The SNAP/food stamp rules count most unearned income in calculating your benefits. 106 C.M.R. § 363.220(B). In calculating countable income, uneared income does not receive the 20% earned income disregard.
Unearned income includes
- Cash assistance from the TAFDC, EAEDC (Emergency Aid for Elders, Disabled and Children), Social Security and SSI (Supplemental Security Income) programs. 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/food stamp 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 Who cannot be a separate food stamp/SNAP household?
- Income from trusts, alimony and child support payments paid directly to you. Child support payments made to TAFDC recipients that are supposed to be assigned to the Department of Revenue (DOR) are not countable even if 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 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 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/food stamp 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/food stamp 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
- If you are the primary tenant of an apartment and receive rental income from other tenants, 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/food stamp 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/food stamp 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/food stamp 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
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/food stamps. DTA Transitions (Apr. 2007)
- Social Security received by household for child residing in institution is not countable if money used for the care and maintenance of the institutionalized child. DTA Transitions (June 2000)
Produced by Patricia Baker, Laura Gallant, Deborah Harris, Rochelle Hahn Massachusetts Law Reform Institute Last updated January 2011
