SSA Back and Lump Sum Payment Reporting Requirements

Department of Human Services

Division of Developmental Disabilities

Information Bulletin

DD.25.016

Purpose:

This information bulletin (IB) defines the process for entering Social Security Administration (SSA) unearned income back and lump sum payments into ROCS. This IB is supplemental to DD.21.012 regarding Individual Funds Management.

Background:

Historical incidents of individuals receiving Social Security or other unearned income lump sums has resulted in a need for clarification on how to enter the income into ROCS. Medicaid eligibility is managed by the Family Community Resource Center (FCRC). Eligibility for Medicaid effects payment for services issued by and through Division of Developmental Disabilities (DDD).

Definitions:

  • Unearned income: Unearned Income is all income other than that received in the form of salary for services performed as an employee or profits from self-employment (earned income).
    • Some examples: Social Security, Disability, Life Insurance benefit, annuity funds
  • Earned Income: Earned income (EI) is wages or salary for work performed as an employee, or profits from a person's self-employment. This bulletin will not discuss how to enter earned income into ROCS. Please reference DD.21.009 for clarification on earned income and how it effects DD services.
  • Resource/Asset: A resource is real or personal property. Specific resources are exempt when figuring eligibility.
  • Personal Property: Personal property is anything owned by a person that is not land or permanently affixed to land. Nonexempt personal property includes such items as money in checking and savings accounts.

Process:

Lump sum income entered into ROCS:

  1. ROCS can accept reports of lump sum income up to two fiscal years prior to the current fiscal year.
    1. Example:
      1. As of July 1, 2025 (FY26), the farthest adjustment can go back to July 1, 2023 (FY24).
      2. There will be a payment adjustment reported in ROCS (partial adjustment) 07/2023 to 12/2023, 01/2024 to 12/2024, and 01/2025 to current date.
  2. In ROCS the provider is only able to enter and transmit one adjustment per week, starting with the earliest possible adjustment and ending with the most current dated adjustment.
    1. Community Reporting System (CRS) will retroactively reprocess ALL previous payments taking back the difference for each month to current month based on the first reporting (7/2023-12/2023 in the example above).
    2. After the second reporting (1/2024-12/2024 in the example above) CRS will reprocess a second adjustment for the applicable amount and time period of payments.
    3. After the final adjustment is reported (01/2025 to current date in example above) CRS will adjust payments from January to current date.
  3. The provider is allowed to retain the amounts which were adjusted from previous payments from Department of Human Services (DHS). The calculation will reflect the previous deduction from providers. If the provider had a minimum offset deducted from payments older than what can be corrected in ROCS, then the provider may keep the previously withheld minimum offset which they did not receive.
    1. Example: If an individual receives $0.00 in income and that is reported in ROCs, IL may deduct $14.25 per day from the payment to provider.
    2. Individual receives a back payment from Social Security Administration (SSA), covering January 2023 through July 2025.
    3. Providers can only report back two years. Following the above noted process, adjustments could only be made in ROCS going back to July 2023.
    4. From January 2023 through June 2023 that daily remittance amount is money owed to the provider from the lump sum or back payment.
  4. Remaining monies after the provider daily offset has been remitted to provider belong to the individual.
    1. Example: If the previous remittance was offset by $14.25 per day but the back payment was $20.00 per day, the difference of $5.75 per day belongs to the individual.

Note: It is important the ROCS reporting go back to the earliest date with the lowest amount and then enter subsequent payment amounts in order with the appropriate effective dates.

Income over two years old:

Any liquid assets issued for a month beyond the two fiscal year reporting period belong to the individual or representative payee. The liquid assets received for months prior to the two fiscal year reporting period do not belong to the CILA or residential provider. The CILA provider is required to adjust Representative Payee Reports if they are the Representative Payee.

  • Example: If Social Security Administration has not clearly identified the back payment amount allocated by month, then the provider should attempt to contact the SSA to identify each monthly dollar amount. In the event that SSA cannot clarify which months the back paid monies apply to, the provider can reference the SSA COLA increase information bulletins noting the annual increase. The provider can figure out how much the individual should have received and the difference can be deducted from the lump sum back payment.

In the above example these would apply:

Medicaid Spend Down:

When an individual receiving Medicaid is put on a spend down, the type of spend down will dictate what is required to become Medicaid eligible or to remain Medicaid eligible. Regaining or retaining Medicaid eligibility is called meeting the spend down. If an individual does not meet the spend down, they are not Medicaid eligible until they can prove eligibility.

An income spend down indicates the monthly ongoing expected income of the individual is higher than the monthly allowable limit for Medicaid. To prove eligibility the Family Community Resource Center (FCRC) requires the individual provide proof of income being spent (monthly or in a lump sum within the last six months) on eligible medical expenses (bills, supplies, or equipment). Proof of allowable medical expenses reduces countable income for the month.

A resource spend down indicates the individual's current countable resources are higher than the allowable resource limit. Another name for resources is assets. If a person has a resource/asset spenddown, they have 3 options:

  1. Reduce the countable resource amount and provide proof that it is lower.
  2. Provide proof of allowable medical expenses that meet or exceed the resource spenddown amount (IDHS: PM 15-04-01: Resources (AABD)).
  3. Do nothing and remain on a resource spend down. FCRC does not force reduction of resources if the person doesn't want to reduce them. They can remain on the resource spend down but should be aware that no Medicaid coverage is provided when the resource spend down is unmet (this includes payment for DDD services). Medicaid coverage cannot begin again until the spend down is verified as met by the FCRC.

Note: Spend down policy does not dictate how resource spend down can be met. Income SPD is required to be met using allowable medical expenses.

Asset Limits and How They are Counted:

Unearned income asset balance over the countable asset limit (as determined annually by the FCRC in WAG 25-03-02 (2)) can be put in an IL ABLE account (IDHS: PM 07-02-18-l ABLE Accounts), Special Needs Trust Fund, or otherwise reduced. The individual must take into consideration appropriate expenditures for their spend down per the FCRC to assure continued Medicaid eligibility (see "Medicaid Spend Down").

Note: If an individual is receiving AABD Cash and AABD Medical benefits, the resource limit is not as high as a person receiving Medicaid only.

If the lump sum back payment/unearned income places the individual on a resource spend down, and they choose not to save it in an eligible account or to spend it to reduce the balance, then the person will lose Medicaid coverage until the value of their resources is below required asset limits.

Note: Individuals receiving DDD services are not eligible for Pay-In Spenddown option.

The FCRC treats Supplemental Security Income (SSI) differently than other forms of unearned income when evaluating countable resources. An individual who lives in the community will see the SSI lump sum payment exempt as income and exempt as an asset in the month of receipt. The SSI lump sum monies remain exempt if they are kept separately identifiable from nonexempt monies (IDHS: PM 07-02-18-g: SSI Lump Sum Payments on Medical Cases and IDHS: PM 08-02-07-b: Effect of SSI Lump Sum (Medical)).

Reporting Assets Over the Allowable Limits:

It is the Representative Payee's responsibility to report back payments to the CILA or residential provider. A change in assets must be reported to the FCRC within 10 days of the change.

Turning over Assets:

It is the Representative Payee's responsibility to turn over required payments for adjustments to provider's payments if the Representative Payee is someone other than the CILA or residential provider.

Reminder: Failure to properly account for and spend appropriately any back payment could result in the FCRC determining the individual Medicaid ineligible. The ineligibility will remain in effect until the inappropriately spent assets are verified as spent down by an amount of Medicaid eligible services equal to or greater than the inappropriately spent back payment.

Effective Date

Upon posting as final 07/23/2025

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