DEDUCTIONS FROM INCOME
§ 140.281. Deductions from unearned income.
(a) Unearned income expenses. For each applicant/recipient, the expenses which the applicant/recipient pays to be eligible for, or to receive, unearned income are deducted. These unearned income expenses include attorney fees, court costs and transportation costs. Personal income taxes are not expenses the applicant/recipient had to pay to get this income and are not allowable deductions.
(b) First $20 of income in a month other than income based on need. The first $20 of income received in a calendar month by an applicant/recipient group is deducted after allowable expense deductions in subsection (a) are deducted. The application of the deduction is as follows:
(1) The deduction does not apply to unearned income based on need and funded in whole or in part by the Federal government or by a nongovernment agency.
(2) This exception applies to income based on need and funded wholly by the State.
(3) This deduction applies to veterans benefits received by an applicant/recipient who is a veteran or is a dependent of a veteran on the basis of one of the following:
(i) A special act of Congress.
(ii) Service in the Indian Wars (January 8, 1817—December 31, 1881).
(iii) Service in the Civil War (1861—1865).
(iv) Service in the Spanish-American War (April 12, 1898—July 4, 1902).
(4) The deduction is first applied to the unearned income received by the applicant/recipient.
(5) If the applicant/recipient does not have unearned income or has less than $20 of unearned income in a calendar month, the remaining portion of the $20 deduction is applied to the earned income received in the calendar month under § 140.282(1) (relating to deductions from earned income).
Notes of Decisions Deductions; Conflict with Handbook
Under regulation, unavoidable bank fees, paid to access Social Security Disabilities benefits that are directly deposited into recipient’s account, are deductable expenses from unearned income. Although the Department’s Medical Assistance Eligibility Handbook indicates that they are not deductible, the regulation controls over the handbook, which is purely advisory. Franks v. Department of Public Welfare, 804 A.2d 144 (Pa. Cmwlth. 2002).
Cross References This section cited in 55 Pa. Code § 140.232 (relating to applicable income); 55 Pa. Code § 140.282 (relating to deductions from earned income); and 55 Pa. Code § 140.291 (relating to treatment of lump sum payments).
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