[Code of Federal Regulations]
[Title 20, Volume 2]
[Revised as of April 1, 2006]
From the U.S. Government Printing Office via GPO Access
[CITE: 20CFR418]

[Page 1187-1188]
 
                      TITLE 20--EMPLOYEES' BENEFITS
 
               CHAPTER III--SOCIAL SECURITY ADMINISTRATION
 
PART 418_MEDICARE SUBSIDIES--Table of Contents
 
                   Subpart D_Medicare Part D Subsidies
 
Sec.  418.3325  What earned income do we not count?

    (a) While we must know the source and amount of all of your earned 
income, we do not count all of it to determine your subsidy eligibility 
and whether you should receive a full or partial subsidy. We apply these 
income exclusions in the order listed in paragraph (b) of this section 
to your income. We never reduce your earned income below zero or apply 
any unused earned income exclusion to unearned income.
    (b) For the year or partial year that we are determining your 
eligibility for the subsidy, we do not count as earned income:
    (1) Any refund of Federal income taxes you or your living-with 
spouse receive under section 32 of the Internal Revenue Code (relating 
to the earned income tax credit) and payment you receive from an 
employer under section 3507 of the Internal Revenue Code (relating to 
advance payments of earned income tax credit);
    (2) Earned income which is received infrequently or irregularly as 
explained in Sec.  416.1112(c)(2) of this chapter;
    (3) Any portion of the $20 per month exclusion described in Sec.  
416.1124(c)(12) of this chapter which has not been excluded from your 
combined unearned income (or the combined unearned income of you and 
your living-with spouse);
    (4) $65 per month of your earned income (or the combined earned 
income you and your living-with spouse receive in that same year);
    (5) Earned income you use to pay impairment-related work expenses 
described in Sec.  416.976 of this chapter, if you are receiving a 
social security disability insurance benefit, your disabling 
condition(s) does not include blindness and you are under age 65. We 
consider that you attain age 65 on the day before your 65th birthday. In 
lieu of determining the actual amount of these expenses, we will assume 
that the value of these work expenses is equal to a standard percentage 
of your total earned income per month if you tell us that you have 
impairment-related work expenses. The amount we exclude will be equal to 
the average percentage of gross earnings excluded for SSI recipients who 
have such expenses. Initially, the exclusion for impairment-related work 
expenses will be 16.3 percent of the gross earnings. We may adjust the 
percentages if the average percentage of gross earnings excluded for 
supplemental security income (SSI) recipients changes. If we make such a 
change we will publish a notice in the Federal Register. If excluding 
impairment-related work expenses greater than the standard percentage of 
your earned income would affect your eligibility or subsidy amount, you 
may establish that your actual expenses are greater than the standard 
percentage of your total earned income. You may do so by contacting us 
and providing evidence of your actual expenses. The exclusion of 
impairment-related work expenses also applies to the earnings of your 
living-with spouse if he or she is receiving a social security 
disability insurance benefit, the disabling condition(s) does not 
include blindness and he or she is under age 65;
    (6) One-half of your remaining earned income (or combined earned 
income of you and your living-with spouse); and
    (7) Earned income as described in Sec.  416.1112(c)(8) of this 
chapter that you use to meet any expenses reasonably attributable to the 
earning of the income if you receive a social security disability 
insurance benefit based on blindness and you are under age 65. We 
consider that you attain age 65 on the day before your 65th birthday. In 
lieu of determining the actual amount of these expenses, we will assume 
that the value of these expenses is equal to a standard percentage of 
your total earned income per month. The amount we exclude will be equal 
to the average percentage of gross earnings excluded for SSI recipients 
who have such expenses. Initially, the exclusion for blind work expenses 
will be 25 percent

[[Page 1188]]

of the gross earnings. We may adjust the percentages if the average 
percentage of gross earnings excluded for SSI recipients changes. If we 
make such a change we will publish a notice in the Federal Register. If 
excluding work expenses greater than the standard percentage of your 
earned income would affect your eligibility or subsidy amount, you may 
establish that your actual expenses are greater than the standard 
percentage of your earned income. You may do so by contacting us and 
providing evidence of your actual expenses. The exclusion of work 
expenses also applies to the earnings of your living-with spouse if he 
or she receives a social security disability insurance benefit based on 
blindness and is under age 65.