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How wage payments are treated depends on the following:
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If the payment is... |
Then the treatment is... |
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Wages |
Counted as earned income |
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Difficulty of Care Payments |
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Tips |
Under $20 per month are counted as unearned income for the non-MAGI programs. |
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U.S. Census Wages |
For wages from temporary work for the U.S. Census, see MA606N. |
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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. |
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On call, standby or non-work pay |
On call, standby or non-work pay Counted for all Medical Assistance programs as earned income. |
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Term |
Definition |
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Wages |
The amount paid to a person for services provided as an employee. Wages include:
NOTE An employer’s contributions toward an employee’s insurance, retirement or Unemployment Insurance are not counted as income for the employee. |
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Advances |
Amounts paid to the employee as an advance before the scheduled pay date. |
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Back Pay |
Amounts to make up the difference between what the employee was paid and what he or she should have been paid. |
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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:
See Difficulty of Care payments examples |
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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. |
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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. |
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Severance Pay |
Payment made by an employer to an employee after employment has ended. |
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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. |
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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:
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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.
When verifying the employer is a healthcare agency based on information from a website, add a case note with the type of healthcare agency and the website.
Proof that the person being cared for is on ALTCS and living with the customer includes AHCCCS eligibility and enrollment records.
To verify ALTCS and living with the customer, look up the person being cared for in HEAplus. Open ALTCS eligibility and the same residential address as the customer’s serves as proof.
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:
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Program |
Legal Authorities |
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ALTCS SSI-MAO Medicare Savings Program Freedom to Work |
42 USC 1382a(a)(1)(A) 20 CFR 416.1111(a) AAC R9-22-1909 |
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Adult Caretaker Relative Pregnant Woman Child KidsCare |
42 CFR 435.603 42 CFR 457.10, 300, 301 and 315 |