1. Earnings Disregards

Earnings disregards are employed by most states and most programs that use a net income test. The exceptions in our sample are Colorado's Medicaid poverty expansion and S-SCHIP programs. Earnings disregards are frequently time sensitive--that is, the disregard becomes less generous over time--and the disregard can differ between applicants and recipients.⁹ Tables II.2 and II.3 show earnings disregards for applicants and recipients, respectively. Today, states have the option to continue using the old AFDC standard earnings disregard policies, or establish new disregards for their TANF and Medicaid programs which are at least as generous as the standards in place on July 16, 1996.¹⁰ Among all states, 42 have chosen to establish new earnings disregards for their TANF programs (ACF 1998). In our sample of 10 states, the 1931 Medicaid programs in Arkansas, Florida, and New York have adopted the new earnings disregards used by the state's TANF programs. Other 1931 Medicaid programs continue to use the old AFDC standard, such as the $90 disregard applied to each person with earnings.¹¹ As a result, the disregard used by the state's TANF program may differ from the one used by the 1931 Medicaid program--examples include Alabama, Connecticut, and New Jersey. The Medicaid expansion programs (poverty and M-SCHIP) in our sample states continue to use the old AFDC standard earnings disregard when the program uses a net income test.

TABLE II.2
DESCRIPTION OF EARNINGS DISREGARDS FOR APPLICANTS
	Medicaid			SCHIP		Other
	TANF	1931/AFDC	Poverty Expansion	M-SCHIP	S-SCHIP	Other
Alabama	Other^a	AFDC Standard	AFDC Standard	AFDC Standard	NA	NA
Arkansas	Other^b	Other^b	AFDC Standard	AFDC Standard	NA	NA
California	AFDC Standard	AFDC Standard	AFDC Standard	AFDC Standard	NA	NA
Colorado	AFDC Standard	AFDC Standard	NA	NA	NA	NA
Connecticut	AFDC Standard	AFDC Standard	AFDC Standard	AFDC Standard	AFDC Standard	NA
Florida	AFDC Standard	AFDC Standard	AFDC Standard	AFDC Standard	MediKids: AFDC Standard Healthy Kids: NA	NA
Massachusetts	Other^c	NA	NA	NA	NA	NA
Michigan	AFDC Standard	AFDC Standard	AFDC Standard	AFDC Standard	AFDC Standard	NA
New Jersey	AFDC Standard	AFDC Standard	AFDC Standard	AFDC Standard	NA	NA
New York	AFDC Standard	AFDC Standard	AFDC Standard	AFDC Standard	NA	NA
SOURCE: MPR State Income Eligibility Requirements Database. NOTE: NA = Not applicable AFDC Standard: Disregard $90 of earned income. ^aDisregard 100 percent of earnings for three months. ^bDisregard 20 percent of earnings. ^cDisregard $90 of earned income, if exempt. Disregard $120 of earned income for each person with earned income and 50 percent of the remainder, if not exempt.

TABLE II.3
DESCRIPTION OF EARNINGS DISREGARDS FOR RECIPIENTS
	Medicaid			SCHIP		Other
	TANF	1931/AFDC	Poverty Expansion	M-SCHIP	S-SCHIP	Other
Alabama	Other^a	AFDC Standard	AFDC Standard	AFDC Standard	NA	NA
Arkansas	Other^b	Other^b	Other^c	Other^c	NA	NA
California	Other^d	Other^e	Other^c	Other^c	NA	NA
Colorado	AFDC Standard	Other^c	NA	NA	NA	NA
Connecticut	Other^f	AFDC Standard	AFDC Standard	AFDC Standard	Other^g	NA
Florida	Other^h	Other^h	Other^c	Other^c	MediKids: Other^c Healthy Kids: NA	NA
Massachusetts	AFDC Standard	NA	NA	NA	NA	NA
Michigan	Otherⁱ	AFDC Standard	AFDC Standard	AFDC Standard	AFDC Standard	NA
New Jersey	Other^j	Other^c	Other^c	Other^c	NA	NA
New York	Other^k	Other^k	AFDC Standard	AFDC Standard	NA	NA
SOURCE: MPR State Income Eligibility Requirements Database. NOTE: NA = Not applicable AFDC Standards: Disregard $90 + $30 + 1/3 of the remainder of earned income for each person for the first four months. Disregard $90 + $30 of earned income for months 5 through 12. Disregard $90 of earned income for each person with earned income for month 13 and beyond. ^aDisregard 100 percent of earnings for three months and disregard 20 percent of earnings for month 4 and beyond. ^bDisregard 20 percent of earnings and 60 percent of the remainder. ^cDisregard $90 of earned income for each person with earned income. ^dDisregard first $225 of the family's disability-based income and earnings and disregard 50 percent of remaining earnings (not including disability-based income). ^eDisregard first $240 from the earnings of the two highest earners and disregard first $120 from the earnings of all others. If it is a Sneede case, disregard first $240 from the earnings of each working family member, and disregard 50 percent of the remaining earnings. ^fDisregard all earnings below the poverty level. ^gDisregard up to 65 percent of the federal poverty level as long as income after disregard is above 235 percent of the federal poverty level. ^hDisregard first $200 of earned income and 50 percent of the remainder. ⁱDisregard $200 and 20 percent of the remainder. ^jDisregard 100 percent of the earnings for the first month and 50 percent thereafter. ^kDisregard first $90 of earned income for each person with earned income and 45 percent of the remainder.

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Form Approved OMB# 0990-0379 Exp. Date 9/30/2020

Simulation of Medicaid and SCHIP Eligibility: Implications of Findings From 10 States. Final Report.. 1. Earnings Disregards

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