Effective Dates: 08/06/2009 - Present Previous | Next

TN 9 (08-09)

HI 03030.020 Resource Exclusions

Complete Katrina instructions are available here .

A. Policy for resource exclusions

We do not count all of an applicant’s resources when we determine Part D Extra Help eligibility.

For purposes of determining countable resources for Medicare Part D Extra Help eligibility, we apply the exclusions applicable to the SSI program, unless a specific exception is noted in HI 03030.020B. (in this section). SSI resource exclusions applicable to Medicare Part D Extra Help determinations include the following:

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    The applicant’s home. For purposes of this exclusion, a home is any property that the applicant (and spouse, if any) has an ownership interest which serves as the principal place of residence. This property includes the shelter where an applicant resides, the land on which the shelter is located, and outbuildings, see SI 01130.100 (The Home);

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    Property of a trade or business, which is essential to the means of self-support, see SI 01130.501 (Essential Property Excluded Regardless of Value or Rate of Return);

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    Non-business property, which is essential to the means of self-support, see SI 01130.502 (Essential Property Excluded up to $6,000 Equity Regardless of Rate of Return) and SI 01130.503 (Essential Property Excluded up to $6,000 Equity If it Produces a 6 Percent Rate of Return);

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    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, SI 00830.830 (Indian-Related Exclusions);

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    Life insurance owned by an applicant (and spouse, if any) to the extent excluded, see SI 01130.300 (Life Insurance).

    NOTE: Effective with Extra Help applications filed January 1, 2010 or after, the cash surrender value (CSV) of life insurance policies will not be counted as a resource;

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    Restricted allotted Indian lands, SI 01130.150 (Interests of Individual Indians in Trust or Restricted Lands);

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    Payments or benefits provided under a Federal statute, other than Title XVIII of the Act where exclusion is required by such statute, when such payments or benefits are retained in the month after the month received, see SI 01130.060 (Exclusions Under Other Federal Statutes);

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    Disaster relief assistance when such assistance is retained in the month after the month received, see SI 01130.620 (Disaster Assistance);

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    Burial spaces, SI 01130.400 (Burial Spaces);

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    Title XVI or Title II retroactive payments, when such payments are retained in the month after the month received, see SI 01130.600 (Retroactive Supplemental Security Income (SSI) and Retirement, Survivors and Disability (RSDI) Payments);

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    Housing assistance, when such payments are retained in the month after the month received, see SI 01130.630 (Cash and In-Kind Items Received for the Repair or Replacement of Lost, Damaged, or Stolen Excluded Resources);

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    Refunds of Federal income taxes and advances made by an employer relating to an earned income tax credit, when such payments are retained in the month after the month received, SI 01130.676 (Federal Tax Refunds and Advanced Tax Credits for SSI Resources);

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    Payments received as compensation incurred or losses suffered, as a result of a crime, when such payments are retained in the month after the month received, see SI 01130.665 (Victims' Compensation Payments);

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    Relocation assistance from a State or local government when such payments are retained in the month after the month received, see SI 01130.670 (Relocation Assistance Payments).

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    Dedicated financial institution accounts, see SI 01130.601 (Dedicated Accounts for Past-Due Benefits Due to Individuals Under 18 Who Have a Representative Payee);

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    A gift to, or for the benefit of, an applicant who has not attained 18 years of age and who has a life-threatening condition, from an organization described in section 501(c)(3) of the Internal Revenue Code of 1986, which is exempt from taxation under section 501(a) of such Code, SI 01130.689 (Gifts to Children with Life-Threatening Conditions);

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    Funds received and conserved to pay for medical or social services; and

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    Cash and in-kind items received for the repair or replacement of lost, damaged, or stolen excluded resources, see SI 01130.630 (Cash and In-Kind Items Received for the Repair or Replacement of Lost, Damaged, or Stolen Excluded Resources).

NOTE: Unless identified as exceptions, other SSI exclusions not listed in this section are also considered exclusions for purposes of determining eligibility for the Medicare Part D Extra Help.

B. Policy for exceptions to SSI resource rules

1. Non-liquid resources

Non-liquid resources, other than real property, are not resources for purposes of determining Medicare Part D Extra Help eligibility. Non-liquid resources are defined in HI 03030.001.

2. Plan for Achieving Self-Support (PASS)

We will not approve a PASS whose sole purpose is to exclude income and resources in order to qualify for the Medicare Part D Extra Help.

3. Burial fund exclusion

a. Amount of exclusion

For purposes of determining Medicare Part D Extra Help eligibility, if the applicant alleges that he or she expects to use some of his or her resources for funeral or burial expenses, $1,500 is excluded from that applicant’s countable resources. For a married couple who live together, we exclude up to $3,000 ($1,500 for each member who alleges that he or she expects to use some of his or her resources for funeral or burial expenses).

We do not ask the applicant for the actual value of the funds that he or she expects to use. Therefore, the exclusion is always $1,500; unless the applicant alleges that he or she does not expect to use any of his or her resources for burial or funeral expenses.

b. Effect of other burial arrangements on this exclusion

The $1,500 burial fund exclusion is not reduced by the value of any burial contract the applicant owns. Furthermore, the $1,500 burial fund exclusion is not affected by the $1,500 life insurance exclusion. The burial spaces exclusion for Extra Help is the same as for the SSI program, i.e., burial space items are excluded regardless of value, see SI 01130.400.

NOTE: If the applicant alleges on the Extra Help application that he or she plans to use any of his or her resources for funeral or burial expenses, we exclude $1,500 without further development. For a married couple living together, we exclude $1,500 each, if both members of the couple allege that resources will be used for funeral or burial expenses.

4. Transfer of resources

Transfers of resources are not considered for purposes of determining Medicare Part D Extra Help eligibility. Therefore, it is not necessary to ask an applicant if resources have been transferred. If the applicant alleges a transfer of resources, do not develop the transfer if the transfer appears to be valid. Absent evidence to the contrary, assume that the alleged transfer is valid. However, if a transfer was not valid, the applicant still owns the resource and it may be countable for purposes of determining Medicare Part D Extra Help eligibility.

5. Effect of Public Law (P.L.) 110-275 (The Medicare Improvements for Patients and Providers Act (MIPPA) of 2008) on counting the cash surrender value (CSV) of life insurance policies

Public Law 110-275 MIPPA, changes the rules for the cash surrender value of a life insurance policy as a resource for: for Medicare Part D Extra Help applications. The CSV will not be counted as a resource for: applications effectively filed on or after January 1, 2010; and initial determinations that do not become effective before January 1, 2010. An example of an initial determination that becomes effective on or after January 1, 2010 is a periodic or cyclical redetermination initiated in August 2009. However, the CSV is countable as a resource for Extra Help applications effectively filed December 31, 2009, or earlier. The instructions in this section cover both time periods until all applications for 2009 or earlier have been processed.

C. Policy for resource exclusions under the American Recovery and Reinvestment Act (ARRA) of 2009

1. One-time $250 economic recovery payment resource exclusion

On February 17, 2009, the President signed the ARRA of 2009. This law provides for a one-time payment of $250 for certain individuals who, for any month during the 3-month period prior to the month of enactment of the law, were entitled to Social Security, Railroad Board, or Department of Veterans Affairs benefits.

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    The one-time $250 payment is not counted as a resource for nine months following the month of receipt when determining Medicare Part D Extra Help eligibility.

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    For purposes of applying the one-time payment exclusion, assume that the full $250 has been retained when determining the individual’s resources for the nine months following the month of receipt. It is not necessary to ask the individual if these funds have been retained.

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    The bulk of these payments have been issued as of May 2009. Under the law, no payments can be disbursed after December 31, 2010. If a $250 payment is received in December 2010, it is excluded from resources through September 2011.

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    For information on applying this exclusion during the verification process, see HI 03035.010 and HI 03035.020.

EXAMPLE: If the applicant receives the one-time $250 payment in May 2009, the funds are not considered a resource in the month they are received and are excluded from resources from June 2009, through February 2010. If these funds are retained, they are countable as a resource beginning in March 2010.

2. The $25 per week increase in unemployment compensation is not excluded

ARRA provides for an additional $25 per week in unemployment compensation for individuals in States that agree to participate in this program change.

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    If the State pays an additional $25 per week in an individual’s unemployment check, this amount is not excluded from income or resources for purposes of determining Medicare Part D Extra Help eligibility.

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    The additional $25 is treated as part of the individual’s unemployment compensation which is countable as a resource, if retained, in the month after the month of receipt.

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    For more information about unemployment compensation, see SI 00830.230.

3. The Making Work Pay Tax Credit resource exclusion

ARRA provides for a Making Work Pay Tax Credit of up to $400 per year, for 2009, and 2010 (up to $800 per year for joint tax returns).

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    This tax credit is provided to working individuals by reducing the amount of income tax withholding that is deducted from their pay checks.

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    The increase in take home pay that results from the tax credit is not counted as a resource in the month it is received, and is excluded from resources for the following 2 months.

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    It is not feasible to determine the actual amount an individual receives each month from this tax credit. Therefore, for purposes of determining the excludable resource amount for the Medicare Part D Extra Help, we assume that the individual receives $35 per month from the Making Work Pay Tax Credit for each month a paycheck was received. We assume that a married couple receives $70 per month from the tax credit for each month that both members of the couple received wages.

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    If the individual or spouse has more than one employer, assume that the tax credit is $35 per employer per month. For example, if the individual has two jobs and the spouse has one job, the excludable amount of resources would be $105 per month (3 times $35.)

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    For purposes of applying this exclusion, assume that the tax credit has been retained when determining the individual’s resources. Therefore, it is not necessary to ask the individual if these funds have been retained.

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    It is not necessary to develop this exclusion, unless the resources of the individual or couple are over either the lower or higher resource limit for Medicare Part D Extra Help.

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    Individuals who have very low wages may not receive their tax credit through an increase in their take home pay. Self-employed individuals will not receive the tax credit in take home pay. These individuals can get the tax credit as part of their tax refund when they file their income tax returns for 2009, and 2010. If the tax credit is received in their tax refund, it is excluded from resources for the month of receipt, and the following 2 months. If the individual also received the $250 economic recovery payment, the tax credit is reduced by that amount. To determine the excluded amount, ask the individual for the amount of the tax credit he or she received and exclude the tax credit for the month of receipt, and the following 2 months.

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    For information on applying this exclusion during the verification process, see HI 03035.010 and HI 03035.020.

EXAMPLE: Mr. Smith files for Medicare Part D Extra Help in June 2009. On his application he alleges wages in 2009, and reports no stop date for working. His alleged resources are $6,680, which is over the 2009 lower limit of $6,600. Because his resources are over the limit and Mr. Smith has wages, the CR develops the resource exclusion for the Making Work Pay Tax Credit. The amount of money in his pay checks that is due to the tax credit is not countable as a resource, for the month it is received, and the following 2 months. Mr. Smith did not allege a stop date for work on his application, so we assume that he got paid in all months and received the tax credit in his pay checks in April, May, and June. Therefore, in June 2009, we would exclude $105 from resources ($35 for April, $35 for May, and $35 for June), which brings his countable resources below the $6,600 lower limit.

EXAMPLE: Ms. Wilson, who receives T2 benefits and is self-employed, files for Medicare Part D Extra Help in June 2010. Based on her 2009 federal income tax return, she receives a $150 Making Work Pay tax credit, as part of her refund in April 2010. Because she also received the $250 economic recovery payment, the full $400 tax credit is reduced by $250. The $150 tax credit she received is not countable as a resource in April 2010, when she received the refund and is excluded from resources in May and June 2010, for purposes of determining Medicare Part D Extra Help eligibility.

4. The Filipino Veterans Equity Compensation Fund resource exclusion

ARRA established the Filipino Veterans Equity Compensation Fund, which offers a one-time payment to eligible veterans who served in the Philippines armed forces during World War II.

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    To receive the payment, the veteran must file a claim with the U.S. Department of Veterans Affairs, within one year of the date of the ARRA law (from February 17, 2009, through February 16, 2010), and must meet the military service requirements set forth in the ARRA.

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    Filipino veterans who are citizens of the United States are eligible for a one-time payment of $15,000 and Filipino veterans who are non-citizens are eligible for a one-time payment of $9,000. A surviving spouse may receive this payment, but only if the veteran filed for it prior to death.

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    This one-time payment is excluded from resources and income for purposes of determining Medicare Part D Extra Help eligibility whether, received by the veteran or by the surviving spouse.

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    ARRA did not set a time limit on the resource exclusion for this payment. These funds are excludable for as long as they are retained.

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    When making a Medicare Part D Extra Help resource determination, accept the individual’s allegation about the amount of funds retained from this special payment and exclude that amount. If the individual is unable to provide an allegation about the amount of funds retained from the special payment, develop the excluded amount using the instructions for commingled funds in SI 01130.700.

NOTE: Direct all public inquiries related to applying or obtaining eligibility requirements to the Department of Veterans Affairs Office at 1-800-827-1000 or to their website: www.va.gov (Office locator listed).

For more information about income exclusions for Medicare Part D Extra Help, see HI 03020.050.

For information on applying this exclusion during the verification process, see HI 03035.020, and HI 03035.010.

D. Policy for resource exclusion under the Economic Stimulus Act of 2008

On February 13, 2008, the President signed the Economic Stimulus Act of 2008. This law provides for stimulus payments of up to $600 per taxpayer ($1,200 for a joint tax return) and $300 for each minor child in the household.

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    The stimulus payments are not counted as a resource for two months following the month of receipt, when determining eligibility for the Medicare Part D Extra Help.

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    The stimulus payments were issued starting in May 2008, and distribution completed by December 31, 2008. Assuming a payment issued in late December 2008, would be received no later than January 2009, conserved stimulus funds retained after March 2009, are countable as a resource.

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    For information about applying this exclusion during the resource verification process, see HI 03035.020.

EXAMPLE: If an applicant received a stimulus payment in May 2008, exclude it from any resources reported to SSA in June 2008, or July 2008. If any of the funds are retained, count them as a resource starting in August 2008.

E. Policy for resource exclusions for Medicare Part D Extra Help determinations applicable to victims of hurricane Katrina and presidentially declared disasters

The SSI resource exclusions applicable to victims of Hurricane Katrina and other presidentially declared disasters are also applicable for purposes of Medicare Part D Extra Help eligibility determinations for victims of Hurricane Katrina. See SI 01130.630A.4. (Cash and In-Kind Items Received for the Repair or Replacement of Lost, Damaged, or Stolen Excluded Resources).

F. References

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    SI 01130.050 Guide to Resources Exclusions

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    SI 01130.060 Exclusions Under Other Federal Statutes

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    SI 01130.100 The Home

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    SI 01130.150 Interests of Individual Indians in Trust or Restricted Lands

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    SI 01130.300 Life Insurance

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    SI 01130.400 Burial Spaces

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    SI 01130.501 Essential Property Excluded Regardless of Value or Rate of Return

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    SI 01130.502 Essential Property Excluded up to $6,000 Equity Regardless of Rate of Return

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    SI 01130.600 Retroactive Supplemental Security Income (SSI) and Retirement, Survivors and Disability (RSDI) Payments

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    SI 01130.601 Dedicated Accounts for Past-Due Benefits Due to Individuals Under 18 Who Have a Representative Payee

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    SI 01130.620 Disaster Relief

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    SI 01130.630 Cash and In-Kind Items Received for the Repair or Replacement of Lost, Damaged, or Stolen Excluded Resources

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    SI 01130.665 Victims' Compensation Payments

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    SI 01130.670 Relocation Assistance Payments

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    SI 01130.676 Federal Tax Refunds and Advanced Tax Credits for SSI Resources

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    SI 01130.689 Gifts to Children with Life-Threatening Conditions

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    SI 00830.830 Indian-Related Exclusions

To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0603030020
HI 03030.020 - Resource Exclusions - 08/06/2009
Batch run: 02/04/2025
Rev:08/06/2009