Dividends and Interest

Dividends and Interest. A. This type of income is defined as follows: 1. Dividends and interest are returns on capital investments such as stocks, bond or savings accounts. a) Account service fees or penalties for early withdrawal do not reduce the amount of interest or dividend income. B. This type of income is treated as follows: 1. Count dividends or interest as income or excluded income based on the following criteria: a) When the source of the dividends or interest is a countable resource, the dividends or interest generated is excluded income for programs with an asset test. 1) The Medicare Cost Sharing programs (QMB, SLMB, and QI) do not have an asset test so the exclusion does not apply to them. b) When the source of the dividends or interest is a resource which is excluded under federal statute, the dividends or interest generated is excluded income. 1) Examples are: Agent Orange payments, Austrian Social Insurance payments, Japanese-American and Aleutian Restitution payments, Radiation Exposure Compensation Trust Fund payments, Ricky Ray Hemophilia Relief funds, payments to Veterans’ Children with Certain Birth Defects, etc. c) When the source of the dividends or interest is a resource excluded by the Social Security Act, dividends or interest generated on the excluded resource may or may not be excluded. Treatment is specific to the excluded resource. 1) Examples are: burial funds and burial spaces, relocation assistance, PASS funds, gifts to children with life-threatening diseases, victim’s compensation, grants, scholarships, fellowships and gifts, etc. d) Under liberalized income policy, interest, dividend and royalty income or any combination that does not exceed $5 per month per individual is excluded.