Home » 2012 Food Stamp/ SNAP Advocacy Guide » SNAP Part III -- Financial eligibility

47. What is unearned income?

The SNAP rules count most unearned income in calculating your benefits. 106 C.M.R. § 363.220(B). In calculating the amount of benefits, unearned income does not receive the 20% earned income disregard.

Unearned income includes

  • Cash assistance from TAFDC, EAEDC (Emergency Aid for Elders, Disabled and Children), Social Security and SSI (Supplemental Security Income). 106 C.M.R. § 363.220(B)(1).
  • Cash benefits based on past earnings or service, including Unemployment Insurance, Workers Compensation, state and federal Veteran's benefits, and other pension benefits. 106 C.M.R. § 363.220(B)(2). Even though some income sources are based on your past earnings record, they are treated as unearned income because you are not working at the time you receive them.
  • Cash entitled benefits diverted to a landlord or other third party for vendor payments. 106 C.M.R. § 363.220(C)(2), (C)(3).
  • Foster care payments received for an individual included in the SNAP household. These payments are not countable if you opt out this individual from the household. 106 C.M.R. §§ 361.240(F), 363.220(B)(2). See Question 17 (Who cannot be a separate SNAP household?).
  • Income from trusts, alimony and child support payments paid directly to you. Child support payments made to TAFDC recipients that must be assigned to the Department of Revenue (DOR) are not countable, even if erroneously received by the TAFDC household. 106 C.M.R. § 363.220(B)(3), (C)(6).
  • Interest payments, dividends, royalties paid from your assets, or other direct money payments. 106 C.M.R. § 363.220(B)(4). These monies still count as income, even though the assets themselves do not count.
  • State and private post-secondary educational loans, grants, scholarships that can be used for current living expenses (all federal educational monies are non-countable). 106 C.M.R. § 363.230(D). See Question 44 (What income is not counted?). State or private funded work-study is countable earned income (to the extent it is available for living expenses). 106 C.M.R. § 363.220(A)(3).
  • Cash assistance income deducted from the grant of a TAFDC, EAEDC or SSI household member who has been sanctioned or has an overpayment because of an intentional failure to comply with requirements of these programs. See Question 49 (Do the food stamp/SNAP rules count money I don't receive?).

Rental income

The net amount of income you receive after the costs of home ownership or lease of a building is countable unearned income. It is earned income only if you spend more than 20 hours a week managing property. 106 C.M.R. § 365.930(A).

Home ownership costs include what you pay on a mortgage (principal and interest), home owner insurance, water and sewer charges, repairs, etc. 106 C.M.R. § 363.220(B)(5). If you own your home and rent out a room or apartment, you can deduct a pro rata share of the mortgage and home ownership costs from the rental income. The rest will be counted as unearned income.

Example: Jane Smith rents out two units in her triple decker house, and each tenant pays for their own utilities. Jane lives in the third unit. She receives $500 a month for each unit. She pays $1,200 a month to the bank for mortgage, interest and insurance on the entire building. Jane also pays an average of $90 a month in repairs and other expenses. Jane can deduct two-thirds of the monthly expenses from her rental income (for the two units she rents) to determine the countable rental income for SNAP purposes. She has only $170 in countable rental income and not $1,000.
Income (rent paid) from Jane's two rental units = $1,000
2/3 of Jane's home ownership costs
(deduct the costs of 2 of the 3 units, or 2/3 of $1,290) =		 $830
Countable rental income for Jane ($1000 less $830) = $170

Note: In this example, when Jane applies for SNAP benefits, she has only $170 in rental income. She can claim her one-third of shelter costs for her shelter expenses (or $415) and not the full amount of the mortgage and other costs.

Advocacy Reminders

  • DTA can use government data bases, like the State Verification and Exchange System (SVES) to verify a number of income sources including Social Security, Supplemental Security Income, Unemployment Insurance and child support that is collected and paid to a family through the Department of Revenue (DOR). Where SVES is available to verify these income sources, you need not produce a written statement to DTA of the benefit or child support amount.
  • If you are the primary tenant of an apartment and receive rental income from other tenants that live with you, you can deduct part of the rental costs from the rental income you receive. However, sometimes it is better and easier for each tenant to pay the landlord directly, or to simply show DTA that each sub-tenant is paying his or her share which you then pay to the landowner. This can avoid errors in SNAP calculations and erroneous counting of income when you are merely passing through rental income to the landowner.
  • Current DTA regulations, 106 C.M.R. § 365.950(A), state that the principal paid on a real estate mortgage is not an allowable business expense. This regulation conflicts with the federal SNAP regulations, 7 C.F.R. § 273.11(b)(1). Business expenses include the mortgage, principal, taxes, insurance and other carrying charges.
  • Anything that is not expressly excluded as non-countable income under the SNAP regulations is generally treated as countable earned or unearned income. Always be sure to report to DTA any source of income, even if you think it is non-countable.
Additional Policy Guidance on Unearned Income
  • Payments from a "reverse mortgage" (where homeowner draws money out of equity from home) is a loan and non-countable as income for SNAP. Transitions Hotline Q&A (Apr. 2007).
  • Social Security received by household for child residing in institution is not countable if money is used for the care and maintenance of the institutionalized child. Transitions Hotline Q&A (June 2000).