.

                                                        i.          If the resources are over the limit, terminate the benefits following adverse action requirements.  See LETTERS.

                                                      ii.          If the resources are under the limit, the client remains eligible for benefits.


WAC 388-455-0015

WAC 388-455-0015

Effective October 1, 2013

WAC 388-455-0015 When and how does the department treat lump sum payments as income for cash assistance programs?

This section applies to cash assistance programs.

  1. If you receive a lump sum payment that is not awarded for wrongful death, personal injury, damage, or loss of property, we count this payment as income to your assistance unit. We budget this income according to effective date rules under WAC 388-418-0020.
  2. For cash assistance, if you cannot access some or all of your lump sum payment for reasons beyond your control, we will adjust the amount we count as income to your assistance unit as described under WAC 388-450-0005.
  3. To decide the amount of your lump sum we count as income, we take the following steps:
    1. First, we subtract the value of your current resources from the resource limit under WAC 388-470-0005;
    2. Then, we subtract the difference in (3)(a) from the total amount of the lump sum; and
    3. The amount left over is what we count as income, as specified in WAC 388-450-0025 and WAC 388-450-0030.
  4. When the countable amount of the lump sum payment is:
    1. Less than your payment standard plus additional requirements, we count it as income in the month it is received.
    2. More than one month's payment standard plus additional requirements but less than two months:
      1. We count the portion equal to one month's payment standard plus additional requirements as income in the month it is received; and
      2. We count the remainder as income the following month.
    3. Equal to or greater than the total of the payment standard plus additional requirements for the month of receipt and the following month, we count the payment as income for those months.
  5. If you receive a one-time lump sum payment, and you are ineligible or disqualified from receiving cash benefits:
    1. We allocate the payment to meet your needs as described under WAC 388-450-0105; and
    2. Count the remainder as a lump sum payment available to eligible members of your assistance unit according to the rules of this section.

This is a reprint of the official rule as published by the Office of the Code Reviser. If there are previous versions of this rule, they can be found using the Legislative Search page.

CLARIFYING INFORMATION

  1. Clients may be required to report the receipt of a one-time payment under WAC 388-418-0005.
  2. In some situations, clients will know beforehand that they will receive a one-time payment.

    1. If this happens, we budget the payment against the benefits following the effective dates in  WAC 388-418-0020.

    2. This may result in a suspense or termination. See WAC 388-450-0245.

  3. In most situations, clients will not know that they are going to receive a one-time payment until they actually have it.

    1. Often, the payment will not be budgeted against the assistance due to the rules on effective dates.

    2. You do not have to reconcile the difference to create an overpayment unless the client failed to report timely.

  4. For cash assistance, if the lump sum is received for a child, the lump sum is counted as income unless the client can put the money into an irrevocable education trust. See WAC 388-470-0045.

  5. Some reasons all or part of the lump sum may become unavailable beyond the client’s control include:

    1.  The client loses the payment funds

    2. The payment funds are stolen; or

    3. The client has unavoidable expenditures such as medical bills or lawyer fees.

    4. If a client received a lump sum payment while living in another state and a period of ineligibility was established in that state, the period of ineligibility does not carry over to this state.


WORKER RESPONSIBILITIES

When determining the value of the client’s existing resources, do not include cash assistance the client received within thirty days of receiving the lump sum.

Client Reports Before Receipt
  1. When a client reports that they will be receiving a one-time payment, determine if you need any other information before taking action. You need to know the amount and date of receipt. If the client did not provide this information at the time of report, request the information and allow 10 days for the client to provide it.

  2. When you receive the information, budget the payment against the appropriate months by allowing 10-days advance notice.

  3. If the payment causes the AU to be over income for one month, suspend the benefits for that month.

  4. If the payment causes the AU to be over income for two months, terminate the benefits and determine eligibility for other medical programs.

  5. If you do not have time to give the client 10-day notice, do not budget the payment against the benefits or create an overpayment.


Client Reports After Receipt
  1. When a client reports that they have received a one-time payment, determine if you need any other information before taking action. You need to know the amount and date of receipt. If the client did not provide this information at the time of report, request the information and allow 10 days for the client to provide it.

  2. When you receive the information, disregard the portion of the payment that is considered income in the month of receipt.

  3. If you have time to give the client 10 days notice, budget the appropriate amount against the following month.

  4. If the payment causes the AU to be over income for that month, suspend the benefits.

  5. If you do not have time to give the client 10-day notice, do not budget the payment against the benefits or create an overpayment.


Client Reports Untimely
  1. When a client reports the receipt of a lump sum payment later than required under WAC 388-418-0007, determine the effective date as if they had reported timely. See  WAC 388-418-0020.

  2. Create overpayments as appropriate. See BENEFIT ERRORS.


ACES PROCEDURES

See Interview -  (RES1), (RES2) and (RES3) screens.

Modification Date: September 26, 2013