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OSIP Program Manual

E. Financial Requirements

Updated 3/1/21

1. Overview of Assets

For OSIP(M) treat assets as follows unless otherwise specified in other administrative rules. An asset is either counted as income, counted as an asset, or excluded from consideration. To be excluded the income or asset must be specifically identified and appear in the section of specific assets. Financial eligibility will be determined by counting all non-exempt assets. Assets counted as income cannot be counted as asset in the same month. Assets listed in 461-140-0020 and 461-140-0040 do not affect the benefit group’s eligibility or benefit level.


For information on the availability of assets, periodic and lump sum income see Counting Client Assets

Treatment of Excluded Assets. In order to be excluded, assets must be identifiable, but this does not mean that they have to be physically apart from other assets.

2. Income Standards

Use of the payment standards to establish need. Need is the amount at the Department's payment standards that represents the client's need for items covered by the benefit. Special needs are costs in addition to standard allowances.


For an OSIPM applicant or recipient who is receiving or applying for services or who is an acute care setting, and who would otherwise not qualify for OSIPM in a standard living arrangement, the countable income limit is 300% of the full SSI standard for a single individual. Other OSIPM cases do not have a countable income limit.

This standard in this section is used as the adjusted income limit. To be eligible for OSIPM, the individual and the individual's financial group must have income below the standards below.

OSIPM Adjusted Income Standards


One Person in Need Group

Two People in Need Group


794.00 1,191.00

For OSIPM (except OSIPM-EPD) clients in a nursing facility or an ICF-IID, the following amounts are allowed for clothing and personal incidentals:

Standards: 461-155-0250

Room and Board and Personal Needs Standards. For all OSIPM cases in waivered community-based care facilities the room & board standard is $617.

The PIF will vary depending on the individual’s type of income and amount. Special needs and other cash payments can also impact the amount a client has to meet their monthly needs. The basic PIF is $177.00.

The room and board payment is required for clients residing in a community based care facility (see 411-027-0025).

Click here for the rate schedule for Residential Care Facilities, Adult Foster Homes, Assisted Living Facilities, and In-Home Service Programs


Adjusted Income Standard for OSIPM-EPD. The standard is $2,684 per month. EPD clients with countable earned income below $5,453 will meet the adjusted income requirements for the EPD program.


Adjusted Income Standard for Behavioral Health Services. The income standard is 150% of the FPL, currently $1,610. The individual's adjusted ncome must be at or below that standard. All individuals should be evaluated for all other OSIPM categories first, except OSIPM for individuals in a nonstandard living arrangement and OSIPM-ACS.


3. Use of Income

For information on periodic and lump sum income policy see Counting Client Assets A.

OSIPM (except EPD) Long-Term Care, home and community-based care. The amount DHS pays for the service payment is reduced by the amount of the client liability. All clients who live in or enter a long-term care setting or who receive home and community-based care, must, in order to remain eligible, make the payment required as follows:

Clients whose countable income exceeds the countable income standard are not eligible unless they have established an income cap trust.


Availability of income Couple with an institutionalized spouse. This section applies to an institutionalized spouse who began a continuous period of care on or after October 1, 1989. Determine the ownership of income from property that belongs to the institutionalized or community spouse as follows, unless legal documents specifically provide otherwise:

4. Determining Adjusted Income and Client Liability

Individuals who live in the community with no children in the HH dot Individuals who live in the community with children in the HH dot Individuals who receive home and community-based care or nursing facility care EPD recipients

Determine adjusted income as follows:

Individuals who live in the community with no children in the HH (not EPD), including individuals residing in behavioral health care settings.

For the purposes of this section:

The following deductions are used for applicants who:

Single Individual

If the individual has no spouse in the household group, deductions from the individual's countable income are made in the following order:

If the individual's adjusted income is below the applicable OSIPM income limit for a need group of one, the individual meets the OSIPM income requirements.

Individual Married to a Spouse Who Is Eligible to Receive SSI or TANF

If the applicant is married to a spouse who is eligible to receive SSI or TANF, then they are in the same financial group, and deductions from the couple's countable income are made in the following order:

If the couple's adjusted income is below the two-person OSIPM income standard, the individual meets the OSIPM income requirements.

Individual Married to an Ineligible Spouse

If the applicant is married to an ineligible spouse who is in the HH group, he or she must first be financially eligible as an individual. Compare the adjusted income of the applicant (using the deductions for single individuals above) to the one-person OSIPM income standard. If the applicant is over the one-person standard, the applicant is financially ineligible and you don't need to go further. If the adjusted income of the applicant is less than the one-person standard, then proceed as follows:


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Individuals who live in the community with children in the HH (not EPD).

Individuals who receive home and community-based care or nursing facility care (not EPD). Allow deductions in the order below for individuals who are SSI eligible and reside in or are entering a long-term care facility OR receive home and community-based care. These deductions also apply to individuals that receive services under a DD waiver. Individual liability requirements are outlined below.

Note: SSI recipients do not have a liability; however, when an SSI recipient enters a nursing facility, workers should complete the SDS 538A and send it to the Social Security Administration.

Deduct one standard earned income deduction of $65 of the earned income for AB, AD and OAA

Allow deductions under the plan for self-support allowed by 461-145-0405.

Deduct one of the following need standards:

Community spouse allowance. A community spouse monthly income allowance is deducted from the income of the institutionalized spouse to the extent that the income is made available to or for the benefit of the community spouse, using the following calculation.

Dependent income allowance. Deduct a dependent income allowance for each eligible dependent as follows:

Costs for maintaining a home if the individual is in a nursing facility and meets the criteria per rule 461-160-0630. This is coded as an Other Incurred Medical on the Medical Costs tab in Oregon ACCESS and will integrate over as an OIM. If you receive the 23029 N/R amount not within acceptable range error message, just bypass it. The amount allowed is the individual's total housing costs, including taxes and insurance, plus the SNAP Limited Utility Allowance (LUA).

Allow medical costs per 461-160-0030 and 461-160-0055 that are not covered under the state plan.

The balance is the adjusted income.

The individual liability is determined as follows (except EPD):

Individuals who live in or enter a long-term care setting or who receive home and community-based care, must make their liability payment, except as provided below. These individuals must apply their adjusted income to the cost of their care or service. If their adjusted income exceeds their cost of care or service, they must pay the full cost of care but have no additional liability. Individuals residing in a behavioral health care setting are not required to pay a liability.

Individuals who receive SSI, or are deemed eligible to receive SSI under section 1619(b), are eligible without having to make a payment.

The IC service payment of individuals is reduced by the amount of their liability.

The following individuals are exempt from liability payments if they receive home and community based services:

An individual residing in an acute care hospital is exempt from payments required by this rule while residing in the acute care hospital. If a service benefit was received prior to admission to the acute care hospital, payment must be made for that service.

Click here for more information on the pay-in system.

Client liability requirements: 461-160-0610
Deductions for clients that receive services: 461-160-0620
Notice to eligible institutionalized clients: 461-175-0225

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Determining adjusted income for EPD clients. Do the following:

See OSIP WG.11 for information on calculating adjusted income for EPD and determining the EPD participant fee.


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5. Costs

Costs incurred by the client, that the client has a legal responsibility to pay, are deductible from income in accordance with this policy.

The following costs are not deductible:

A cost is used in the month it is either paid, or expected to be paid (if incurred/billed but not yet paid); however, costs must be reported timely in order to be used. Ongoing costs that are not reported timely are used in the month reported.


6. Medical Costs

Costs are considered incurred when they are billed by the provider. Determine the amounts of the medical expenses to be deducted for purposes of the liability calculation (not eligibility), using one of the following methods:

To be allowed as deduction:

Example 1: Brenda paid a $50 medical bill on April 28th and provided proof on May 3rd. Approve a $50 medical deduction for the month of April.
Example 2: Tyler provided proof of a $100 medical bill he incurred in May and stated he would be paying it in full in June. The deduction was added for June. In July, he provided a bill from the same provider showing $150 in newly incurred costs along with the original $100 as unpaid. Allow only the new $150 deduction.
Example 3: In June, James provides proof of a payment plan for an allowable medical cost. He will be paying $200/month for three months starting July 1st. This amount is more than his liability of $150, but James states the hospital won’t take any less. Code $150/month for three months, July-September.
Example 4: Alice is determined service eligible and certified for March through February of the following year with a liability of $150/month.

  1. At certification on March 8th, Alice provides proof of an allowable medical cost that she charged to a credit card on December 18th. She shows that the original cost was $500, the entire amount was charged to the card, and she has been paying $100 on the first of each month to the card starting in January.

Original cost


Prior payments



Original cost remaining


Deduction coded



March - May

    1. $100/month deduction is allowed for 3 months even though the balance of the credit card may not be paid off due to interest, fees, or other charges.
  1. In April, Alice provides proof of recurring prescription costs of $15/month. Add a separate OIM deduction for the ongoing $15 deduction.
  2. April 20th, Alice provides proof that she charged another $1500 for an allowable medical cost to her credit card along with $300 in non-allowable costs. She intends to continue paying the same $100/month to the card.

Deduction balance


Additional deduction



New deduction balance


Deduction coded



through August of next year

  1. At recertification in February, Alice verifies that her $15/month prescription cost remains and states that she will begin increasing the payments to her credit card next month to $150. Her liability is still $150 so her costs are greater than her liability.

Option 1) Narrate the ongoing prescription costs and code the $150/month until it ends and the $15/month can be added back on.

Deduction balance




New payment amount



Remaining months


March 1st deductions




June 1st deductions



Remaining CC



Ongoing Rx

July 1st deductions



Ongoing Rx

Option 2) Narrate the $150 credit card deduction is being coded as $135 in order to leave the $15 ongoing prescription deduction on the case. The $135 deduction is coded for March-May and the remaining $50 is coded in June. Unused portions of the deduction are not rolled over to be added to June’s deduction.

Deduction balance




New payment amount



Remaining months


March 1st deductions






Ongoing Rx

June 1st deductions



Remaining CC



Ongoing Rx

July 1st deductions



Ongoing Rx


  1. In March, Alice provides proof that she paid off her credit card using her tax returns. The deduction is removed for April and the $15/month deduction for her ongoing prescriptions is the only OIM on the case.

Overview of costs: 461-160-0030

The following medical costs, incurred by the individual, not a spouse or dependent, are deductible (when not covered by Medicaid):

How to use medical costs. For clients who have stable costs, these costs can be anticipated over the determination period. For clients whose costs change monthly, costs must be reported and liability should be adjusted each calendar month. Prescriptions that are consistently filled every 60 or 90 days can be converted to a monthly amount by dividing by 2 or 3, respectively, and applied as an ongoing, anticipated monthly cost until the next annual redetermination, when it should be reviewed.

Example 1: A client may take four name brand and two generic drugs consistently each month. At $5 and $2 co-payments, the amount of $24 can be anticipated until the next annual redetermination and adjusted if the client reports a change in prescriptions.

Example 2: A client may have unstable medical conditions and change prescriptions each month. This client’s costs cannot be anticipated, so the client needs to report costs and the liability requires adjustment monthly.

Example 3: A client pays a $30 co-payment every three months for a 90-day prescription. Convert by dividing $30 by 3 months and applying $10 per month to anticipated costs projected until the next annual redetermination.

Staff should use OIM, OHI and MDC codes on ACCESS/CMS. If a client has both stable and unstable costs, more than one code can be used. The codes are used with the appropriate end date. Once the end date has passed, the deduction will no longer be used in the liability calculation and the liability will increase.

Notice. The SDS 540M, Notice of Planned Action: Medical Costs is used for clients who report medical costs monthly and for clients with anticipated costs over the determination period.

For clients who report costs monthly the same notice can be used for both approving and reducing the client's liability. The notice should be given to the client at the time the cost is verified and allowed.

For clients approved for an ongoing cost, the SDS 540M can be used to approve the cost for a specific period of time.  The notice should be given to the client at the time the cost is verified and allowed.  A separate 540M is required to end the deduction. 

Medicare Part D. There are two categories of Medicare Part D related costs that may be used to reduce the client liability: client premium costs and client prescription co-payments.

Long-term care systems coding.


Pay-In System:

Medical costs that are deductible: 461-160-0055
Calculating client eligibility: 461-160-0620

7. Resource Limits

An individual is not eligible for benefits if the financial group has countable resources above the resource limit. The resource limits are as follows:


Deemed resources (except EPD). When a child is applying who is not assumed eligible, the parental resources are deemed available to the child. The amount deemed available to the child is the amount the parental resources exceed the resource limit (above) of:

Parental resources mean the countable resources of:

If more than one child is applying, the value of the deemed resources is divided evenly between the applying children. If an applying child is determined to be ineligible for OSIPM for any reason, including excess resources resulting from deeming, no resources are deemed to that child. Any resources deemed to an applying child determined to be ineligible for OSIPM are deemed equally to other applying children.

The parental resources are not deemed available to a non-applying child.

The value of the parental resources is subject to deeming whether or not those resources are available to the child.

Excluded Resources for Payments Received Under a Qualified Partnership Policy. When a client in a non-standard living arrangement applies for Medical benefits, the Department excludes as a resource an amount equal to the insurance payments received under a QPP as of the initial month of eligibility.

This exclusion:

8. Excluded Resource; Community Spouse Provision

This applies to an institutionalized spouse who has applied for benefits because he or she is in or will be in a continuous period of care. This also applies to MAGI-based long-term care consumers who might require OSIPM-based long-term care at some point; see OSIP Program Manual WG-2. Whether the couple lives together or not, determine if the couple's assets make the institutionalized spouse eligible or ineligible for OSIPM (not EPD) as follows.

For clients with a court-ordered spousal allowance, the Department may waive the requirement for income to be considered first if the Department determines that the resulting community resource allowance would create an undue hardship on the spouse of the client. These requests should be submitted to Bill Brautigam at 503.378.2202.


If a legally married couple effects a “spend down” by purchasing a Medicaid-compliant annuity, this will have an effect on the monthly maintenance needs allowance (the LDS) that the institutionalized spouse will be able to divert to the community spouse thereafter. This is because OAR 461-160-0620(3)(d)(B) says: “… The countable … income of the community spouse is subtracted from the maintenance needs allowance determined in step 1. The difference is the income allowance …”

Therefore, the best practice, when the spend down has occurred and an annuity purchased, is to go into Oregon ACCESS and enter in the case (not the Resource Assessment), under the Income tab, the community spouse’s new unearned income (making sure, as always, to show that this is the community spouse’s, and not the client’s, income), and to either print or preview and review the APD 0450 form to see how this new information has affected the LDS allowed to the community spouse. Also review to see how it might have affected lower-priority deductions (461-160-0620[3]) from income, such as LDS to dependents, OIMs, and OHIs; and note that it might very well increase the Client Liability, as well. In addition, this new information might require a re-calculation of how to maximize the benefit of the LDS, discussed in OSIP Program Manual WG.6 Deciding to What Extent to Allow the LDS.

If an institutionalized spouse is determined eligible send a basic decision notice to each spouse or each person's authorized representative. Use the SDS 3402.


9. Excluded Resources; EPD

All moneys in an approved account are excluded as an asset during the determination of eligibility.

Only moneys from the client's own earned income, or moneys contributed from an employer based on earnings, may be deposited into an approved account.

Retirement-related approved accounts must be set up in a financial institution and comply with IRS regulations. These accounts are not limited to a maximum amount.

Assets purchased with moneys in an approved account are excluded, provided they meet the requirements of 461-001-0035.

If moneys from the approved account are used for a purpose not consistent with the definition of approved account, the client will be prohibited from utilizing an approved account for the next 12 months for the purposes of the determination of eligibility.


10. Disqualifying Transfer of Assets

Note on MAGI Transfer of Asset Penalties

A MAGI Medicaid recipient applying for LTC on or after October 1, 2014 is evaluated for transfer of asset penalties in the same manner as if they were receiving or applying for OSIPM (see APD-PT-14-030for more information). The following additional guidelines apply to MAGI Medicaid recipients that applied for LTC prior to October 1, 2014:


The financial group members who transfer an asset must do all the following in order to be eligible for benefits:

If a client or the spouse of a client in a nonstandard living arrangement, transfers a asset during the periods of time listed below and if the transfer is made in whole or in part for the purpose of establishing or maintaining eligibility for benefits, the need group is disqualified.


For the purposes of this transfer policy "child" means a natural or adoptive son or daughter who is:

A transfer of an asset by a client or the spouse of the client, in a nonstandard living arrangement, is a disqualifying transfer unless:

Except as provided above for a home, an asset to be considered transferred for fair market value if the follow subsections apply:

If an asset is owned by more than one person, by joint tenancy, tenancy in common, or similar arrangement, the share of asset owned by the client is considered transferred when any action is taken either by the client or any other person that reduces or eliminates the client's control or ownership in the client's share of the asset.

If a transfer is made for less than fair market value is not exempt from disqualification, there is a rebuttable presumption that the asset was transferred for the purpose of establishing or maintaining eligibility.

To rebut the presumption, the client must present evidence other than his or her own statement and must provide to the Department the information it requests for the purpose of evaluating the purpose of the transfer. To meet the burden, it is sufficient for the client to show one of the following:

The fact that a recipient was already eligible for benefits is not sufficient to rebut the presumption because the asset may not always be excluded and if the client had received full compensation for the asset, the compensation received would have been used to determine future eligibility.

Determining if a Transfer of an Asset is Disqualifying: 461-140-0220
Disqualifying Transfer of Assets Including Home: 461-140-0242
Length of Disqualification Due to a Resource Transfer: 461-140-0296

11. Asset Transfer; Look-Back Period

Transfers on or before June 30, 2006.

The following transfers made without compensation equal to or greater than fair market value may be disqualifying:

Transfers on or after July 1, 2006.

A transfer of an asset may be disqualifying if the transfer occurs on or after the date that is 60 months prior to the date of request.


12. Determining the Uncompensated Value of a Transferred Asset

The uncompensated value of a disqualifying transfer of an asset is used in 461-140-0210 through 461-140-0300 to calculate the ineligibility period of the financial group.

To determine uncompensated value in the OSIP and OSIPM programs:

The compensation received for a transferred asset includes encumbrances assumed by the buyer and goods or services provided to the client, limited to their true value, if there was a prior agreement to exchange the asset for the goods or services.


13. Calculating the Disqualification

Divisor. A financial group containing a member disqualified due to the transfer of a asset is disqualified from receiving benefits. The length of a disqualification period resulting from the transfer is the number of months equal to the uncompensated value for the transfer divided by the following dollar amount:


For transfers before July 1, 2006:

For transfers on or after July 1, 2006, and for income cap trusts under 461-145-0540 (9)(c) that accumulate funds in excess of the applicable divisor amount:

For an annuity that is a disqualifying transfer under section (11) of 461-145-0022, the disqualification period is calculated based on the total balance of the payments owing to the annuitant, unless the only requirement that is not met is that the annuity pays beyond the actuarial life expectancy of the annuitant. If the annuity pays beyond the actuarial life expectancy of the annuitant, the disqualification is calculated as outlined below.

If a client or the spouse purchases an annuity on or before December 31, 2005 and the annuity pays benefits beyond the actuarial life expectancy of the annuitant, as determined by the life expectancy tables in WG E.1, a disqualification period is assessed for the value of the annuity beyond the actuarial life expectancy of the annuitant.

A single transfer of an asset may cause a disqualification for both a medical assistance program and the SSI cash grant. The period of the disqualification is likely to be longer for SSI than for the medical assistance program, so a person may be eligible again for the medical assistance program while still disqualified from receiving SSI. The provisions of this rule are applied without regard to the related disqualification for SSI.


Ending the Disqualification for Asset Transfer. The disqualification ends if the transfer that caused the disqualification is rescinded. The duration of the disqualification is recalculated if the terms of the transfer are modified.

The Department may waive the disqualification if the disqualification would create an undue hardship on the client. The disqualification would create an undue hardship if the requirements of the following subsections are met:

If a financial group receives new countable income or resources after an undue hardship waiver has been granted, redetermine the eligibility of the client.


14. Prospective Eligibility and Budgeting

Click here for definitions used in determining prospective eligibility and budgeting

To use prospective eligibility and budgeting:

Note: We anticipate and average prospective income in accordance with the budgeting rules for self-employment income (see below and OAR 461-150-0095).

For prospective eligibility and budgeting:

Prospective: 461-150-0020
OSIPM Specific: 461-150-0050

Averaging and Anticipating Self-employment Income

Income from self-employment is averaged over 12 months in accordance with 461-150-0095.  If past income is not representative of future income, the client hasn’t been in business very long, or when a substantial change is expected in next year's income, income can be anticipated.  See OAR 461-150-0095 to determine how to anticipate income and costs. For more information about and examples of averaging and anticipating self-employment income, see Section C of Counting Client AssetsNote:  Contract income (such as educational income) is no longer addressed in the self-employment rule; nor is it pro-rated.  It is treated as earned income and budgeted based on when it is received (i.e. variable, periodic, stable, etc.).

Prospective budgeting of self-employment income 461-150-0095

Prospective Budgeting of Variable Earned and Unearned Income

Income that can be defined as variable (see OAR 461-001-0000) should be averaged and converted to a monthly amount, with a couple of exceptions:

Prospective Budgeting of Variable Income 461-150-0080

Prospective Budgeting of Periodic Income

Beginning 10/1/18, periodic income is averaged over the period for which it is paid. This means income received quarterly is averaged over 3 months, annual income is averaged over 12 months, semi-annually income is averaged over 6 months, etc.  For more information about and examples of averaging and counting periodic income (including monthly exclusions), see Section A.5 of Counting Client Assets

Treatment of Periodic Income 461-140-0110



15. Use of Rounding When Calculating Countable Income

Starting 7/6/20, all gross income received for a certain time period should be rounded to the nearest dollar.  If any calculations are required to convert the income to a stable monthly amount, the result of each calculation is also rounded to the nearest dollar.  

IMPORTANT:  Rounding is not used when calculating adjusted income or client liability! In other words, you still use rounding to determine countable income, but any calculations after that to determine adjusted income and liability are not rounded.  This includes medical costs and any other applicable deductions – they are not rounded at any stage of the calculation.

Example 1:  Molly works 10 – 15 hours per week the Coffee Hut for $12.25 per hour and is paid weekly on Friday.  She provides paystubs for an entire month, so her earned income must be first averaged to determine an average amount per pay-period, and then that amount must be converted to a stable monthly amount using the weekly pay-period multiplier.  See below for how rounding should be used:

$122.50 received 6/5/20 (round to $123)
$159.25 received 6/12/20 (round to $159)
$134.75 received 6/19/20 (round to $135)
$140.88 received 6/26/50 (round to $141)

Calculate her countable earned income as follows:

$123 + $159 + $135 + $141 = $558.00/4 pay periods = $139.50 average pay rounded to $140
$140 x 4.3 = $602.00 total countable income (no rounding needed here, but if the result was $602.45, it would be rounded to $602 and if it was $602.75, it would be rounded to $603)

Example 2:  Ruby receives quarterly periodic retirement income payments of $1,015.25.  Her monthly countable income would be calculated as follows:

$1015.25 is rounded to $1015.00.  That amount is averaged over (or divided by) 3 months and the result is rounded to the nearest dollar: $1015/3 = $338.33 rounded to $338 countable income per month.

For self-employment income, gross income received should be rounded to the nearest dollar.  Excluded costs are also rounded to the nearest dollar, and then the result of subtracting costs to determine countable self-employment income is rounded to the nearest dollar.

Example: Mitch reports $1,000.50 in gross self-employment income, and a total of $300.25 in allowable costs.  The $1,000.50 is rounded to $1,001.00, costs are rounded to $300.00.  Total countable income after excluding costs is $701.00.

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