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Issue Alert - 09-04-02

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Date:

Apr 10, 2009

Program Area:

Family Independence Program (FIP), Refugee Assistance Program (RAP), State Disability Assistance (SDA), Child Development Care (CDC), and Food Assistance Program (FAP)

Issue Summary:

Department of Human Services (DHS) has added policy regarding the treatment of interest and dividend income for the above programs

Persons Affected:

Individuals applying for or receiving the above programs who have interest and/or dividend income

For More Information:

Center for Civil Justice 320 S. Washington, 2nd Floor Saginaw, MI 48607 (989) 755-3120, (800)724-7441 Fax: (989) 755-3558 E-mail: info@ccj-mi.org

Michigan Poverty Law Program 611 Church Street, Suite 4A Ann Arbor, MI 48104-3000 (734) 998-6100 (734) 998-9125 Fax


Background

The Department of Human Services (DHS) considers income and assets when determining eligibility for most programs it administers.  How each type of income is counted varies depending on the particular benefit program and the type of income.  For more information, see DHS Program Eligibility Manual 500 at: 

 

http://www.mfia.state.mi.us/olmweb/ex/html/

What's Happening?

DHS has issued policy on how it will treat interest and dividend income for Family Independence Program (FIP), Refugee Assistance Program (RAP), Child Day Care (CDC), Food Assistance Program (FAP), and State Disability Assistance (SDA) purposes.  Interest and dividend income will be divided by the number of months it is intended to cover and counted as income for each of the months.  If the interest or dividend payment is reinvested in the asset producing the income, then the interest or dividend payment is NOT counted as income.

For example, if an individual gets an interest payment from a 6 month Certificate of Deposit (CD), the payment will be divided by 6 and included as unearned income.  It is not clear which months the income is counted toward, because the interest “covers” the previous six months but was not available to the individual until it was paid. 

Income or dividends that are automatically reinvested in the asset will not be counted as income, but may still be countable under the asset policy.  For FAP and CDC, there is no asset test.  For FIP, RAP and SDA, review PEM 400 at the link above. 

For Medicaid and the Adult Medical Program (AMP) interest and dividends are treated as income in the month received, regardless of whether they are reinvested or not.


What Should Advocates Do?

Make clients aware of the new rules.

What Should Clients Do?

 If you believe that your income or assets are counted incorrectly, seek legal advice.  See “Finding Legal Help”, below.  If the problem involves the Food Assistance Program (FAP), call the Food and Nutrition Helpline at (800) 481-4989. 

Finding Help

Most legal aid and legal services offices handle these types of cases, and they do not charge a fee.

You can locate various sources of legal and related services, including the free legal aid office that serves your county, at MichiganLegalAid.org.

You can also look in the yellow pages under "attorneys" or call the toll-free lawyer referral number, (800) 968-0738.