Expanding Foundations Resources

Goal and Objectives Course Goal: Participants will accurately evaluate resources for Adult Financial customers Objectives: Determine which resources are countable and which are exempt Determine the countable value of resources for an applicant/customer Calculate penalty periods for Transfers Without Fair Consideration Demonstrate ability to data enter resources into CBMS accurately including disposition

RESOURCE RACE!

Resources are real and personal property The Basics Definition: Resources are real and personal property Non-Liquid Resources Difficult to convert into cash Examples: homes, vehicles, land, valuable collections, etc. Liquid Resources Easy to convert into cash Examples: checking and savings accounts, IRA accounts, etc.

The Basics Most resources are countable. Resources owned by the customer, customer’s spouse, and customer’s sponsor(s) are all counted All countable resources must be less than the resource limit(s) for the customer to be eligible

Resource Limits $2,000 for: $3,000 for: A married customer An unmarried customer A married customer $2,000 for: $3,000 for:

Availability of Resources If a customer is actively attempting to sell, liquidate, or legally acquire a resource, the county department shall not delay action on an application As with income, customers must attempt to access all resources available to them

Availability of Resources Benefits should not be adjusted until the resources become available to the customer Verify that the customer is attempting to access the resource If the customer refuses or fails to make reasonable effort to secure the resource, it should be considered countable

Exempt Resources One vehicle per household Household goods and personal effects Primary residence customer resides in or lived in prior to becoming institutionalized Retroactive SSI or SSA retirement or SSA disability lump sums

Exempt Resources Monies from a bona fide loan Income tax refunds Proceeds from sale of primary home if funds are intended to purchase or build a replacement home Proceeds from fire or casualty insurance

More Exempt Resources Irrevocable pre-paid burial funds Revocable burial funds Burial spaces required to meet the needs of immediate family Life insurance with face value of $1,500 or less (all policies combined) Exempt up to $1,500 each for customer and the customer’s spouse OAP allows for higher face values Property essential to customer’s self support Non-business property producing goods necessary for daily activities Non-business income producing property

Oil and Mineral Rights EXEMPT if located on the land of the primary residence The value of this resource can be obtained by Using the Actual Value listed on the property assessment by the County Assessor Written statement or collateral contact with companies who are in the business of selling, leasing, or buying oil/mineral rights

Income Producing Property The income producing property rule: Up to $6,000 of the equity value is exempt as a resource as long as the net annual income is at least 6% of the excluded equity value

Income Producing Property Example Mr. Smith has mineral rights in North Dakota The actual value obtained from the county assessor is $6,500 Mr. Smith provided a 1099 from last year listing income from royalties at $500

Income Producing Property Example $6,000 Excludable value of resource .06 Percentage of return $360 - the amount of income a $6,000 resource must produce to be excluded Since the rate of return is more than the 6%, $6,000 of the equity value of the resource can be excluded. So, the countable value of Mr. Smith’s mineral rights is $500

Countable Resources Countable resources include but are not limited to: Bank Accounts Investment Accounts Certificates of Deposit Stocks and Bonds Mutual Funds IRAs and other Retirement Accounts Secondary vehicles Some life insurance and burial plans Mortgages or promissory notes that can be converted to cash Cash Secondary property which does not meet an income producing exemption Real property out of state

Shared Bank Accounts The balance in a joint account shall be considered available to the customer in proportion to the number of persons on the account unless: The co-owner of the account is the customer’s legal fiduciary (guardian, conservator, power of attorney, etc.) OR The co-owner is on the account to assist the customer with paying bills, purchasing groceries, etc.

Life Insurance Exemption applies individually to the customer and spouse as applicable Term life policies should be checked to determine if cash value exists If the total face value of all life insurance policies owned an individual is $1,500 or less, the cash value of the life policies is exempt

Life Insurance This exemption only applies to policies which were purchased more than 48 months prior to the eligibility determination date with no additional contributions made in the past 48 months For OAP only: If the customer’s total face value of all life insurance is more than $1,500 and the cash value of all the life policies is under $100,000, the cash value of those policies can also be exempted

Burial Plans Revocable burial accounts and burial contracts are exempt up to $1,500 in value each for the customer and their spouse Revocable burial funds over the $1,500 limit are countable as a resource Irrevocable burial funds are not countable

Types of Burial Funds Burial contracts are pre-paid final arrangements established at a funeral home, cemetery, crematory, or mortuary The paid-up amount of the contract, not the face value, is counted toward the $1,500 exemption

Types of Burial Funds Burial accounts or trusts are made with a bank, savings and loan association, or with a trust company These funds are specifically set aside for burial and must state as such on the account. They cannot be combined with other types of funds Are revocable during the lifetime of the customer and will be paid by the trustee only upon death of the customer for the purpose of covering burial expenses

Trusts Funded with Resources Examples: Pooled Trusts Third Party Trusts Disability Trusts Family Trusts There are several types of trusts that are funded with resources The total balance of a trust account is considered as available unearned income to customer Irrevocable burial trusts are exempt as a resource and not counted as income

Resource Summary Data Entry Enter into CBMS A bank account into CBMS A burial asset View Wrap Up

How Much Treasure? A Resource Counting Game……. Is your customer eligible? Exempt $2,000 Countable $3,000

A Transfer Without Fair Consideration (TWFC) is… A Transfer of a resource to another person at a price that is below fair market value and was Voluntary, Made during the 36 months prior to application, and For the purpose of becoming eligible for assistance; or Made while receiving Adult Financial program benefits

What is the Penalty for a TWFC? The value of the resource minus any encumbrances (a claim, like a mortgage or loan) is used to calculate a penalty period based on how many months of benefits the resource is valued 1 month of benefits: AND-SO $217 AND-CS $750 OAP $788

TWFC Penalty Calculation Add to the program’s grant standard any monthly medical costs, including health insurance premiums, for which the customer is responsible to pay This is the TWFC monthly penalty value AF Grant Standard Monthly Medical Costs TWFC Monthly Penalty Value

Calculating the Penalty Period TWFC Monthly Penalty Value Value of Resource # Months of Ineligibility

Formula for TWFC $ Value of Resource — Encumbrances Value Received for Resource = TWFC Amount ÷ Adult Financial Grant Standard + Monthly Medical Costs Penalty Period Rounded Down to Nearest Whole Number

When Does the Penalty Period Begin? The Penalty Period begins on the first day of the month that the transfer occurred Example: An Old Age Pension applicant gave $5,000 to his son on January 10, 2018. He has a monthly medical expense of $134 which is his Medicare Premium $788 + $134 = $922 $5,000 ÷ $922 = 5.42 months The customer is ineligible for Old Age Pension for 5 months beginning January 1, 2018.

Deciding When To Impose a Penalty Period The county department shall make a rebuttable presumption that the transaction was made for the purpose of becoming or remaining eligible for Adult Financial program benefits The customer shall be given the opportunity to disprove the presumption. The presumption shall be nullified if the customer can demonstrate to the county department that the transfer was for another purpose

Hardship There may be circumstances related to the transfer of resources that indicate that the customer was experiencing hardship just prior to the transfer Examples: Unemployment resulting in inability to pay for food, shelter and bills Accident or severe illness requiring money to pay for medical care/services Other hardship deemed reasonable by the county department using PPP

Data Entry for Transfer Without Fair Consideration Dispose of a resource for a Transfer Without Fair Consideration View Wrap Up for the Period of Ineligibility

Data Entry of Old Age Pension Data enter a case into CBMS for a couple. Wife is applying for Old Age Pension Husband is applying for Medical Assistance only View income deeming in Wrap Up Understand how to run the case to prevent income deeming