13 CSR 40-3.2.310 provides for a resource limit of $1,000 for applicant families, and $5,000 for participant families who have entered into a self sufficiency pact.
Resources include real property, personal property, cash, securities, and the cash surrender value of life insurance and prepaid burial plans.
Include property owned by the parent(s) and eligible child(ren) in the home. If there is a stepparent, consider the full value of property owned jointly by the parent and stepparent. If the parent is not one of the record owners, do not consider the value of property owned by the stepparent. If a needy non-parent caretaker relative (NPCR) or legal guardian is included in the assistance group, count in full the property owned by the NPCR or legal guardian and their spouse.
If a husband or wife own property jointly and desertion or abandonment occurs or one spouse is in a hospital or nursing home on a continuing basis (thus the husband and wife are living apart and the children are considered deprived of parental support), consider one-half of the combined equity in jointly-owned property in determining each claimant's eligibility.
If a parent or child receives SSI or SP, do not consider any property owned in its entirety by the SSI or SP recipient in determining eligibility for Temporary Assistance. Consider property owned jointly by an SSI or SP recipient and an Temporary Assistance payee or eligible child as follows.
Include full equity of real property owned jointly by the SSI or SP recipient and the Temporary Assistance payee in determining eligibility for Temporary Assistance. EXCEPTION: If the SSI or SP recipient and Temporary Assistance payee are unmarried parents of the Temporary Assistance child, exclude the SSI or SP recipient's portion of real property in determining eligibility for Temporary Assistance.
Prorate the value of any personal property owned jointly by the SSI or SP recipient and the Temporary Assistance payee or eligible children between or among the owners. Include that portion owned by those other than the SSI or SP recipient in determining eligibility for Temporary Assistance.
EXAMPLE: An SSI or SP recipient and spouse who is the Temporary Assistance payee have a joint bank account. Consider only one-half the balance in determining eligibility for Temporary Assistance. If an eligible child's name is also on the account, consider two-thirds of the balance in determining eligibility for Temporary Assistance.
Real property includes land (including buildings or improvements on it), and its natural assets such as minerals, water, etc.
Exclude the following real property from the determination of equity to be counted as an available resource:
Include all other real property in determining a family's equity in resources.
Exclude a claimant's home (real property that furnishes shelter).
Exclude a mobile home that furnishes shelter for the family. This exclusion will occur regardless of whether the mobile home can be moved or who owns the land on which it is located. When two mobile homes are joined to form one housing unit, treat as one home.
Consider the land on which the home is located, up to 40 acres, as part of the home. Exclude it as long as the land is adjoining and no other home exists on the land. Consider land in rural areas adjoining even though a road may separate two tracts.
When an individual or couple owns two pieces of property and lives part-time in each property, they are required to designate one of the properties as their home. Consider the other property in determining the family's equity in resources.
When a family purchases a second piece of property and uses it as a home, or when two individuals marry, each owning their own home, consider the vacated home in determining the family's equity in resources.
When an individual and spouse are separated, own a home jointly, and the spouse remains in the home, exclude the homestead (home and 40 adjoining acres) in determining equity in resources as long as the spouse remains in the home. Include any excess acreage (exceeding 40 acres) in determining equity in resources. If the spouse dies or moves out, immediately consider the property in determining the family's equity in resources. In the event of divorce, immediately consider equity in the property a resource. If a family buys a second piece of property, do not consider the one-half equity in the homestead in which the spouse continues to live in determining equity in resources unless a divorce is obtained.
Exclude a life estate in determining equity in resources. Life estate is explained as the right of an individual to possess, use, occupy, and receive income from the property during his/her natural life. The interest ceases upon death. The individual cannot sell the property, but can sell or mortgage the life interest. The individual can use, sell, or dispose of the income received from the property.
Exclude dower interest in determining equity in resources. Dower is the interest the surviving spouse has in real estate belonging to a deceased spouse. It is only a life estate. It does not exist unless death occurred prior to January 1, 1956. Dower interest is one-third of the real estate for life the deceased spouse owned at death. Dower has been abolished in all estates when death occurred after December 31, 1955.
Remainder interest is the interest a person has in property when another person owns a life estate in that property. Do not consider such remainder interest in determining equity in resources. This occurs as long as another person continues to own the life estate. If this person relinquishes the life estate or dies, consider the total equity in the property in determining eligibility under the resource maximum.
Burial lots are those owned or purchased for the sole purpose of burial of relatives. Exclude one burial lot per family member in determining eligibility in resources.
Real property that is not excludable can be exempt under certain conditions. This includes, but is not limited to, property used in the course of business or employment.
Consider some income-producing property as part of the homestead and exempt it. For persons owning and living in duplexes or apartment buildings or renting a room in their home, consider that property as part of the homestead and exclude it. Likewise, for persons renting a converted garage or similar building, consider that property as part of the homestead and exclude it.
If two houses are on the property, the home where the family is not living is included in determining equity in resources.
Use the following guidelines in determining the amount of land to consider.
For determining eligibility for assistance, consider the value of real estate as its current market value less the total amount of indebtedness. In determining the value of real property, do not use the assessed value as the sole basis of the determination. Use the assessed value to confirm the claimant's statement if eligibility is not in question.
In reinvestigations, accept a claimant's statement of equity if reasonable, unless substantial improvements have been made in the condition of the property.
Determine the value of property by using any one of the following methods.
Determine debt recorded against property. This can be a mortgage on the property, liens, unpaid taxes, or other debts recorded against it. Such debts are usually verified by copies of the mortgage or lien in the individual's possession or from payment schedules where monthly payments are made. DO NOT CONSIDER INDEBTEDNESS NOT RECORDED AS A MORTGAGE OR LIEN AGAINST THE PROPERTY (EXCEPT PROPERTY TAXES).
Most often, a home and adjoining land are bought with one loan for the entire property. When determining a family's equity in land exceeding 40 acres, and only one loan exists for the entire property, determine the proportionate value of the excess acreage versus the entire property (home and 40 acres plus excess acreage). Apply that percentage to debt to determine the proportionate share of debt to consider against the excess acreage. The value of the excess acreage less proportionate debt equals equity in excess acreage.
EXAMPLE: A family is buying a home and 55 acres. The home and 40 acres are valued at $45,000. The excess 15 acres are valued at $6,000. The outstanding debt on the entire property is $30,000. The proportionate value of excess property to total property is $6,000 divided by $51,000 equaling 11.8 percent. 11.8 percent multiplied by $30,000 equals $3,540, the proportionate debt. Equity in excess property is the $6,000 value less $3,540 debt equaling $2,460. Equity of $2,460 in the excess property exceeds the $1,000 resource maximum allowed for applicants.
If an applicant is just slightly over the $1,000 maximum, contact the bank or institution holding the loan to determine how much payment it expects from the outstanding loan if the excess property is sold. Consider the bank's or institution's statement in making the final determination.
Some property belongs to both husband and wife. It is recorded in both names, in entirety, (neither one can sell or otherwise dispose of the property, without the consent of the other.) When separated, compute each one's equity in property jointly owned as one-half of the net real value of the property. Tenancy in entirety is dissolved by death of one of the parties or by divorce.
When property is owned by two or more persons other than husband and wife, or by a divorced couple, it is most often called tenancy in common. Each person's share in the property is proportional to the total number of persons unless a different division is specified in the deed or will, if the property was acquired by inheritance. If three persons have tenancy in common in a piece of property, each normally owns one-third of the property. Each owner can sell or otherwise dispose of his/her share in the property without consent of the others, and his/her share at death is inherited by heirs. Such an arrangement is indicated in the deed or will by the words tenancy in common or share and share alike, a statement that the property is held jointly, or a statement that the owners have joint property.
Occasionally property owned by two or more persons (other than husband or wife) is held in joint tenancy. This means the property cannot be inherited by the heirs of the one who dies first but remains the property of the survivor. As long as both or all joint owners are living, the equity of each owner is the same as for a tenancy in common.
For individuals owning property by tenancy in common or joint tenancy, consider their equity in such property regardless of the fractional interest owned by each. Verify the individual's ownership of fractional interest in the property at the time of approval or reinvestigation. As with other property, accept the claimant's estimate of the value without obtaining an appraisal, provided the estimate is confirmed by judgment and knowledge of the value of similar property. If in doubt of the individual's value estimate, request a special appraisal to determine the value of the fractional interest.
If a special appraisal is required and no appraiser can be located, document the efforts to secure an appraisal. The individual's value can then be accepted.
Exclude the value of property that is considered a resource if the household is making a good faith effort to sell.
EXAMPLE: An applicant has equity in real property of $500, equity in a second car $300 over and above the $1,500 exemption, and $400 in cash and securities. The applicant is otherwise eligible and, if approved, would receive a maximum grant for three people.
If the applicant instead uses cash and securities to deplete resources to $1,000 or less, s/he must use $200 before gaining eligibility.
The participant must report the following:
Use the realtor as the primary source of information to verify the participant's cooperation.
If net proceeds from the sale of the property, together with all other resources, exceed the resource maximum, consider the family ineligible on resources. Ineligibility begins the month after the family receives the proceeds from the sale, if the proceeds are retained. If the money from the sale of the property is not kept by the family, and is not converted into another type of countable resource, do not consider it an available resource.
Personal property includes household goods, jewelry, livestock, farm surplus (such as grain, produce, etc.), farm or business machinery or equipment, automobiles and trucks, and similar items. Even though mobile homes are personal property, treat them as real property.
Automobile is defined as a passenger car or other motor vehicle used to provide transportation of goods or persons.
Exclude the equity value of one automobile and up to $1500 equity value of an additional automobile in determining equity in resources for Temporary Assistance applicants and participants. If two or more additional vehicles are owned, subtract the $1500 exclusion from one, whichever is most beneficial to the recipient. Once the $1500 exclusion is applied to an additional automobile, the remaining equity in that automobile, plus the equity in any other additional automobile, must be included in determining the claimant's equity in resources.
Do not include saleable personal property used to produce income in determining the claimant's equity in resources. Do not exclude an automobile or truck under this provision. Evaluate all motor vehicles according to the policy outlined for automobiles. Excludable personal property can include tools (carpenter's, farmer's), farm livestock or produce (raised for home consumption or to sell), merchandise (salesman's), etc.
Include saleable personal property not used to produce income (and not otherwise excluded) in determining the claimant's equity in resources. EXCEPTION: For any person temporarily laid off, experiencing a non-work cycle, or temporarily disabled, exclude work-related personal property as a resource.
Do not include household furnishings in determining the claimant's equity in resources unless they are not used by the claimant.
Exclude jewelry of limited value (i.e., costume jewelry) and wedding and engagement rings from determining a family's equity in resources.
Exclude personal effects (i.e., clothing, cosmetics, toys, etc.) and household goods (i.e., food on hand, cleaning supplies, tools used for home maintenance, lawnmower, etc.) in determining equity in property.
Cash and securities include cash in personal possession or in a safe-deposit box; deposits in bank, building and loan, or trust companies; stocks; bonds; mortgages; promissory notes; U.S. Savings Bonds; building and loan certificates; personal notes; bills of exchange; bank checks; certificates of deposit; the balance due on a sales contract; and similar instruments, both negotiable and non-negotiable.
Exclude the following when determining a family's equity in resources.
Exclude any cash on hand remaining from an assistance check, or any other budgeted monthly income received by the assistance group during the month in which the investigation is conducted, as it is income. Do not consider in the amount of cash and securities owned.
Exclude deficiency or retroactive payments for the month paid and in the following month.
Treat involuntary conversion of real property into personal property as follows.
Apply the following to Temporary Assistance participants, not to applicants.
Consider any proceeds from involuntary conversion of real property into personal property (such as forced transfer under condemnation; eminent domain; and fire, flood, or other acts of God) received by a family while receiving cash benefits. Receipt means actual receipt of the proceeds or the payment into court of the proceeds. EXCEPTION: In condemnation cases where the initial exception to the com-missioner's award is filed by the condemning authority, receipt means receipt of an award under a final judgment.
Consider the following in administering this section of the law.
Exclude income received on an annual basis (such as sale of livestock in the fall) and put aside in a separate account for yearly maintenance as cash and securities. Consider as income when determining need. Consider any amount remaining at the end of the year as cash and securities. Determine the year by computing from the sale of livestock, etc. If other funds are deposited in this account, such as a Social Security check, etc., consider the entire amount as cash and securities.
Count trust funds or restricted bank accounts as income or cash and securities only if actually available. If they are available in lump sum, count as cash and securities. If available in regular installments, count as income.
Where a trust fund or restricted account (controlled by the Probate Court) is involved, advise the Probate Court in writing that the person is a Temporary Assistance applicant or participant explain that FSD must consider all legally available resources. Inquire whether the trust fund or restricted account is available to the claimant. Inquire if it is available in the entire lump sum or in regular payments. Base the decision on how to utilize resource in the Court's reply.
If the Probate Court does not reply within 20 days, verbally follow up. On pending applications or applications to add a child or person, immediately approve or reject assuming the trust fund or restricted account is unavailable. Follow-up will be conducted after a decision on the application is made. If the information is still unavailable after a verbal follow-up, assume the funds are not available. Exclude them in determining eligibility on cash and securities. Unless the claimant indicates otherwise, assume no income is available from these funds. If further information regarding the trust fund or restricted account is received from the Probate Court at a later time, reconsider availability of the funds.
For restricted accounts not controlled by the Probate Court, determine whether or not the account is available. If the restricted account is clearly available to the individual, count as income or cash and securities, as appropriate. If the restricted account is clearly unavailable, exclude in determining eligibility.
Consider an Individual Development Account (IDA) to be a restricted account. Do not consider any portion of the account to be available to the claimant.
Consider an Achieving Better Life Experience (ABLE) account to be a restricted account. Do not consider any portion of the account to be available to the claimant.
Exclude a joint bank account if the claimant states he/she has not contributed to the balance and circumstances indicate this is reasonable. Only count that portion of a joint account as cash and securities to which the claimant contributed. Accept the claimant's statement. This does NOT apply in stepparent cases. In step parent situations consider the total amount on deposit.
Exempt funds retain exclusion indefinitely if maintained in a separate account. Excluded funds in an account with non-excluded funds retain exemption for six months from the date of commingling. After the six month time limit, consider all funds in the comingled account as a resource.
NOTE: Resources of students and self-employed households that are prorated as income and are comingled in an account with non-excluded funds retain exclusion for the period of time over which they have been prorated as income.
Exclude a bona fide loan from any source. A bona fide loan is supported by a written agreement to repay within a specified time or received from an individual or establishment engaged in the business of making loans. If neither condition applies, consider a loan bona fide if the claimant acknowledges, verbally or in writing that:
Include the cash surrender value of life insurance in determining the family's equity in resources. Consider insurance policies paid for by the family, but insuring another person not in the assistance group, available only to the insured person. If someone else pays the premium, refer to #3, Provisions that Apply to Both Life Insurance and Prepaid Burials, in this section.
Disregard $1,500 of equity value for each family member when counting equity value of prepaid burials in determining eligibility for resources. Apply the value of an irrevocable prepaid burial, although not counted toward the resource maximum, against the $1,500 equity value exemption.
Three types of prepaid burial contracts exist. Refer to the General Information Manual for definitions. In arriving at the equity under either of the three contract types, the value is the total of all payments made that exceed the amount to which the seller is entitled upon cancellation. Any interest earned by such deposited funds belongs to the seller.
In the event a family purchased or is purchasing a prepaid burial plan through a written contract that does not meet the specification of the three plans, the individual owns 100 percent of such funds and the $1,500 exemption applies the same way it applies to a valid contract.
If the family has an irrevocable pre-need contract (see the General Information Manual), the following options are available.
If the value of the participant's life insurance/prepaid burial policies on which other persons are paying premiums might affect eligibility, determine the length of time the arrangement has been in effect, the amount paid out in premiums, and whether a release of the policy has been executed.
The assets in a life insurance policy belong to the insured person unless s/he signed a release to a person paying the premiums and registered this release with the insurance company. EXCEPTION: If premiums have been paid by other relatives since the date of issuance, consider the policy as belonging to this relative, it will not affect eligibility. If the participant paid the premiums for part of the time the policy has been in effect, determine claimant equity by computing his/her proportionate share based on present cash surrender value.
EXAMPLE: An individual's policy has been in effect for 20 years. It has a present cash surren-der value of $800. A daughter paid the premiums for the past 15 years. Consider the individuals equity as five-twentieths or one-fourth of the cash surrender value, or $200. These instructions also apply to prepaid burials.