If the residential agency is a representative payee, they are responsible for calculating the personal allowance. The type of residence in which a person lives determines the statutory minimum amount of personal allowance the person must receive.
These amounts change any time there is a Cost of Living Adjustment (COLA). If there is no COLA, the amounts remain unchanged. OPWDD posts the latest information about current benefit levels and personal allowance amounts on its website.
Depending on a person’s income and where they live, personal allowance laws (section 131-o of the Social Services Law) set the base amount of the allowance. This is called the statutory amount. In addition, if a person has income exemptions, they can get more personal allowance. The most common types of income exemptions are the general income disregard and earned income exclusion. See below for more information.
Unearned Versus Earned Income
Unearned income is received from sources other than work-related income. Unearned income includes benefits from Social Security, Supplemental Security Income (SSI), pensions, State disability payments, unemployment, interest income and cash from friends and relatives.
Earned income is any income received from work activity including wages, salaries, tips, and income from self-employment.
General Income Disregard
The first $20 of income other than SSI is not counted when calculating personal allowance. This is called a general income disregard because it can be applied to both unearned and earned income. If the person receives both unearned and earned income, the disregard is applied to the unearned income first. If there is any part of the $20 left over after applying the disregard to the unearned income, the rest of the disregard is applied to earnings if the person works. If the person gets SSI and other unearned income, the disregard is applied to the other unearned income. If the person has SSI and earned income, the disregard is applied to the earned income. If the person gets SSI only, the $20 disregard does not apply.
An individual in a certified CR, IRA, or family care home who receives income greater than $20 from any source besides SSI is entitled to personal allowance equal to the current statutory amount plus $20.
Exception: A person who lives in an ICF, DC, SRU, specialty hospital, or nursing facility is subject to chronic care budgeting and does not get the $20 general income disregard.
Earned Income Exclusion
A person who works is entitled to have some of their earned income excluded when calculating their personal allowance. This is called the earned income exclusion and allows individuals who work to keep a greater portion of their earnings. The earned income exclusion is applied as follows:
- The first $65 of monthly gross earned income is excluded
- One-half of the remainder (half of the amount over $65) is excluded
An individual who receives SSI and wages will have personal allowance equal to the current statutory amount plus $20 (general income disregard) plus $65 plus ½ the balance of the wages (earned income exclusion). A person with less than $65 in monthly gross wages will have the full wage amount excluded.
Examples of Calculations
The following are some real-life examples and calculations.
Unearned Income Only
Example 1: Debbie lives in a Voluntary Operated Individualized Residential Alternative and receives only SSI each month. Her total monthly personal allowance is the statutory amount for an IRA.
Example 2: Shawn lives in a State Operated Individualized Residential Alternative and receives Social Security and SSI. Since he receives income other than SSI, he gets a general income disregard of $20 in addition to the statutory personal allowance for an IRA.
Example 3: Jon lives in a Voluntary Operated Intermediate Care Facility. He receives VA benefits and Social Security. The statutory personal allowance for an ICF is $35. This is Jon’s full personal allowance because the general income disregard does not apply to people living in ICFs.
Unearned and Earned Income
Example 4: Jim lives in a State Operated Individualized Residential Alternative and receives SSI and earned income of $18 per month. His full earnings of $18 are excluded as part of the general income disregard and are added to his statutory personal allowance. Since Jim does not have $20 in income besides SSI, he can only exclude up to the $18 in earnings, because the $20 disregard does not apply to SSI.
Interest and Dividends
Interest and dividends earned on resources usually belong to the individual, do not count as income and are not included in the personal allowance calculation. Contact your local RSFO for advice with any unusual situations.
Federal Tax Returns and Earned Income Credits
Federal income tax refunds and earned income tax credits are exempt as income in the month of receipt and as a resource for the following 12 months. These funds are available as personal allowance to the person and should be included in the personal expenditure plan.
Blind and Impairment Related Work Expenses
Blind Work Expenses and Impairment Related Work Expenses can reduce a person’s countable income and result in higher SSI payments or a lower Medicaid spenddown. This will give the person additional money for personal allowance. See the Benefit Development Resource Guide on OPWDD’s website or contact your local Social Security Office for more information on blind or impairment related work expenses.
How Medicaid Budgeting Impacts Personal Allowance
People with special Medicaid budgeting, including Medicaid Buy-In for Working People with Disabilities (MBI-WPD); Disabled Adult Child (DAC); Pickle; and 1619(b), may have additional funds available for their personal use each month. This is in addition to the statutory personal allowance and personal allowance from wages and should be handled in the same manner.
A person who is eligible for DAC or Pickle budgeting or who is 1619(b) eligible must be otherwise eligible for SSI, meaning their countable resources cannot exceed $2,000 on the first of each month. A person participating in MBI-WPD may have countable resources up to the MBI-WPD resource limit. For information on any of these Medicaid programs, see the Benefit Development Resource Guide on OPWDD’s website.