Title 16
15000 AFDC-TANF Related Programs
15120 Low Income Families With Children Under Section 1931
The Personal Responsibility and Work Opportunity Reconciliation Act of 1996, P.L. 104-193, Section 114, established a new Medicaid eligibility group for low income families with children at Section 1931 of the Social Security Act. Coverage for this mandatory categorically needy group of families with children is effective March 10, 1997, the date that Delaware's TANF plan was approved.
Section 1931 defines the basic criteria for determining Medicaid eligibility based upon AFDC eligibility criteria. The criteria includes income and resource standards and methodologies as in effect on July 16, 1996, and deprivation and specified relative rules that were in effect on that date. Section 1931 gives states flexibility to change these criteria.
Families who are eligible for Medicaid under Section 1931 may be receiving TANF cash assistance or may be Medicaid only families.
15120.1 Technical Eligibility
Applicants must meet general technical eligibility criteria such as state residency, citizenship or qualified alien status, Social Security number, assignment of rights, etc., as described in the Common Eligibility Information section of this manual. Families eligible for Medicaid under Section 1931 do not have to comply with the Contract of Mutual Responsibility and are not subject to any TANF sanctions.
15120.1.1 Living With a Specified Relative
The family must include a child who is living with a parent or specified relative. A child is an individual under the age of 18 or under age 19 and who is still a full-time student in high school, GED, or equivalent program and will graduate prior to his or her 19th birthday.
Emancipated minors are considered adults.
To be eligible for Medicaid under Section 1931, a child must be living in the home of a relative by blood, marriage, or adoption who is within the fifth degree of kinship to the child. The degree of relationship is as follows:
• parent (1st degree)
• grandparent (2nd degree)
• sibling (2nd degree)
• great-grandparent (3rd degree)
• uncle or aunt (3rd degree)
• nephew or niece (3rd degree)
• great-great-grandparent (4th degree)
• great-uncle or aunt (4th degree)
• first cousin (4th degree)
• great-great-great-grandparent (5th degree)
• great-great-uncle or aunt (5th degree)
• first cousin once removed (5th degree)
Any other persons named in the above groups whose relationship is one of the child's parents is established by legal adoption; the spouse of any person named in the above groups even though the marriage terminated by death or divorce.
The child must be living in the home of a parent or specified relative. The home is defined as the family setting where the child and the caretaker relative reside. The home exists as long as the relative is the responsible caretaker even if the child or the relative is temporarily absent. The rules of A Better Chance Welfare Reform Program are used to determine if the child is living in the home of a parent or specified relative.
15120.1.2 Medical Support Cooperation
Deprivation is not an eligibility requirement for this group. If the child is deprived of parental support, a referral to the Division of Child Support Enforcement for medical support is required.
15120.2 Financial Eligibility
TANF rules on income standards and methodologies (disregards, exclusions, allocations) apply to Section 1931 Medicaid except as provided in this section.
For Section 1931 Medicaid, there are two income tests to determine financial eligibility. The first test is a gross income test and the second is a net income test. For the gross income test, compare the family's gross income to 185% of the applicable standard of need. For the net income test, compare the family's net income to the applicable standard of need.
Financial eligibility for both applicant and recipient families will be calculated using the 30 and 1/3 disregard if applicable. This disregard allows the deduction of $30 plus 1/3 of the remaining earned income after the standard allowance for work connected expenses is subtracted.
The $30 plus 1/3 disregard is applied to earned income for four (4) consecutive months. If Medicaid under Section 1931 or employment ends before the fourth month, the earner is eligible for the disregard for four (4) additional months upon reapplication or re-employment.
When an earner's wages are so low ($90 or less in the month) that the income is zero before any part of the $30 plus 1/3 disregard can be applied, that month does not count as one of the four (4) consecutive months and the earner is eligible for the disregard for four (4) additional months.
After the $30 plus 1/3 disregard has been applied for four (4) consecutive months, the 1/3 disregard is removed from the budget. The $30 disregard continues to be deducted from earned income for eight (8) consecutive months. The $30 disregard is not repeated if an individual stops working or 1931 Medicaid ends before the completion of the eight (8) consecutive months. If 1931 Medicaid ends and the family reapplies, the $30 disregard from earned income is continued until the end of the original eight (8) consecutive months.
Unlike the $30 plus 1/3 disregard which is dependent upon the family having sufficient earned income and being 1931 Medicaid recipients, the $30 disregard is for a specific time period. This time period begins when the $30 plus 1/3 disregard ends and is not dependent upon the family having earned income or 1931 Medicaid.
When an earner has received the $30 and 1/3 disregard in four (4) consecutive months and the $30 deduction has been available for eight (8) consecutive additional months, neither disregard can be applied to earned income until the individual has not received Medicaid under Section 1931 for twelve (12) consecutive months.
All earned income is disregarded for the second and third months of eligibility.
All earned income is disregarded for 12 months after employment causes ineligibility.
A self-employment standard deduction is used to calculate self-employment income. The self-employment standard deduction is considered the cost to produce income. The self-employment standard deduction is a percentage that is determined annually and announced in the Cost-of-Living Adjustment (COLA) Administrative Notice each October.
To calculate self-employment income, use the gross proceeds and subtract the self- employment standard deduction. The result is the amount included in the gross income test (185% of the applicable standard of need). Standard earned income deductions are then applied to the self-employment income for the net income test (the applicable standard of need).
To receive the self-employment standard deduction, the individual must provide verification that costs are incurred to produce the self-employment income. Verification can include, but is not limited to, tax records, ledgers, business records, receipts, check receipts, and business statements. The individual does not have to verify all business costs to receive the standard deduction.
If the individual does not claim or verify any costs to produce the self-employment income, the self-employment standard deduction will not be applied.
When the application of the standard deduction results in a finding of ineligibility, the applicant or recipient will be given an opportunity to show that actual self-employment expenses exceed the standard deduction. If the actual expenses exceed the standard deduction, they will be used to determine net income from self-employment.
Actual self-employment expenses must be directly related to producing the goods or services. Actual self-employment expenses for the eligibility determination do not include all expenses that are allowed by the Internal Revenue Service. Actual self-employment expenses that are not allowed for the eligibility determination include depreciation, personal and entertainment expenses, personal transportation, purchase of capital equipment, payments on the principal of loans for capital assets or durable goods, and rent or mortgage payments when the business is in the home.
Any diversion assistance provided does not count as income.
Resources are not counted for Medicaid under Section 1931.
9 DE Reg. 564 (10/01/05)
10 DE Reg. 143 (07/01/06)
12 DE Reg. 1320 (04/01/09)
15120.3 Eligibility for Transitional Medicaid
If a family becomes ineligible for Medicaid under this eligibility group because of either child support payments or employment reasons, determine if the family is eligible for extended Medicaid under Prospective or Transitional Medicaid. (see DSSM 15200 and DSSM 15300 )
