E-8100, General Information

Body

Revision 26-1; Effective March 1, 2026

In-kind support and maintenance (ISM) is a form of unearned income. Federal requirements mandate that ISM, along with other types of unearned income, be considered when determining Medicaid eligibility.

Note: Food is not included in ISM calculations. Food is considered when determining which rule to use when assessing shelter assistance as follows:

  • Follow the one-third reduction rule if both food and shelter are provided in another person’s household.
  • Follow the presumed maximum value (PMV) rule If only shelter is provided, or food is provided outside the household. 

Do not consider ISM in budgeting for Medicaid Buy-In for Children (MBIC).

Related Policy

Budget Reference Chart, Appendix XXXI

E-8110 One-Third Reduction Rule

Revision 26-1; Effective March 1, 2026

Reference: Appendix XIV, Chart A

Use the One-Third Reduction Rule instead of calculating the actual dollar value of in-kind support and maintenance (ISM). 

Count one-third of the federal benefit rate (FBR) as unearned income if a person, or a person and the person's eligible spouse:

  • lives in another person's household for a full calendar month, except for temporary absences; 
  • receives shelter from others living in the household; and
  • others within the household pay for or provide all their meals.

Example: Bess Black lives in her son's home. There are no other household members. Monthly household expenses total $650 ($325 pro rata share). Mrs. Black contributes nothing toward household expenses. Count one-third of the FBR as ISM.

This rule applies in full or not at all. Do not apply any income exclusions to the reduction amount, if it applies. However, apply appropriate exclusions to any other earned or unearned income received.

Do not count any other ISM received, when the one-third reduction rule applies.

E-8120 Presumed Maximum Value Rule

Revision 26-1; Effective March 1, 2026

Use the Presumed Maximum Value (PMV) Rule, if a person receives ISM and the one-third reduction rule does not apply.

Instead of determining the actual dollar value of any shelter a person receives, presume it is worth a maximum value:

  • One-third of the federal benefit rate (FBR)
  • Plus the general income exclusion ($20)

Note: Food is no longer included in ISM calculations. It must still be considered to determine which rule to apply.

A person may show that the value of the shelter received is less than the presumed maximum value. Do not use the PMV Rule if the person demonstrates either of the following: 

  • the current market value of any shelter received, minus any payment made, is less than the presumed maximum value; or
  • the actual amount paid by someone else is less than the presumed maximum value.

Use the PMV amount as unearned income if:

  • the person chooses not to question the presumed value; or
  • the presumed value is less than the actual value of the shelter the person receives.

Use the actual value of the shelter received if the person shows it is less than the presumed maximum value.

Note: A religious order has an express obligation to provide full support and maintenance for members who have taken a vow of poverty. In such cases, ISM must be developed using the PMV Rule. The income turned over by the member to the order is considered to fulfill the vow of poverty and is not treated as a contribution toward the food and shelter received.

E-8121 Community Attendant Services

Revision 26-1; Effective March 1, 2026

Use the Presumed Maximum Value (PMV) Rule: count 1/3 FBR + $20 as unearned income if a person is:

  • applying for or receiving Community Attendant Services (CAS); and 
  • receives in-kind support and maintenance.

If the person is income-eligible, no further development is required. If applying the PMV results in ineligibility, the person must:

  • be given an opportunity to rebut; and 
  • show that the actual value of the shelter received is less than the presumed maximum. 

Example: Jim Morgan, a CAS applicant, lives in his sister’s household, which includes her husband and child. He does not pay his pro rata share of household expenses. Count 1/3 FBR + $20 as ISM. If he is income-eligible, no further development is necessary. If this results in ineligibility, Mr. Morgan must be given an opportunity to rebut and show that the actual value is less. Monthly household expenses total $1,050 (pro rata share: $262.50). Mr. Morgan contributes $200 per month toward general household expenses. The actual value is $62.50 ($262.50-$200).

Note: No support and maintenance (S/M) for Home and Community-Based Services waivers.

E-8130 Support and Maintenance (S/M) Items

Revision 26-1; Effective March 1, 2026

What Is S/M?

  • Electricity
  • Garbage removal
  • Gas
  • Heating fuel such as, coal, wood and butane
  • Sewer
  • Mortgage 
  • Property insurance required by mortgage holder
  • Real property taxes, less any tax rebate credit
  • Rent
  • Sewer
  • Shelter or room
  • Water

What Is Not S/M?

  • Cable TV
  • Credit card bills
  • Food and board
  • General upkeep on home
  • Lawn maintenance
  • Life insurance premiums
  • Medical care
  • Paint for the house
  • Phone bill, including basic service plus extra services and long distance
  • Repair of roof and plumbing
  • Transportation
  • VA clothing allowance for medical reasons
  • Value of Supplemental Nutrition Assistance Program (SNAP) food benefits

E-8140 Exceptions to Counting Support and Maintenance (S/M) Income

Revision 26-1; Effective March 1, 2026

The general rule is to count S/M when a person receives shelter without payment, no matter who is liable for the cost. 

There are many exceptions to the general rule. The shelter received is not counted as S/M when an exception applies. Some exceptions are based on federal law which specifically exclude the value of certain types of shelter from income. Other exceptions are due to when shelter received does not meet the definition of income under federal regulations.

Do not count S/M if the person receives one of the following shelter assistance that:

  • Is specifically excluded by federal law, such as the Disaster Relief and Emergency Assistance Act. Refer to E-2000, Exempt Income.
  • Meets the criteria for infrequent or irregular unearned income. Refer to E-9000, Infrequent or Irregular Income.
  • Has no current market value.
  • Is given under a governmental medical or social service program. E-1700, Things That Are Not Income.
  • Is need-based assistance from a state or local government. Refer to E-2000, Exempt Income.
  • Is given by someone in the same household whose income is subject to deeming.
  • Is received at school by a child under 22 who is temporarily absent from the parental household. 
  • Is received during a temporary absence.
  • Is a replacement of a lost, damaged or stolen resource including temporary housing. Refer to E-1740, Miscellaneous Things That May Not Be Income, and E-2000, Exempt Income.
  • Is excluded under an approved plan for self-support.
  • Is received due to credit life or credit disability policy payments. Refer to E-1740. 
  • Is received during medical confinement in an institution.

Support and maintenance is not included as income in the eligibility budget if the person is either:

  • In an institutional setting and eligibility is being tested for a Home and Community-Based Services waiver program Note: Community Attendant Services is not a Home and Community-Based Services waiver program.
  • In an institutional setting for the month but entered after the first of the month.

Example: Mr. John Bono lives in his own home. His daughter pays his garbage removal bill quarterly, totaling no more than $20. This meets the definition of infrequent or irregular income. It is not counted in the eligibility budget.

Support and maintenance is not included if the person:

  • lives with a deemor such as an ineligible spouse or parent and there are no non-deemors in the household;
  • lives in a commercial room-and-board establishment;
  • is placed in personal care, adult foster care or supervised living by a public agency, such as Adult Protective Services (APS) or HHSC; or
  • pays their pro-rata share of all household expenses.

Example: Alice Beckman lives with her son in his home. Monthly household expenses total $350 ($175 pro rata share). Ms. Beckman contributes $185 per month toward general household expenses. There is no S/M because Ms. Beckman pays more than her pro rata share of general household expenses.

Support and maintenance is not included if the person:

  • lives in a public assistance household, defined as a household where at least one other household member receives cash, vendor payments, or assistance from one of the following:
    • Supplemental Nutrition Assistance Program (SNAP)
    • Temporary Assistance for Needy Families (TANF);
    • Supplemental Security Income (SSI);
    • Refugee Assistance Act of 1980;
    • Bureau of Indian Affairs (BIA) general assistance;
    • State or local government income maintenance programs;  
    • Veterans Affairs (VA) pension for veterans or widows;
    • VA dependency and indemnity compensation (DIC) for parents; or
    • Disaster Relief Act of 1974; or
  • receives free use of land where their shelter is located, or free use of shelter situated on land they own.

Example: Marcie Bennett lives in her own mobile home on land owned by her daughter.  She pays all food and utility expenses. No S/M applies because the use of land alone is not a shelter cost.

Example: Janet Smith lives in a mobile home owned by her daughter, on a lot Janet owns. Her daughter does not charge rent. There is no S/M because the use of shelter alone, but not the land, is not a shelter cost.

E-8150 Food, Clothing or Shelter as Wages

Revision 09-4; Effective December 1, 2009

If a person receives food, clothing or shelter that constitutes wages or remuneration for work, this is earned income valued at its current market value (CMV) or current market rental value (CMRV).

In this situation, the principles of S/M do not apply; however, the earned income exclusions of $65 and one-half the remainder do apply, unless eligibility is being determined under the institutional income limit.

Example: Joe Ball works as an apartment manager. His employer pays him $300 per month in cash wages and provides a free room, which has a monthly rental value of $200. Because provision of the room by Mr. Ball's employer constitutes wages, Mr. Ball receives $500 in earned income each month. This in-kind earned income in the form of shelter is valued at its CMRV ($200), and the one-third reduction rule and the one-third reduction + $20 rule do not apply. The earned income exclusions of $65 and one-half the remainder apply to Mr. Ball's total earnings of $500 ($300 cash wages + $200 free room), unless eligibility is being determined under the institutional income limit.

E-8160 Living Arrangement

Revision 09-4; Effective December 1, 2009

Use a person’s living arrangement to determine if S/M is being received and whether the S/M is to be valued under the one-third reduction rule or under the one-third reduction + $20 rule. Some common living arrangements are:

  • noninstitutional care;
  • home ownership;
  • rental liability, including flat fee for room and board;
  • public assistance (PA) households (that is, presumed sharing);
  • separate consumption;
  • separate purchase of food;
  • sharing;
  • earmarked sharing; and
  • home of another.