Neither the $4,000 Ms. Smith receives in July nor the $500 she receives in August
is unearned income. Since she uses $900 of the $4,000 life insurance check in July,
as of August 1, she has a $3,100 balance which is not a resource for August. During
August she pays the $2,900 bill and then has $200 left. However, the $500 she receives
in August gives her $700 to use for hospital expenses. She must spend $200 in August
for burial or last illness expenses, otherwise the $200 will count as a resource September
1. She has until the end of September to spend the remaining $500, otherwise it will
be a resource October 1.