If the agreement states that the receiver of the property will provide ISM for the
life of the eligible individual, you should determine the total value of ISM using
the table in SI 01150.005F. Multiply the yearly CMV of the ISM provided by the figure in the “Years of Life Remaining”
column which corresponds to the age (or next lower age) of the eligible individual
as of the last birthday at the time the resource was transferred.
Example 1: Total value of ISM results in FMV compensation
Payne transferred nonhome real property valued at $185,000 to their sibling. As compensation,
their sibling agreed to provide Payne with room and board in the sibling's home for
the rest of Payne's life. ISM development showed that their sibling's total household
expenses were $1,500 per month. The household consisted of 3 persons, including Payne
who was age 53 at the time of the transfer. The CMV of the ISM was $6,000 per year
($1,500/3 = $500 per month X 12 months = $6,000). Then, $6,000 X 31.61 (average years
of life remaining at age 50) = $189,660 compensation. In this case, Payne received
FMV for the transferred resource. We do not count ISM because the individual prepaid
for their own food and shelter with the value of the home they transferred. For procedure
on determining an individual’s contribution toward household operating expenses, see
SI 00835.480D.
Example 2: Total value of ISM results in uncompensated value
Assume the same case facts as Example 1 except that Payne is 80 years old at the time of the transfer. As in Example 1 the ISM is worth $6,000 per year. At 80 years of age the life expectancy table indicates
7.16 years. Multiplying 7.16 years times $6,000 results in compensation of $42,960.
In this case there is uncompensated value of $142,040 ($185,000 minus $42,960). Therefore,
Payne is subject to a period of ineligibility for SSI because they transferred the
house for less than FMV.