When there is a valid transfer, the individual no longer owns the property. A valid transfer is based on a legally binding agreement. If the individual no longer owns the property, it is not counted as a resource for SSI purposes. If a transfer is not valid, the individual still owns the property and it is counted as a resource for SSI purposes.

Resource determinations are based on the resources an individual owns on the first moment of the month. Therefore, when property is validly transferred, it no longer counts as a resource as of the first moment of the month following the transfer (SI 01110.600).

Valid transfers of resource ownership may occur through any of the following types of transactions:

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  Sale of property;

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  Trade or exchange of one property for another;

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  Spend-down of cash;

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  Giving away cash;

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  Transferring any financial instrument (e.g., stocks, bonds);

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  Giving away property (including adding another person's name as an owner of the property);

Spending cash is a type of transfer. Assume, absent evidence to the contrary, that an individual gets fair market value when they spend cash resources. See SI 01150.007 for instructions for developing spend-down of cash.

A transfer of income in the month it is received is considered a transfer of a resource if the income would have been considered a resource in the following month. Although, under the first of the month rule, receipt of income would not be counted toward the beneficiary's SSI resource limit until the month after it is received, such income meets the regulatory definition of a resource the month it is received. As defined in SI 01110.100B, resources include cash or any other property that an individual owns and could convert to cash to be used for their support and maintenance.

Example: Smith receives an inheritance of $5,000 in May, 2006. In the same month, they transfer the $5,000 to their brother. The $5,000 inheritance is counted as unearned income in May. It is also considered to be a transfer of a resource in May. Despite the fact that the inheritance would not be counted as a resource unless retained until June, we consider the transfer subject to the transfer of resource penalty because it meets the definition of a resource in the month of receipt.

An individual may allege not being the owner of a resource that is in their name. If the individual “takes their name off” the resource, it is necessary to develop whether this was a resource transfer. When developing the transfer, follow the general rule that if the resource would have been countable under SSI resource counting rules, then “taking the name off” the resource would be a resource transfer. However, see SI 01120.010 for the factors that make property a resource and SI 01120.020 for transactions that involve agents if the individual alleges not owning the resource.

During this period, transferring a resource for less than fair market value could result in SSI ineligibility for up to 24 months. Effective 4/1/88, P.L. 100-203 authorized SSA to waive application of the penalty for months in which it would cause undue hardship.

Public Law 100-360 eliminated the SSI penalty for resources transferred on or after 7/1/88. Therefore, there is no transfer penalty for resources transferred between 7/1/88 and 12/13/99. However, this law established a requirement for SSA to inform applicants and recipients that a transfer of resources for less than fair market value may affect Medicaid eligibility. It also established a requirement for SSA to notify State Medicaid agencies about transfers of resources. See SI 01150.100 for instructions for processing transfers made before 12/14/99.

Public Law 106-169 (Foster Care Independence Act of 1999) established a period of SSI ineligibility of up to 36 months for an individual who transfers resources for less than fair market value. This provision is effective for transfers made on or after 12/14/99. SSA is still required to notify applicants and recipients about the potential effect of resource transfers on Medicaid eligibility. And SSA is still required to notify State Medicaid agencies about transfers of resources. See SI 01150.110 for instructions for processing transfers made on or after 12/14/99.

It is necessary to ask every SSI applicant whether any resources were transferred since the look-back date which is 36 months before the date of filing for SSI. If resources were transferred since the look-back date, it is necessary to develop the transfer to determine the effect on SSI eligibility. See SI 01150.110C. for a discussion of the look-back date. And, SSA is required to forward information about the transferred resource to the State Medicaid agency unless the SSI claim is being denied. See SI 01150.012 for instructions about notifying the State Medicaid agency.

When redetermining SSI eligibility, it is necessary to ask whether any resources were transferred since the last review (i.e., the date the claim was filed, the date of the PERC or the previous redetermination). In posteligibility, we develop any transfer that occurs while the individual is eligible for SSI. Absent evidence to the contrary, we assume that a transfer made prior to the last review has already been developed. However, if an undeveloped transfer is uncovered that occurred prior to the last review, it must be developed. Development of such a transfer is not limited to the date of the last review. However, applying the period of ineligibility is limited under the rules of administrative finality unless there is a determination of fraud (SI 04070.020) or similar fault (SI 04070.020). Also, see SI 01150.110C for an example of a posteligibility transfer and the effect of administrative finality.

REMINDER: Previously undisclosed resources may effect SSI eligibility prior to the transfer (i.e., the individual may have had excess resources prior to the transfer).

Obtain the individual's statement either signed or recorded on a Report of Contact page that explains:

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  The nature of the transfer (sold, given away, traded, etc.);

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  The method of transfer (sold on open market, transferred without compensation, etc.);

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  The date of the transfer;

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  A description of the transferred resource;

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  The amount of cash transferred or the current market value (CMV) of the transferred resource;

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  The amount and type of compensation received;

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  Any remaining ownership interest.

Because an individual may not be sure of the exact date of the transfer, verify the date and validity of a transfer that is alleged to have occurred on 12/1/99 or later. To verify, obtain copies of available evidence of the transaction such as:

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  Bills of sale;

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  Receipts for prepayment of rent;

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  Signed statement by the person to whom the property was transferred;

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  A signed statement by the transferor, if the evidence above cannot be obtained and the sale was on the open market (not to a relative).

For transfers alleged to have occurred prior to 12/1/99, verify only if the individual's allegation is questionable or the individual cannot remember the date of the transfer.

Document the file with your determination concerning the date and validity of the transfer.

After determining that a valid transfer has occurred, choose the appropriate next step.

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  Transfer Before 12/14/99: Follow the instructions in SI 01150.100 for processing the case.

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  Transfer On or After 12/14/99: Follow the instructions in SI 01150.005 to determine whether the individual received fair market value for the transferred resource.