A person with a disability may make a down payment on an impairmentrelated item,
or possibly a service, to be followed by regular monthly payments. Such down payments
either are deducted entirely in 1 month, or allocated over a 12consecutive month
period, whichever the person chooses. Explain that the down payment may be allocated
in order to provide for uniform monthly deductions.
When the down payment is allocated over a 12month period, make the following calculation:

•
determine the total payment made over a 12consecutive month period beginning with
the month of down payment (i.e., the down payment plus the regular monthly payments
that are made during that period) and

•
divide the total equally over the 12 months.
Beginning with the 13th month, deduct the regular monthly payment amount. If the regular
monthly payments extend for less than 12 months, allocate the total amount payable
(down payment plus monthly payments) over the shorter period.
EXAMPLE 3:
A person with a disability starts working in October 2001, at which time they purchase
special equipment at a cost of $4,800, paying $1,200 down. The balance of $3,600,
plus interest of $540, is to be repaid in 36 installments of $115 a month beginning
November 2001. The person earns and receives $800 a month. In this situation a $205.42
monthly deduction is allowed beginning October 2001 and ending in September 2002.
After September 2002, the deduction amount is the regular monthly payment of $115.
Calculation for above example:
Payment Type

Amount

Down payment in 10/01

$1,200

Monthly payments 11/01 through 09/02

+1,265


$2,465 /12 = $205.42

EXAMPLE 4:
While working, a person with a disability purchases a deductible item in July 2001,
paying $1,450 down. (The person earns and receives $500 a month.) However, the first
monthly payment of $125 is not due until September 2001. In this situation, a $225
monthly deduction is allowed beginning in July 2001 and ending in June 2002. After
June 2002, the deduction amount is the regular monthly payment of $125. Calculation
for above example:
Payment Type

Amount

Down payment in 07/01

$1,450

Monthly payments 09/01 through 06/02

+1,250


$2,700 /12 = $225
