<p>Federal Poverty Level [is] “based on a family’s annual cash income, rather than their total wealth, annual consumption or their own assessment of well-being.”</p>
<p>My kids have ridden on our dime for 20-some years, shared every triumph of ours. :)</p>
<p>I don’t expect them to exactly return the favor when I am decrepit, but that’s another thread.</p>
<p>^Ok, thanks Igloo. It looks like she can get a subsidy then.</p>
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<p>Or, she could sell non-liquid assets at a loss, and have zero income, but still have the disposable cash to pay the bills.</p>
<p>Igloo,</p>
<p>To my knowledge she does not get an unemployment benefit, because she is not looking to work. Isn’t that a requirement?</p>
<p>Not sn expert but I don’t think you need to, to get an unemplyment benefits. When we work, we pay into some kind of unemployment insurance. I think that’s what we get to tap into when we get unemployed.</p>
<p>To get unemployment benefits you need to have lost a job. Looking for another job is a requirement on paper in that you check a box.</p>
<p>My sister didn’t lose her job, she quit. I also don’t have the kind of relationship with her that would make me comfortable about asking the details of her financial situation, so mostly I go on what I see and know casually.</p>
<p>“Bay, the way it works; if she need $100K to live on, she may get it by generating taxable income of only about $10K if she sells securities that appreciated 10%.”</p>
<p>If I understand correctly, the income is what is at the bottom of the 1040 first page. So it would still show your profit of 100k at the bottom of first page even if taxes are 10k.</p>
<p>Quitting does not qualify for benefits. You need to be fired or laid off to get unemployment.</p>
<p>Texas, if you bought stock for $100,000 and sold it for $110,000, you would have $110,000 to spend but capital gains of only $10,000. Your adjusted gross income would be $10,000, assuming you don’t have other deductions.</p>
<p>Bay, the estimated per capita cost for Medicaid (for 2012) was $4,362 for each adult covered (less for children on Medicaid). Subsidies for younger adults on the exchange will tend to be much smaller than subsidies for older adults, because the subsidy is calculated against a base premium amount, and their premiums are smaller. So if we assume a person with a $200 monthly premium, who is receiving $150/month subsidy, we would have a cost to the federal government of $1800. </p>
<p>The hypothetical that gave rise to this discussion did not involve someone claiming a higher income in order to avoid Medicaid, however. It involved someone finding a way to actually have an income in a state that did not participate in the Medicaid expansion, where otherwise the person would go without any health care coverage at all- meaning that if that person got sick and was hospitalized, there would be unpaid bill of many thousands of dollars that would be passed onto the rest of us through steadily increasing health costs. </p>
<p>There is a public policy in favor of bringing all people under the umbrella of some sort of health coverage - evidenced in the ACA – and a public policy in favor of employment. The question was whether wages paid by one’s parents is legally the same as earned income coming from an unrelated third party. It is. </p>
<p>It probably would be illegal for parents to hire adult offspring and pay anything less than minimum wage in their state. Here’s a page that lists all the exemptions to minimum wage provisions: <a href=“http://www.dol.gov/elaws/esa/flsa/screen75.asp[/url]”>http://www.dol.gov/elaws/esa/flsa/screen75.asp</a> – I see an exemption for parents hiring “youth”, but not for adult offspring. </p>
<p>I think that there would be a lot more unemployed young people in this country if there was a law that prevented parents from hiring their own grown children, at all levels.</p>
<p>GP - We are discussing a profit of 100k, not 10k.</p>
<p>The tax is 10k.</p>
<p>Texaspg, depends on whether the securities were bought with pre-tax income. If they were bought with post-tax income, then the person would only see $10K as income while having $110K in cash after the sale.</p>
<p>Texas, igloo said taxable income of $10,000, which I am assuming is a profit not a tax.</p>
<p>We are discussing securities right? Otherwise it would be IRA or 401k cashing.</p>
<p>“if she need $100K to live on, she may get it by generating taxable income of only about $10K if she sells securities that appreciated 10%”</p>
<p>How do you get 100k outside of IRA accounts?</p>
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<p>I assume you mean “expense” not “income?”</p>
<p>It looks like it would be cheaper to subsidize on the exchange, but I note that the number you gave was for pre-ACA Medicaid expansion. I assume that with all of the millions of young healthy adults added to the Medicaid rolls, the per capita expense is expected to go down. (?)</p>
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<p>??? Lots of people have assets that are not sheltered in any way. I think the bigger question that many would ask is how do they get their assets into IRA accounts so they can shelter them from taxes.</p>
<p>calmom, I see you changed income to “cost.” Ok.</p>
<p>Yes Bay, I meant to type “cost” and went back and corrected my post. Thank you for pointing out my error. (I have a source for that number but can’t get the link to work – I can see the page with the numbers in Google but I get a “web page not available” error when I try to click through)</p>
<p>“The question was whether wages paid by one’s parents is legally the same as earned income coming from an unrelated third party.”</p>
<p>It is if the income was actually earned and commensurate for the work performed. If you have a small business and you are audited, the tax auditor is much more likely to scrutinize payments to related parties, such as kids, because these types of transactions are much more susceptible to abuse.</p>