AUTHORITY:
Secs. 702(a)(5), 1602, 1611, 1612, 1613, 1614(f), 1621, and 1631 of the Social
Security Act (42 U.S.C. 902(a)(5), 1381a, 1382, 1382a, 1382b, 1382c(f), 1382j,
and 1383); sec. 211, Pub. L. 93-66, 87 Stat. 154 (42 U.S.C. 1382 note).
SOURCE: 40 FR
48915, Oct. 20, 1975, unless otherwise noted.
(a) Resources; defined. For
purposes of this subpart L, resources means cash or other liquid assets or any
real or personal property that an individual (or spouse, if any) owns and could
convert to cash to be used for his or her support and maintenance.
(1) If the individual has the right,
authority or power to liquidate the property or his or her share of the
property, it is considered a resource. If a property right cannot be
liquidated, the property will not be considered a resource of the individual
(or spouse).
(2) Support and maintenance
assistance not counted as income under §416.1157(c) will
not be considered a resource.
(3) Except for cash reimbursement of
medical or social services expenses already paid for by the individual, cash
received for medical or social services that is not income under §416.1103 (a) or
(b), or a retroactive cash payment which is income that is excluded from
deeming under §416.1161(a)(16),
is not a resource for the calendar month following the month of its receipt.
However, cash retained until the first moment of the second calendar month
following its receipt is a resource at that time.
(i) For purposes of this provision,
a retroactive cash payment is one that is paid after the month in which it was
due.
(ii) This provision applies only to
the unspent portion of those cash payments identified in this paragraph (a)(3).
Once the cash from such payments is spent, this provision does not apply to
items purchased with the money, even if the period described above has not
expired.
(iii) Unspent money from those cash
payments identified in this paragraph (a)(3) must be identifiable from other
resources for this provision to apply. The money may be commingled with other
funds, but if this is done in such a fashion that an amount from such payments
can no longer be separately identified, that amount will count toward the
resource limit described in §416.1205.
(4) Death benefits, including gifts
and inheritances, received by an individual, to the extent that they are not
income in accordance with paragraphs (e) and (g) of §416.1121 because
they are to be spent on costs resulting from the last illness and burial of the
deceased, are not resources for the calendar month following the month of
receipt. However, such death benefits retained until the first moment of the
second calendar month following their receipt are resources at that time.
(b) Liquid resources. Liquid
resources are cash or other property which can be converted to cash within 20
days, excluding certain nonwork days as explained in §416.120(d).
Examples of resources that are ordinarily liquid are stocks, bonds, mutual fund
shares, promissory notes, mortgages, life insurance policies, financial
institution accounts (including savings, checking, and time deposits, also
known as certificates of deposit) and similar items. Liquid resources, other
than cash, are evaluated according to the individual's equity in the resources.
(See §416.1208
for the treatment of funds held in individual and joint financial institution
accounts.)
(c) Nonliquid resources. (1)
Nonliquid resources are property which is not cash and which cannot be
converted to cash within 20 days excluding certain nonwork days as explained in
§416.120(d).
Examples of resources that are ordinarily nonliquid are loan agreements,
household goods, automobiles, trucks, tractors, boats, machinery, livestock,
buildings and land. Nonliquid resources are evaluated according to their equity
value except as otherwise provided. (See §416.1218 for
treatment of automobiles.)
(2) For purposes of this subpart L,
the equity value of an item is defined as:
(i) The price that item can
reasonably be expected to sell for on the open market in the particular
geographic area involved; minus
(ii) Any encumbrances.
(a) Married individual. In
the case of an individual who is living with a person not eligible under this
part and who is considered to be the husband or wife of such individual under
the criteria in §§416.1802
through 416.1835
of this part, such individual's resources shall be deemed to include any
resources, not otherwise excluded under this subpart, of such spouse whether or
not such resources are available to such individual. In addition to the
exclusions listed in §416.1210,
pension funds which the ineligible spouse may have are also excluded. Pension
funds are defined as funds held in individual retirement accounts (IRA), as
described by the Internal Revenue Code, or in work-related pension plans
(including such plans for self-employed individuals, sometimes referred to as
Keogh plans).
(b) Child—(1) General.
In the case of a child (as defined in §416.1856) who is
under age 18, such child's resources shall be deemed to include any resources,
not otherwise excluded under this subpart, of an ineligible parent of such
child (or the ineligible spouse of a parent) who is living in the same
household (as defined in §416.1851) as such
child, whether or not available to such child, to the extent that the resources
of such parent (or such spouse of a parent) exceed the resource limits
described in §416.1205
except as provided in paragraph (b)(2) of this section. (If the child is living
with only one parent, the resource limit for an individual applies. If the
child is living with both parents (or one parent and his or her spouse), the
resource limit for an individual and spouse applies.) In addition to the
exclusions listed in §416.1210,
pension funds which the ineligible parent or spouse of a parent may have are
also excluded. "Pension funds" are defined in paragraph (a) of this
section. As used in this section, the term "parent" means the natural
or adoptive parent of a child and "spouse of a parent" means the
spouse (as defined in §416.1806) of such
natural or adoptive parent.
(2) Disabled child under age 18.
In the case of a disabled child under age 18 who is living in the same
household with his or her parents, the deeming provisions of paragraph (b)(1)
of this section shall not apply if such child—
(i) Previously received a reduced
SSI benefit while a resident of a medical facility, as described in §416.414;
(ii) Is eligible for medical
assistance under a Medicaid State home care plan approved by the Secretary
under the provisions of section 1915(c) or authorized under section 1902(e)(3)
of the Act; and
(iii) Would otherwise be ineligible
because of the deeming of his or her parents' resources or income.
(c) Applicability. When used
in this subpart L, the term individual refers to an eligible aged,
blind, or disabled person, and also includes a person whose resources are
deemed to be the resources of such individual (as provided in paragraphs (a)
and (b) of this section).
In the case of a qualified
individual (as defined in §416.221) whose
payment standard has been increased because of the presence of an essential
person (as defined in §416.222), the
resources of such qualified individual shall be deemed to include all the
resources of such essential person. If such qualified individual would not meet
the resource criteria for eligibility (as defined in §§416.1205 and 416.1260) because
of the deemed resources, then the payment standard increase because of the
essential person will be nullified and the provision of this section will not apply;
essential person status is lost permanently. However, if such essential person
is an ineligible spouse of a qualified individual or a parent (or spouse of a
parent) of a qualified individual who is a child under age 21, then the
resources of such person will be deemed to such qualified individual in
accordance with the provision in §416.1202.
(a) Individual with no eligible
spouse. An aged, blind, or disabled individual with no spouse is eligible
for benefits under title XVI of the Act if his or her nonexcludable resources
do not exceed $1,500 prior to January 1, 1985, and all other eligibility
requirements are met. An individual who is living with an ineligible spouse is
eligible for benefits under title XVI of the Act if his or her nonexcludable
resources, including the resources of the spouse, do not exceed $2,250 prior to
January 1, 1985, and all other eligibility requirements are met.
(b) Individual with an eligible
spouse. An aged, blind, or disabled individual who has an eligible spouse
is eligible for benefits under title XVI of the Act if their nonexcludable
resources do not exceed $2,250 prior to January 1, 1985, and all other
eligibility requirements are met.
(c) Effective January 1, 1985 and
later. The resources limits and effective dates for January 1, 1985 and
later are as follows:
|
Effective date
|
Individual |
Individual and
spouse |
|
Jan. 1, 1985 |
$1,600 |
$2,400 |
|
Jan. 1, 1986 |
1,700 |
$2,550 |
|
Jan. 1, 1987 |
1,800 |
$2,700 |
|
Jan. 1, 1988 |
1,900 |
$2,850 |
|
Jan. 1, 1989 |
2,000 |
$3,000 |
(a) General. Resources
determinations are made as of the first moment of the month. A resource
determination is based on what assets an individual has, what their values are,
and whether or not they are excluded as of the first moment of the month.
(b) Increase in value of
resources. If, during a month, a resource increases in value or an
individual acquires an additional resource or replaces an excluded resource
with one that is not excluded, the increase in the value of the resources is
counted as of the first moment of the next month
(c) Decrease in value of
resources. If, during a month, a resource decreases in value or an
individual spends a resource or replaces a resource that is not excluded with
one that is excluded, the decrease in the value of the resources is counted as
of the first moment of the next month.
(d) Treatment of items under
income and resource counting rules. Items received in cash or in kind
during a month are evaluated first under the income counting rules and, if
retained until the first moment of the following month, are subject to the
rules for counting resources at that time.
(e) Receipts from the sale,
exchange, or replacement of a resource. If an individual sells, exchanges
or replaces a resource, the receipts are not income. They are still considered
to be a resource. This rule includes resources that have never been counted as
such because they were sold, exchanged or replaced in the month in which they
were received. See §416.1246
for the rule on resources disposed of for less than fair market value
(including those disposed of during the month of receipt).
Example: Miss L., a disabled individual, receives a $350 unemployment
insurance benefit on January 10, 1986. The benefit is unearned income to Miss
L. when she receives it. On January 14, Miss L. uses the $350 payment to
purchase shares of stock. Miss L. has exchanged one item (cash) for another
item (stock). The $350 payment is never counted as a resource to Miss L.
because she exchanged it in the same month she received it. The stock is not
income; it is a different form of a resource exchanged for the cash. Since a
resource is not countable until the first moment of the month following its
receipt, the stock is not a countable resource to Miss L. until February 1.
(a) General. Funds held in a
financial institution account (including savings, checking, and time deposits,
also known as certificates of deposit) are an individual's resource if the
individual owns the account and can use the funds for his or her support and
maintenance. We determine whether an individual owns the account and can use
the funds for his or her support and maintenance by looking at how the
individual holds the account. This is reflected in the way the account is
titled.
(b) Individually-held account.
If an individual is designated as sole owner by the account title and can
withdraw funds and use them for his or her support and maintenance, all of the
funds, regardless of their source, are that individual's resource. For as long
as these conditions are met, we presume that the individual owns 100 percent of
the funds in the account. This presumption is non-rebuttable.
(c) Jointly-held account—(1) Account
holders include one or more SSI claimants or recipients. If there is only
one SSI claimant or recipient account holder on a jointly held account, we
presume that all of the funds in the account belong to that individual. If
there is more than one claimant or recipient account holder, we presume that
all the funds in the account belong to those individuals in equal shares.
(2) Account holders include one
or more deemors. If none of the account holders is a claimant or recipient,
we presume that all of the funds in a jointly-held account belong to the
deemor(s), in equal shares if there is more than one deemor. A deemor is a
person whose income and resources are required to be considered when
determining eligibility and computing the SSI benefit for an eligible
individual (see §§416.1160
and 416.1202).
(3) Right to rebut presumption of
ownership. If the claimant, recipient, or deemor objects or disagrees with
an ownership presumption as described in paragraph (c)(1) or (c)(2) of this section,
we give the individual the opportunity to rebut the presumption. Rebuttal is a
procedure as described in paragraph (c)(4) of this section, which permits an
individual to furnish evidence and establish that some or all of the funds in a
jointly-held account do not belong to him or her. Successful rebuttal
establishes that the individual does not own some or all of the funds. The
effect of successful rebuttal may be retroactive as well as prospective.
Example: The recipient's first month of eligibility is January 1993. In
May 1993 the recipient successfully establishes that none of the funds in a
5-year-old jointly-held account belong to her. We do not count any of the funds
as resources for the months of January 1993 and continuing.
(4) Procedure for rebuttal.
To rebut an ownership presumption as described in paragraph (c)(1) or (c)(2) of
this section, the individual must:
(i) Submit his/her statement, along
with corroborating statements from other account holders, regarding who owns
the funds in the joint account, why there is a joint account, who has made
deposits to and withdrawals from the account, and how withdrawals have been
spent;
(ii) Submit account records showing
deposits, withdrawals, and interest (if any) in the months for which ownership of
funds is at issue; and
(iii) Correct the account title to
show that the individual is no longer a co-owner if the individual owns none of
the funds; or, if the individual owns only a portion of the funds, separate the
funds owned by the other account holder(s) from his/her own funds and correct
the account title on the individual's own funds to show they are solely-owned
by the individual.
In determining the resources of an
individual (and spouse, if any) the following items shall be excluded:
(a) The home (including the land
appertaining thereto) to the extent its value does not exceed the amount set
forth in §416.1212;
(b) Household goods and personal
effects to the extent that their total value does not exceed the amount
provided in §416.1216;
(c) An automobile to the extent that
its value does not exceed the amount provided in §416.1218;
(d) Property of a trade or business
which is essential to the means of self-support as provided in §416.1222;
(e) Nonbusiness property which is
essential to the means of self-support as provided in §416.1224;
(f) Resources of a blind or disabled
individual which are necessary to fulfill an approved plan for achieving
self-support as provided in §416.1226;
(g) Stock in regional or village
corporations held by natives of Alaska during the twenty-year period in which
the stock is inalienable pursuant to the Alaska Native Claims Settlement Act
(see §416.1228);
(h) Life insurance owned by an
individual (and spouse, if any) to the extent provided in §416.1230;
(i) Restricted allotted Indian lands
as provided in §416.1234;
(j) Payments or benefits provided
under a Federal statute other than title XVI of the Social Security Act where
exclusion is required by such statute;
(k) Disaster relief assistance as
provided in §416.1237;
(l) Burial spaces and certain funds
up to $1,500 for burial expenses as provided in §416.1231;
(m) Title XVI or title II
retroactive payments as provided in §416.1233;
(n) Housing assistance as provided
in §416.1238;
(o) Refunds of Federal income taxes
and advances made by an employer relating to an earned income tax credit, as
provided in §416.1235;
(p) Payments received as
compensation for expenses incurred or losses suffered as a result of a crime as
provided in §416.1229;
(q) Relocation assistance from a
State or local government as provided in §416.1239; and
(r) Dedicated financial institution
accounts as provided in §416.1247.
(a) Defined. A home is any
property in which an individual (and spouse, if any) has an ownership interest
and which serves as the individual's principal place of residence. This
property includes the shelter in which an individual resides, the land on which
the shelter is located and related outbuildings.
(b) Home not counted. We do
not count a home regardless of its value. However, see §§416.1220 through
416.1224 when
there is an income-producing property located on the home property that does
not qualify under the home exclusion.
(c) If an individual changes
principal place of residence. If an individual (and spouse, if any) moves
out of his or her home without the intent to return, the home becomes a
countable resource because it is no longer the individual's principal place of
residence. If an individual leaves his or her home to live in an institution,
we still consider the home to be the individual's principal place of residence,
irrespective of the individual's intent to return, as long as a spouse or
dependent relative of the eligible individual continues to live there. The individual's
equity in the former home becomes a countable resource effective with the first
day of the month following the month it is no longer his or her principal place
of residence.
(d) Proceeds from the sale of an
excluded home. (1) The proceeds from the sale of a home which is excluded
from the individual's resources will also be excluded from resources to the
extent they are intended to be used and are, in fact, used to purchase another
home, which is similarly excluded, within 3 months of the date of receipt of
the proceeds.
(2) The value of a promissory note
or similar installment sales contract constitutes a "proceed" which
can be excluded from resources if—
(i) The note results from the sale
of an individual's home as described in §416.1212(a);
(ii) Within 3 months of receipt
(execution) of the note, the individual purchases a replacement home as
described in §416.1212(a)
(see paragraph (e) of this section for an exception); and
(iii) All note-generated proceeds
are reinvested in the replacement home within 3 months of receipt (see
paragraph (f) of this section for an exception).
(3) In addition to excluding the
value of the note itself, other proceeds from the sale of the former home are
excluded resources if they are used within 3 months of receipt to make payment
on the replacement home. Such proceeds, which consist of the downpayment and
that portion of any installment amount constituting payment against the
principal, represent a conversion of a resource.
(e) Failure to purchase another
excluded home timely. If the individual does not purchase a replacement
home within the 3-month period specified in paragraph (d)(2)(ii) of this
section, the value of a promissory note or similar installment sales contract
received from the sale of an excluded home is a countable resource effective
with the first moment of the month following the month the note is executed. If
the individual purchases a replacement home after the expiration of the 3-month
period, the note becomes an excluded resource the month following the month of
purchase of the replacement home provided that all other proceeds are fully and
timely reinvested as explained in paragraph (f) of this section.
(f) Failure to reinvest proceeds
timely. (1) If the proceeds (e.g., installment amounts constituting payment
against the principal) from the sale of an excluded home under a promissory
note or similar installment sales contract are not reinvested fully and timely
(within 3 months of receipt) in a replacement home, as of the first moment of
the month following receipt of the payment, the individual's countable
resources will include:
(i) The value of the note; and
(ii) That portion of the proceeds,
retained by the individual, which was not timely reinvested
(2) The note remains a countable
resource until the first moment of the month following the receipt of proceeds
that are fully and timely reinvested in the replacement home. Failure to
reinvest proceeds for a period of time does not permanently preclude exclusion
of the promissory note or installment sales contract. However, previously
received proceeds that were not timely reinvested remain countable resources to
the extent they are retained.
Example 1. On July 10, an SSI recipient received his quarterly payment of
$200 from the buyer of his former home under an installment sales contract. As
of October 31, the recipient has used only $150 of the July payment in connection
with the purchase of a new home. The exclusion of the unused $50 (and of the
installment contract itself) is revoked back to July 10. As a result, the $50
and the value of the contract as of August 1, are included in a revised
determination of resources for August and subsequent months.
Example 2. On April 10, an SSI recipient received a payment of $250 from the
buyer of his former home under an installment sales contract. On May 3, he
reinvested $200 of the payment in the purchase of a new home. On May 10, the
recipient received another $250 payment, and reinvested the full amount on June
3. As of July 31, since the recipient has used only $200 of the April payment
in connection with the purchase of the new home, the exclusion of the unused
$50 (and of the installment contract itself) is revoked back to April 10. As a
result, the $50 and the value of the contract as of May 1 are includable
resources. Since the recipient fully and timely reinvested the May payment, the
installment contract and the payment are again excludable resources as of June
1. However, the $50 left over from the previous payment remains a countable
resource.
(g) Interest payments. If
interest is received as part of an installment payment resulting from the sale
of an excluded home under a promissory note or similar installment sales
contract, the interest payments do not represent conversion of a resource. The
interest is income under the provisions of §§416.1102, 416.1120, and 416.1121(c).
(a) Household goods and personal
effects; defined. Household goods are defined as including household
furniture, furnishings and equipment which are commonly found in or about a
house and are used in connection with the operation, maintenance and occupancy
of the home. Household goods would also include the furniture, furnishings and
equipment which are used in the functions and activities of home and family
life as well as those items which are for comfort and accommodation. Personal
effects are defined as including clothing, jewelry, items of personal care,
individual education and recreational items such as books, musical instruments,
and hobbies.
(b) Limitation on household goods
and personal effects. In determining the resources of an individual (and
spouse, if any), household goods and personal effects are excluded if their
total equity value is $2,000 or less. If the total equity value of household
goods and personal effects is in excess of $2,000, the excess is counted
against the resource limitation.
(c) Additional exclusions of
household goods and personal effects. In determining the resources of an
individual (and spouse, if any) and in determining the value of the household
goods and personal effects of such individual (and spouse), there shall be
excluded a wedding ring and an engagement ring and household goods and personal
effects such as prosthetic devices, dialysis machines, hospital beds, wheel
chairs and similar equipment required because of a person's physical condition.
The exclusion of items required because of a person's physical condition is not
applicable to items which are used extensively and primarily by members of the
household in addition to the person whose physical condition requires the item.
(a) Automobile; defined. As
used in this section, the term automobile includes, in addition to
passenger cars, other vehicles used to provide necessary transportation.
(b) Limitation on automobiles.
In determining the resources of an individual (and spouse, if any), automobiles
are excluded or counted as follows:
(1) Total exclusion. One
automobile is totally excluded regardless of its value if, for the individual
or a member of the individual's household—
(i) It is necessary for employment;
(ii) It is necessary for the medical
treatment of a specific or regular medical problem;
(iii) It is modified for operation
by or transportation of a handicapped person; or
(iv) It (or other type of vehicle)
is necessary because of climate, terrain, distance, or similar factors to
provide necessary transportation to perform essential daily activities.
(2) Exclusion to $4,500 of the
market value. If no automobile is excluded under paragraph (b)(1) of this
section, one automobile is excluded from counting as a resource to the extent
its current market value does not exceed $4,500. If the market value of the
automobile exceeds $4,500, the excess is counted against the resource limit.
(3) Other automobiles. Any
other automobiles are treated as nonliquid resources and counted against the
resource limit to the extent of the individual's equity (see §416.1201(c)).
(c) Current market value. The
current market value of an automobile is the average price an automobile
of that particular year, make, model, and condition will sell for on the open
market (to a private individual) in the particular geographic area involved.
When counting the value of resources
an individual (and spouse, if any) has, the value of property essential to
self-support is not counted, within certain limits. There are different rules
for considering this property depending on whether it is income-producing or
not. Property essential to self-support can include real and personal property
(for example, land, buildings, equipment and supplies, motor vehicles, and
tools, etc.) used in a trade or business (as defined in §404.1066 of part
404), nonbusiness income-producing property (houses or apartments for rent,
land other than home property, etc.) and property used to produce goods or
services essential to an individual's daily activities. Liquid resources other
than those used as part of a trade or business are not property essential to
self-support. If the individual's principal place of residence qualifies under
the home exclusion, it is not considered in evaluating property essential to
self-support.
(a) General. When deciding
the value of property used in a trade or business or nonbusiness
income-producing activity, only the individual's equity in the property is
counted. We will exclude as essential to self-support up to $6,000 of an individual's
equity in income-producing property if it produces a net annual income to the
individual of at least 6 percent of the excluded equity. If the individual's
equity is greater than $6,000, we count only the amount that exceeds $6,000
toward the allowable resource limit specified in §416.1205 if the
net annual income requirement of 6 percent is met on the excluded equity. If
the activity produces less than a 6-percent return due to circumstances beyond
the individual's control (for example, crop failure, illness, etc.), and there
is a reasonable expectation that the individual's activity will again produce a
6-percent return, the property is also excluded. If the individual owns more than
one piece of property and each produces income, each is looked at to see if the
6-percent rule is met and then the amounts of the individual's equity in all of
those properties producing 6 percent are totaled to see if the total equity is
$6,000 or less. The equity in those properties that do not meet the 6-percent
rule is counted toward the allowable resource limit specified in §416.1205. If the
individual's total equity in the properties producing 6-percent income is over
the $6,000 equity limit, the amount of equity exceeding $6,000 is counted as a
resource toward the allowable resource limit.
Example 1. Sharon has a small business in her home making hand-woven rugs.
The looms and other equipment used in the business have a current market value
of $7,000. The value of her equity is $5,500 since she owes $1,500 on the
looms. Sharon's net earnings from self-employment is $400. Since Sharon's
equity in the looms and other equipment ($5,500) is under the $6,000 limit for
property essential to self-support and her net income after expenses ($400) is
greater than 6 percent of her equity, her income-producing property is excluded
from countable resources. The home is not considered in any way in valuing
property essential to self-support.
Example 2. Charlotte operates a farm. She owns 3 acres of land on which her
home is located. She also owns 10 acres of farm land not connected to her home.
There are 2 tool sheds and 2 animal shelters located on the 10 acres. She has
various pieces of farm equipment that are necessary for her farming activities.
We exclude the house and the 3 acres under the home exclusion (see §416.1212).
However, we look at the other 10 acres of land, the buildings and equipment
separately to see if her total equity in them is no more than $6,000 and if the
annual rate of return is 6 percent of her equity. In this case, the 10 acres
and buildings are valued at $4,000 and the few items of farm equipment and
other inventory are valued at $1,500. Charlotte sells produce which nets her
more than 6 percent for this year. The 10 acres and other items are excluded as
essential to her self-support and they continue to be excluded as long as she
meets the 6-percent annual return requirement and the equity value of the 10
acres and other items remains less than $6,000.
Example 3. Henry has an automobile repair business valued at $5,000. There
are no debts on the property and bills are paid monthly. For the past 4 years
the business has just broken even. Since Henry's income from the business is
less then 6 percent of his equity, the entire $5,000 is counted as his
resources. Since this exceeds the resources limit as described in §416.1205, he is
not eligible for SSI benefits.
(b) Exception. Property that
represents the authority granted by a governmental agency to engage in an
income-producing activity is excluded as property essential to self-support if
it is:
(1) Used in a trade or business or
nonbusiness income-producing activity; or
(2) Not used due to circumstances
beyond the individual's control, e.g., illness, and there is a reasonable
expectation that the use will resume.
Example: John owns a commercial fishing permit granted by the State
Commerce Commission, a boat, and fishing tackle. The boat and tackle have an
equity value of $6,500. Last year, John earned $2,000 from his fishing
business. The value of the fishing permit is not detemined because the permit
is excluded under the exception. The boat and tackle are producing in excess of
a 6 percent return on the excluded equity value, so they are excluded under the
general rule (see paragraph (a) of this section) up to $6,000. The $500 excess
value is counted toward the resource limit as described in §416.1205.
Nonbusiness property is considered
to be essential for an individual's (and spouse, if any) self-support if it is
used to produce goods or services necessary for his or her daily activities.
This type of property includes real property such as land which is used to
produce vegetables or livestock only for personal consumption in the
individual's household (for example, corn, tomatoes, chicken, cattle). This
type of property also includes personal property necessary to perform daily
functions exclusive of passenger cars, trucks, boats, or other special
vehicles. (See §416.1218
for a discussion on how automobiles are counted.) Property used to produce
goods or services or property necessary to perform daily functions is excluded
if the individual's equity in the property does not exceed $6,000. Personal
property which is required by the individual's employer for work is not
counted, regardless of value, while the individual is employed. Examples of
this type of personal property include tools, safety equipment, uniforms and
similar items.
Example: Bill owns a small unimproved lot several blocks from his home. He
uses the lot, which is valued at $4,800, to grow vegetables and fruit only for
his own consumption. Since his equity in the property is less than $6,000, the
property is excluded as necessary to self-support.
If the individual is blind or
disabled, resources will not be counted that are identified as necessary to
fulfill a plan for achieving self-support which is in writing, has been
approved by the Social Security Administration and is being pursued by the
individual.
(a) General. In determining
the resources of an individual (and spouse, if any), life insurance owned by
the individual (and spouse, if any) will be considered to the extent of its
cash surrender value. If, however, the total face value of all life insurance policies
on any person does not exceed $1,500, no part of the cash surrender value of
such life insurance will be taken into account in determining the resources of
the individual (and spouse, if any). In determining the face value of life
insurance on the individual (and spouse, if any), term insurance and burial
insurance will not be taken into account.
(b) Definitions—(1) Life
insurance. Life insurance is a contract under which the insurer agrees to
pay a specified amount upon the death of the insured.
(2) Insurer. The insurer is
the company or association which contracts with the owner of the insurance.
(3) Insured. The insured is
the person upon whose life insurance is effected.
(4) Owner. The owner is the
person who has the right to change the policy. This is normally the person who
pays the premiums.
(5) Term insurance. Term
insurance is a form of life insurance having no cash surrender value and
generally furnishing insurance protection for only a specified or limited
period of time.
(6) Face value. Face value is
the basic death benefit of the policy exclusive of dividend additions or
additional amounts payable because of accidental death or under other special
provisions.
(7) Cash surrender value.
Cash surrender value is the amount which the insurer will pay (usually to the
owner) upon cancellation of the policy before death of the insured or before
maturity of the policy.
(8) Burial insurance. Burial
insurance is insurance whose terms specifically provide that the proceeds can
be used only to pay the burial expenses of the insured.
(a) Burial spaces—(1) General.
In determining the resources of an individual, the value of burial spaces for
the individual, the individual's spouse or any member of the individual's
immediate family will be excluded from resources.
(2) Burial spaces defined.
For purposes of this section "burial spaces" include burial plots,
gravesites, crypts, mausoleums, urns, niches and other customary and
traditional repositories for the deceased's bodily remains provided such spaces
are owned by the individual or are held for his or her use. Additionally, the
term includes necessary and reasonable improvements or additions to or upon
such burial spaces including, but not limited to, vaults, headstones, markers,
plaques, or burial containers and arrangements for opening and closing the
gravesite for burial of the deceased.
(3) An agreement representing the
purchase of a burial space. The value of an agreement representing the
purchase of a burial space, including any accumulated interest, will be
excluded from resources. We do not consider a burial space "held for"
an individual under an agreement unless the individual currently owns and is
currently entitled to the use of the space under that agreement. For example,
we will not consider a burial space "held for" an individual under an
installment sales agreement or other similar device under which the individual
does not currently own nor currently have the right to use the space, nor is
the seller currently obligated to provide the space, until the purchase amount
is paid in full.
(4) Immediate family defined.
For purposes of this section immediate family means an individual's
minor and adult children, including adopted children and step-children; an
individual's brothers, sisters, parents, adoptive parents, and the spouses of
those individuals. Neither dependency nor living-in-the-same-household will be
a factor in determining whether a person is an immediate family member.
(b) Funds set aside for burial
expenses—(1) Exclusion. In determining the resources of an
individual (and spouse, if any) there shall be excluded an amount not in excess
of $1,500 each of funds specifically set aside for the burial expenses of the
individual or the individual's spouse. This exclusion applies only if the funds
set aside for burial expenses are kept separate from all other resources not
intended for burial of the individual (or spouse) and are clearly designated as
set aside for the individual's (or spouse's) burial expenses. If excluded
burial funds are mixed with resources not intended for burial, the exclusion
will not apply to any portion of the funds. This exclusion is in addition to
the burial space exclusion.
(2) Exception for parental
deeming situations. If an individual is an eligible child, the burial funds
(up to $1,500) that are set aside for the burial arrangements of the eligible
child's ineligible parent or parent's spouse will not be counted in determining
the resources of such eligible child.
(3) Burial funds defined. For
purposes of this section "burial funds" are revocable burial
contracts, burial trusts, other burial arrangements (including amounts paid on
installment sales contracts for burial spaces), cash, accounts, or other
financial instruments with a definite cash value clearly designated for the
individual's (or spouse's, if any) burial expenses and kept separate from
nonburial-related assets. Property other than listed in this definition will
not be considered "burial funds."
(4) Recipients currently
receiving SSI benefits. Recipients currently eligible as of July 11, 1990,
who have had burial funds excluded which do not meet all of the requirements of
paragraphs (b) (1) and (3) of this section must convert or separate such funds
to meet these requirements unless there is an impediment to such conversion or
separation; i.e., a circumstance beyond an individual's control which makes
conversion/separation impossible or impracticable. For so long as such an
impediment or circumstance exists, the burial funds will be excluded if the
individual remains otherwise continuously eligible for the exclusion.
(5) Reductions. Each person's
(as described in §§416.1231(b)(1)
and 416.1231(b)(2))
$1,500 exclusion must be reduced by:
(i) The face value of insurance
policies on the life of an individual owned by the individual or spouse (if
any) if the cash surrender value of those policies has been excluded from
resources as provided in §416.1230; and
(ii) Amounts in an irrevocable trust
(or other irrevocable arrangement) available to meet the burial expenses.
(6) Irrevocable trust or other
irrevocable arrangement. Funds in an irrevocable trust or other irrevocable
arrangement which are available for burial are funds which are held in an
irrevocable burial contract, an irrevocable burial trust, or an amount in an
irrevocable trust which is specifically identified as available for burial
expenses.
(7) Increase in value of burial
funds. Interest earned on excluded burial funds and appreciation in the
value of excluded burial arrangements which occur beginning November 1, 1982,
or the date of first SSI eligibility, whichever is later, are excluded from
resources if left to accumulate and become part of the separate burial fund.
(8) Burial funds used for some
other purpose. (i) Excluded burial funds must be used solely for that
purpose.
(ii) If any excluded funds are used
for a purpose other than the burial arrangements of the individual or the
individual's spouse for whom the funds were set aside, future SSI benefits of
the individual (or the individual and eligible spouse) will be reduced by an
amount equal to the amount of excluded burial funds used for another purpose.
This penalty for use of excluded burial funds for a purpose other than the
burial arrangements of the individual (or spouse) will apply only if, as of the
first moment of the month of use, the individual would have had resources in
excess of the limit specified in §416.1205 without
application of the exclusion.
(9) Extension of burial fund
exclusion during suspension. The exclusion of burial funds and accumulated
interest and appreciation will continue to apply throughout a period of
suspension as described in §416.1321, so long
as the individual's eligibility has not been terminated as described in §§416.1331 through
416.1335.