MSP Income Determination and Budgeting Rules

These rules apply to QMB, SLMB and QI-1 recipients, including dual eligibles. The following rules apply to QMB, SLMB and QI-1 income determinations:

  • QMB, SLMB and QI-1 income eligibility is based on a percentage of the federal poverty level. The individual’s income must be less than the QMB, SLMB or QI-1 income limits.

    • Important: The RSDI COLA (which is received in January) cannot be used to compute QMB, SLMB or QI-1 eligibility from January through March if it causes ineligibility. The Federal Poverty Level figures are published annually and are effective on April 1st. By disregarding the COLA increase, clients will not lose their Medicare benefits in the interim.

  • Medi-Cal income rules are first used to determine QMB, SLMB, or QI-1) eligibility. If a couple is not eligible using Medi-Cal rules, a second budget is computed using SSI rules, as they may be more advantageous.
  • SSI/SSP income is exempt for QMB.
  • Do not count other public assistance income of the QMB/SLMB/QI applicant, spouse or child (e.g., SSI, or CalWORKs).
  • Use the regular Medi-Cal income-in-kind rules, when applicable.

Budgeting, MC 176-1 QMB/SLMB/QI

CalSAWS will compute the budget. In the event of a system outage, the budget can be manually determined as follows.

  • Determine the net non-exempt income of a QMB/SLMB/QI applicant or couple:
  • Determine all members of the MFBU (eligible and ineligible). Include applicant, spouse, minor children (if any).
  • Count gross unearned income.
  • Allow the $20 any income disregard.
  • Allow the $65 + 1/2 deduction from the gross earned income of the QMB applicant or spouse.
  • The actual Impairment Related Work Expenses of a working, disabled QMB applicant/recipient are allowed as a deduction from his/her earned income.
  • Do not deduct the health insurance premium and other allocations.
If the QMB/SLMB/QI ...  Then...
applicant is single or in his own MFBU

If income is less than or equal to the QMB limit, he/she is QMB eligible.

If income is less than the SLMB or QI-1 limits, he/she is SLMB for QI-1 eligible.
applicant's spouse has no income   The SSI income rules used on the MC 176 QMB/SLMB 2A will not help.
applicant has a spouse with income or a spouse with income and minor children   Determine if there is QMB/SLMB/QI eligibility using SSI rules.

Budgeting, MC 176-2A QMB/SLMB/QI

The MC 176-2A QMB/SLMB/QI uses SSI income rules when a couple is over the QMB/SLMB/QI income limit when Medi-Cal rules (MC 176-1 QMB/SLMB/QI) are applied. Use this form only if the QMB/SLMB/QI applicant has an ineligible spouse, with or without children.

  • Income can only be allocated to minor children from the gross unearned and earned income of the Ineligible Spouse.
    • Complete Section II of the MC 176-2A QMB/SLMB/QI first if there are minor children in the home.
    • Subtract the minor child's income from the Standard SSI Allocation. (Compute separately for each child.)

      • Note: Using SSI income rules, a minor child is defined as any child under age 18 or 18-21 and a student.

  • Determine the income of the ineligible spouse (after allocating to the minor children).
  • When the MC 176-2A QMB/SLMB/QI is used, only the QMB/SLMB/QI Income Limit for an individual or couple (one or two) is used.
If the remaining gross income of the ineligible spouse is... Then...
less than or equal to the Standard SSI Allocation

It is exempt. 

Compare only the QMB/SLMB/QI applicant's income to the limit for one.

If at or below the QMB limit for one, eligible. If below the SLMB/QI limit for one, eligible.
greater than the Standard SSI Allocation  Combine the QMB/SLMB/QI applicant and spouse's income and use the QMB/SLMB/QI limit for two.

IRWE

The actual Impairment Related Work Expenses (IRWEs) of a QMB/SLMB/QI applicant/recipient which are necessary to become or remain employed can be deducted from his/her earned income only. Such expenses generally include:

  • Those required to control a disabling condition thereby enabling the individual to work.
    • ExamplesExamplesPrescriptions that are needed to control the disabling condition may be covered if they are not paid for by another source. However, routine prescriptions for unrelated medical conditions cannot be deducted from earnings.
  • Those essential to perform the physical and/or mental demands of a job. (e.g., wheelchairs, prosthesis, etc.)
  • Assistance in preparing for work and traveling to and from, (e.g., attendant care, transportation costs, exterior ramps or railings).

The actual cost to the QMB/SLMB/QI applicant must be verified.

Note: Do not allow IRWE that are being paid (or will be paid) by another source (e.g., Medicare, Medi-Cal, the State Department of Rehabilitation, private insurance).

QMB/SLMB/QI Budgeting Sequence Chart

References to MC 176 forms only apply to manual budgets as CalSAWS automatically computes and determines eligibility for these programs.

Family Composition Budget Sequence
Single QMB/SLMB/QI Applicant (no spouse or minor children) 

Complete MC 176-1 QMB/SLMB/QI, Columns I and III.

  • If the net-nonexempt income is less than or equal to the QMB limit, eligible.
  • If the net-nonexempt income is less than the SLMB or QI-1 limit, eligible.
  • If over, STOP. Not QMB/SLMB/QI eligible.
QMB/SLMB/QI Applicant with Ineligible Spouse (no minor children)

Complete MC 176-1 QMB/SLMB/QI, Columns I and III.

  • If the net-nonexempt income is less than or equal to the QMB limit for 2, eligible.
  • If the net-nonexempt income is less than the SLMB limit for 2, eligible.

If not eligible for QMB or SLMB using the MC 176-1 QMB/SLMB/QI, determine QMB/SLMB using the SSI rules. Complete the MC 176-2A QMB/SLMB/QI.

  • If the ineligible spouse's income is less than or equal to the Standard SSI Allocation, the ineligible spouse's income is exempt. Use the QMB/SLMB limit for one.

If not eligible for QMB or SLMB using the SSI rules, determine QI-1 eligibility.

  • If the ineligible spouse’s income is NOT exempt, use the MC 176-1 QMB/SLMB/QI to determine QI-1 eligibility. Use the QI-1 limit for two.
  • If the ineligible spouse’s income is exempt, use the MC 176-2A QMB/SLMB/QI to determine QI-1 eligibility. Use the QI-1 limit for one.
QMB/SLMB/QI Couple (both potentially QMB/SLMB/QI eligible, no minor children) 

Complete MC 176-1 QMB/SLMB/QI, Columns I and III.

  • If the net-nonexempt income is less than or equal to the QMB limit for two, eligible.
  • If the net-nonexempt income is less than the SLMB or QI-1 limit for two, eligible.
  • If over, STOP. Not QMB/SLMB/QI eligible.
QMB/SLMB/QI Couple (both potentially QMB/SLMB/QI eligible with minor children) 

Complete MC 176-1 QMB/SLMB/QI using all 3 columns.

  • If net-nonexempt income is less than or equal to the QMB income limit for the MFBU, STOP. Eligible.
  • If net-nonexempt income is less than the SLMB or QI-1 income limit for the MFBU, STOP. Eligible.

If NOT eligible, consider the spouse with the most income as the ineligible spouse. Complete all sections of the MC 176-2A QMB/SLMB/QI (first Section II, then III, and Section I last).

  • If the ineligible spouse's income is less than or equal to the Standard SSI Allocation, after allocating to children, exempt it and use the QMB/SLMB/QI income limit for 1.
  • If the ineligible spouse's income is more than the Standard SSI Allocation, count it and use the QMB/SLMB/QI income limit for 2. If over, STOP. Not QMB/SLMB/QI eligible.
Single Applicant with minor children and no spouse

Complete MC 176-1 QMB/SLMB/QI, all columns. STOP.

  • If net-nonexempt income is less than or equal to the QMB limit for the MFBU, STOP. Eligible.
  • If net-nonexempt income is less than the SLMB or QI-1 limit for the MFBU, STOP. Eligible.
QMB/SLMB/QI Applicant with ineligible spouse and minor children

Complete MC 176-1 QMB/SLMB/QI using all 3 columns.

  • If net-nonexempt income is less than or equal to QMB income limit for the MFBU, STOP. Eligible.
  • If net-nonexempt income is less than the SLMB income limit for the MFBU, STOP. Eligible.

If not eligible for QMB or SLMB using the MC 176-1 QMB/SLMB/QI, determine QMB/SLMB using SSI rules. Complete all sections of the MC 176-2A QMB/SLMB/QI (first Section II, then III, and Section I last).

  • If the ineligible spouse's income is less than or equal to the Standard SSI Allocation, after allocating to children, exempt it and use the QMB/SLMB income limit for one.
  • If the ineligible spouse's income is more than the Standard SSI Allocation, after allocating to children, count it and use the QMB/SLMB income limit for two.

If not eligible for QMB or SLMB using the SSI rules, determine QI-1 using the MC 176-1 QMB/SLMB/QI and/or MC 176-2A QMB/SLMB/QI. If over, STOP. Not QMB/SLMB/QI eligible.
SSI/SSP Recipient 

Consider each SSI/SSP person to be in his/her own MFBU. Verify net nonexempt income using the Title XVI-SSI/SSP Information Screen [INQX] when available, or other verification.

SSI/SSP is exempt.

  • If countable income is less than or equal to QMB income limit for one, QMB eligible.
  • If over the QMB income limit, ineligible.

Note: SSI/SSP recipients are NOT eligible for SLMB/QI.

Related Topics

Medicare Savings Programs (MSP)

Qualified Medicare Beneficiary (QMB) Program

Qualifying Individual (QI-1) Program

Specified Low-Income Medicare Beneficiary (SLMB) Program