317:35-5-42(b)(8)(A)

This policy applies when the client and client’s spouse (if married) live in another person’s household and is/are provided with both food and shelter for at least a full calendar month. It’s still a full calendar even if the client is temporarily out of the home, like a short hospital stay or visiting a relative out of town.

The One Third Reduction Rule doesn’t apply when:

• The property considered to be “home” is owned in part or in whole (or in a life estate) by the client, the client’s spouse or a person from whom income is deemed
• The person responsible for paying any part of the rent for the home is the client, the client’s spouse, or a person from whom income is deemed.
• The client pays a pro rata share of the shelter costs (416.1133)
  • The pro rata share of costs is calculated by
    • Calculating an average of 12 months of all household costs such as food, rent, or mortgage, property tax, water, electricity, etc.
    • Divide the average annual shelter cost by the total number of household members (minors and adults)
• The client lives in a non-institutional care setting. This includes:
  • Placed there by a public or private agency under a program such as foster care
  • The public or private agency that placed the client is responsible for the client’s care
  • The client lives in a private household that is licensed or approved by the placing agency to provide care
  • The client’s care is paid for by the client, another person, or a public agency
• ALL members of the household are on public assistance such as:
  • Supplemental Security Income (SSI)
  • State Supplemental Payment (SSP)
  • Temporary Assistance for Needy Families (TANF)
  • Refugee cash assistance
  • Assistance under the Disaster Relief and Emergency Assistance Act
  • Bureau of Indian Affairs (BIA) general assistance
  • Needs based assistance from state or local government
  • Needs based assistance from the Veterans Affairs (VA)

When the One Third Rule applies, the actual cost of the food and shelter doesn’t matter. One-third of the Federal Benefit Rate (see Appendix C-1, Schedule VIII.C) is counted as income towards eligibility.

If SSI applies the One Third Rule to their benefit, it should be applied to DHS ABD-related benefits. The SDX will show the 1/3 reduction for the current year. If SDX does not show the 1/3 reduction but worker determine the client is living in the household someone’s who is providing both food and shelter, the worker should make sure SSI knows and adjust the SSI benefit using policy and procedure described in article ABD: Income – Adjusting SSI for New or Increased Income.

Example 1

Robert Williams applies for disability related benefits on 01/23/2020. He is asking for help with a medical bill from 10/2019. He reports no resources and his current income is RSDI and SSI. His RSDI started in the middle of 2020. Last year, he lived with his brother who provided food and shelter. He was able to move into his own apartment in January 2020, where he pays all the bills and for all the food. SDX shows SSI applied the One Third Rule in 2019 but hasn’t in 2020, which supports what the client is reporting.

Countable income for: $803

Oct-Dec, 2019: $775 (RSDI) + $240.33 = $1015.33 which is under the 2019 QMBP standard of $1041.

Jan, 2020- forward: $787 (RSDI) + $16 (SSI) = $803 which is under the SSP standard of $824.

FACS Coding

Oct-Dec

Jan-Forward

Example 2

James Robertson has applied for assistance. He is 67, receiving $880 in RSDI and in on Medicare. Due to medical debts, he moved in with his girlfriend last month. She is paying for all the food, rent and utilities.

The current Federal Benefit Rate is $841. $841/3 = $280.33

He will live with her for an entire calendar month and she will pay all food and shelter costs so the One Third Rule applies.

$880 + $280 = $1160 so eligible for SLMB

Example 3

Olive Stubblefield is on ADvantage. Her income is $1750 of RSDI and a $550 pension from her decreased husband. She had to move in with her son James Robertson and his family. Her son insists on paying all the food and shelter costs himself. Because she lives in her son’s home and he is paying for all the food, mortgage and utilities, the one-third rule now applies to Olive. Her countable income is now:

$1750(RSDI) + $550(pension) + $280 (1/3 of federal benefit rate) = $2580.

This makes her over the income standard shown on Appendix C-1 Schedule VIII.B.1 but under the maximum to establish a Medicaid Income Pension Trust (MIPT). She will need to establish a MIPT and deposit $57 a month ($2580 – $2523) into it to be eligible for ADvantage.