Insurance Payments
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The section Includes information about income from insurance payments.
Policy
Insurance payments received by the participant are countable as unearned income when any of the following apply:
●The payment is made payable to the participant and used for a purpose other than to replace or repair insured items.
●The payments are received monthly, bi-weekly, or weekly and used for a purpose other than to replace or repair insured items.
●The payments are used for or intended to meet basic needs(g).
See Leave Pay when an employer pays Short-Term and Long-Term Disability payments.
Insurance payments received by a participant are not countable as unearned income when the payment is intended to repay a specific bill or debt and is not used for other needs.
Insurance payments include, and are not limited to, all of the following insurance types:
●Accident Insurance
●Critical Illness Insurance
●Earthquake Insurance
●Flood Insurance
●Long-term Disability
●Short-term Disability
●Wage Insurance
For specific policies, see each of the following insurance payments:
●Life Insurance (See Inheritance)
Countable income is used to determine an income budget. (See Income Budgeting to see how FAA determines the income budget.) FAA needs to know about income that is both countable and not countable to determine whether a budgetary unit’s income is exceeding their expenses. (See Income Eligibility for more information about how FAA uses countable and not countable income.)
Procedures
Treat an insurance payment received as a lump sum as a resource when the payment is received in a past month. (See LUMP Sum - LIAS) for more information.
When the participant is present, have them sign the Authority to Release (FAA‑1765A) form to contact any companies or businesses involved. The FAA-1765A can be faxed or emailed to the participant's employer when it is not possible to use the Application for Benefits (FAA-0001A) or the HEAplus Authority to Release signed statement.
Verification
System interface and the case file(g) must be reviewed before verification is requested. No additional verification is needed when AZTECS interface or HEAplus hubs have verified the information.
The participant has the primary responsibility for providing verification. (See Participant Responsibilities – Providing Verification for additional policy.)
For NA, all of the following income is required to be verified before eligibility is determined:
●Reported on a new application, during the interview of a new application, or changes reported before the eligibility determination of a new application.
●Changes after an eligibility determination of a new application (e.g., a renewal application, mid approval contact, etc.) and any of the following apply:
The source of the income has changed.
The income is questionable(g) or unclear(g).
The reported income amount has changed by $51 or more.
The previous verification in the case file is more than 59 calendar days old.
For CA, all income is required to be verified before determining eligibility.
Examples of verification that can be used for insurance payments include, and are not limited to, any of the following:
●Bank records
●Agency or payer providing the income
●Court records or court orders
●DCSS documents or print outs
●Divorce or separation papers or contact with the Clerk of the Court
●Insurance policies
●Participant Statement verification when one of the following occur:
Obtaining documented or collateral contact verification may cause harm or undue hardship(g) for the participant.
When all of the following occur:
●Other attempts to obtain the verification have failed. This includes documented and collateral contact verification.
●The participant has requested assistance from FAA.
●The worker has evaluated the request for assistance and cannot obtain the verification from another acceptable source.
●The participant statement is not questionable(g).
AZTECS Keying Procedures
To key insurance payments on UNIN, complete one of the following:
●For payments received for purposes other than to replace or repair insured items, complete one of the following:
Key the IN BN Unearned Income Code in the INC TYP field on UNIC When paid monthly, weekly, or bi-weekly for payments to meet the standard of basic needs(g).
Key the IN NR Unearned Income Code in the INC TYP field when the payment is for other purposes
●For payment purposes like bills, debts, or to replace or repair insured items, all the following applies:
Key the IN RR Unearned Income Code in the INC TYP field on UNIC
Treat a lump sum payment as a resource. See LUMP Sum - LIAS for keying information.
Document the case file(g) thoroughly to support keyed codes, amounts, and frequencies. See the AZTECS Data Entry Guide for instructions on keying the AZTECS income screens.
NOTE Documentation must support determinations of eligibility and benefit level. Document in sufficient detail to ensure that any reviewer can assess whether the determination is reasonable and accurate. Include specific information regarding the reason the income is determined to be normal. (See Budgeting Income Documentation Requirements for additional information.)
Legal Authorities
7 CFR 273.9(c)(8)
last revised 10/02/2023