One of the topics that has really made the eHotline “hot” lately is how to treat Medicare Advantage Supplemental Benefits spending cards. These cards are granted to many Medicare Advantage customers to help supplement their medical/disability-related needs. The money is loaded onto a prepaid card each month and, in some cases, does not “roll-over”—recipients use it or lose it.
So, is this counted as a source of income? Does it need to be verified?
HUD has addressed this question with a new FAQ document from January 2025.
Stakeholders are only responsible for verifying and including amounts on these cards when the resident/applicant uses some or all of the money to pay for rent or utilities. If they use the card to pay for anything else, HUD does not require it to be counted as a source of income, and it does not need to undergo verification.
To establish when and how much to count for such cards, ask the following questions:
- Do you have a Medicare Advantage Supplemental Benefits card?
- If so, do you use it to pay for rent and/or utilities?
If they don’t have a card, you can move on to ask other important interview questions. If they do have the card but they don’t use it to pay for rent and/or utilities, you’re also in the clear. It’s when they say that they use some or all of those funds to pay for rent and/or utilities that you’ll need to pursue further verification.
HUD acknowledges that it is not reasonable to expect households to keep a record of each transaction incurred on the card, but also reminds us that we may seek third-party verification or accept a self-certification of the amount spent on rent/utilities. Count those amounts as income.
If the resident/applicant does not use the card for rent or utilities, you don’t need to take any further action.
If they do not use amounts provided on the card, don’t count anything as a source of income. This applies when they “lose” their benefit due to their card’s prohibition on rolling-over and if they don’t use the supplement at all.
Remember: unless HUD specifically excludes something, it’s counted as a source of income.