Exempt income is not included in the income eligibility calculation. Once identified and documented, caseworkers will not be required to monitor exempt income at subsequent financial redeterminations. Sources of exempt income include:

1. (1) interest income;
2. (2) cash received from the sale of a resource is a resource, not income;
3. (3) income of minor children who are supported by or dependent upon the client;
4. (4) refunds from the Internal Revenue Service for earned income tax credit;
5. (5) reimbursement from an insurance company for health insurance claims;

6. (6) any cash from a non-governmental medical or social services organization if the cash is:

   1. (A) for medical or social services already received by the applicant or client and approved by the organization, and which does not exceed the value of those services; or
   2. (B) a payment restricted to the future purchase of a medical or social service;

7. (7) proceeds of either a commercial loan or an informal loan, for which repayment is required with or without interest:

   1. (A) the amount borrowed is not counted as income in the month in which it is received, but is considered to be a resource in the following months; and
   2. (B) to claim exemption of the proceeds of a loan, an applicant or client must prove that they acknowledge an obligation to repay and that a plan for repayment exists; if these conditions can be verified, no written contract is required;
8. (8) the amount of the cost-of-living increase in any pension or benefit, received on or after January 1, 1985, that would cause the client to be ineligible for continued community care services or programs. This exclusion applies only to clients who are already receiving community care services or programs, or case management, and would become ineligible because of the increase; it does not apply to applicants;
9. (9) in-kind income, such as food, clothing, shelter, rent subsidies;
10. (10) one-time or lump-sum payments from any source;
11. (11) payments from the Agent Orange Settlement Fund or any other fund established in settlement of the Agent Orange product liability litigation, as Public Law 101-239 exempts the payments from countable income and resources; the law is retroactive as of January 1, 1989;
12. (12) any payment received under the Radiation Exposure Compensation Act (Public Law 101-246);
13. (13) any payment received under the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970;

14. (14) payments to volunteers under the Domestic Volunteer Services Act, this exclusion applies to:

    1. (A) any payments to volunteers in the Retired Senior Volunteer Program, Foster Grandparent Program, and the Senior Companion Program; and
    2. (B) payments under Title III of the same act, which includes the Service Corps of Retired Executives (SCORE), the Active Corps of Executives (ACE), and the Action Cooperative Volunteer Program (ACV);
15. (15) interest or other earnings on any designated account established for Supplemental Security Income (SSI) clients under 18 years of age for retroactive benefits, as required by Public Law 104-193, effective August 22, 1996;
16. (16) payments by the Federal Disaster Assistance Administration authorized by the Disaster Relief Act, as amended;
17. (17) value of any housing assistance paid on a house under the United States Housing Act of 1937, the National Housing Act, the Housing and Urban Development Act of 1965, §101, or Title V of the Housing Act of 1949, as authorized by Public Law 94-375;
18. (18) home energy assistance, except food or clothing, under Public Laws 97-377 and 97-424 is assistance in cash or in-kind that is provided by a private, nonprofit organization or a utility company, and examples include heating, cooling, weatherization, storm windows, and blankets;
19. (19) reparation payments received by Holocaust survivors from the Federal Republic of Germany made periodically or as a lump sum, and HHSC accepts the applicant's or client's signed statement of amounts involved and dates of payment; Public Law 101-508 established this exemption effective January 1, 1991;
20. (20) payments from a state-administered fund to aid victims of crime; Public Law 101-508 established this exemption effective May 1, 1991;
21. (21) payments a state or local government may make as relocation assistance; Public Law 101-508 established this exemption effective October 15, 1990;
22. (22) hazardous duty pay of a spouse or parent absent from the home because of active military service;
23. (23) restitution payments made by the United States government under Public Law 100-383 to Japanese-Americans or, to the Japanese-Americans' survivors, who were interned or relocated during World War II;
24. (24) reparation payments received under §§500-506 of the Austrian General Social Insurance Act;
25. (25) payments under the Netherlands' Act on Benefits for Victims of Persecution Wet Uitkering Vervolgingsslachtoffers (WUV) 1940-1945; or
26. (26) payment from any source made to an applicant or a client because of the applicant's or client's status as victims of Nazi persecution; Public Law 103-286 established this exemption effective August 1, 1994.

Source Note:The provisions of this §271.59 adopted to be effective January 1, 1998, 22 TexReg 12544; transferred effective September 15, 2023, as published in the August 18, 2023, issue of the Texas Register, 48 TexReg 4523; amended to be effective September 10, 2025, 50 TexReg 5936.