1805.030.00 Modified Adjusted Gross Income (MAGI) Methodology

IM-92 June 18, 2020; IM-103 July 28, 2017; IM-17 February 21, 2017; IM-97 November 9, 2015

Projection of income is an estimate of income that is expected to continue through the certification period. This estimate is based on expectation and knowledge of the participant’s current, past, or future circumstances. In estimating the amount of included income, consider all factors that most accurately estimate and reflect the amount received.

Use current monthly income to evaluate eligibility for MO HealthNet. Current monthly income is an average of income received within the past 30 days.

• Follow the hierarchy of income evidence to use in the MAGI Policy Manual section, 1805.030.05 Income Evidence.
• For instructions on converting income to a monthly amount see the MAGI Policy section, 1805.030.25.10 Patterns of Income.

If income fluctuates to the extent that a 30-day period does not accurately reflect projected income, choose a method that accurately indicates or reflects future income. Enter a detailed comment to record the reason for the time-period used.

1. A participant works the same number of hours each pay period but began working various amounts of overtime prior to the application. If overtime is expected to continue, average the income that includes overtime to determine the monthly income amount to budget.

   EXAMPLE: Ms. Johnson works as a clerk in an insurance firm. Her regular hourly rate is $10.00. However, for the past four months she has been working overtime during each weekly pay period. Her gross weekly earnings with overtime is $460. Convert this to monthly income by multiplying $460 x 4.333 = $1993.18. Ms. Johnson’s projected monthly income is $1993.18. Since she has been working overtime consistently for over 30 days it is appropriate to include the overtime in her budget.

2. If the overtime is to stop, complete the budget for the month the overtime pay will not be received without considering the overtime.

   EXAMPLE: Two months after approval, Ms. Johnson reports she is no longer working overtime. Complete the budget based on Ms. Johnson’s normal wages of $10.00 per hour for 40 hours per week. Convert her income to monthly, $10.00 x 40 hours = $400 x 4.333 weeks = $1,733.20. Ms. Johnson’s expected monthly income amount is now $1,733.20.

3. The participant’s income varies with no set pattern. Average past earnings to determine the representative monthly amount to project income.

   EXAMPLE: Ms. Smith has worked at the local factory for the past three years doing piece work. She regularly works 40 hours per week. Her income varies from pay period to pay period depending on her production. No changes are expected in the piece work rate Ms. Smith is paid, nor in the hours worked. After discussing with Ms. Smith variations in her earnings over the past several months, the most recent 30 days are not an adequate representation of her earnings. After evaluating information provided by Ms. Smith, the past 12 weeks yield the most accurate estimate of her average earnings. Total earnings for this period are $1,200, averaging $100 per week. Convert this to monthly income of 4.333 x $100 = $433.33. Project $433.33 as the monthly earnings on the budget.

   “Actual income” is the income that was actually received in a particular month. Actual income is not considered a projection of income or used for ongoing projection of income. In the following situations actual income is used:

   • Month in which income begins.
     • EXAMPLE: Amy reports she began working at a department store in February. She expects to receive her first two pay checks within February.  The first pay check will include training hours and does not accurately reflect ongoing income. Amy attests that her second paycheck accurately reflects what she anticipates for her ongoing income. The budget for February will be an actual budget combining the two paychecks she receives during the month, her first and second checks. Use her second paycheck amount to budget for March and ongoing.
   • Month in which income ends.
     • EXAMPLE: Sawyer reports he was fired from ABC, Inc. in April. Enter an actual budget for April with the income that was actually received in April. End the income source. A future budget reflecting ongoing income is not needed.
   • Month in which a pay period is zero.
     • EXAMPLE: Kayla works at Break Time and is paid weekly. She missed two weeks of work in June due to an illness. Kayla does not have sick time therefore she was on leave without pay. The budget for June is actual and will include the income actually received by Kayla within June. The July and ongoing budget should be an accurate reflection of expected ongoing income.
   • Lump Sum Payments.
     • EXAMPLE:  Henry applied for MO HealthNet benefits for himself and his daughter Kennedy on June 20th.  Henry received a one-time inheritance payment on June 5th in the amount of $5,500.  Since lump sum payments are only counted in the month received, an actual budget should be used.  Henry’s inheritance is entered for June as actual income.  An ongoing budget is not needed since this was a one-time payment.

Claims that are established based on the projection of income are because one of the following applies:

• The participant failed to report income or circumstances he/she was aware of
• The eligibility specialist made an error considering information that was available
• • •  

Always record a comment regarding the projections of income. The comment should include what was used to determine the projected income, why it was used, how it was calculated, and any other pertinent information.