PM 08-02-07.

A lump sum payment used to pay expenses that are related to receipt of the lump sum income is exempt.

Example: A client is a beneficiary of a $2,000 life insurance policy. If $1,800 is used for the funeral expense of the insured, budget $500 ($2,000 life insurance settlement minus $1,500 maximum for funeral and burial) as lump sum income.