You asked us whether a transfer of a resource at less than fair market value should
be charged to the claimant, Sharon K~, for purposes of Supplemental Security Income
(“SSI”). You have also asked us to consider the implications resulting from the claimant's
ownership of a townhome, which was not her primary residence.
FACTS
In July 1986, Ms. K~ mother, Elizabeth H~, purchased a home located on Ridgelawn Street
(Property A) in Crown Point, Indiana. In October 1986, Ms. H~ executed a deed on Property
A, naming Ms. K~ and herself as joint tenants with right of survivorship. Ms. K~ and
her children moved into this home in October 1986, using it as their primary residence,
and paying Ms. H~ $275 in rent each month. Ms. H~ has never lived on the property.
In October 2000, Ms. K~ applied for SSI; her application was denied due to her resources
exceeding the maximum level for eligibility.
In September 2001, Ms. K~ decided to put Property A on the market, reportedly because
her children had grown and left home and she was having difficulty maintaining the
property. She and her mother listed the property for $110,000.
Ms. K~ reapplied for SSI in November 2001 and her application was granted. Property
A remained unsold at this time, with real estate market conditions worsening after
the September 11th attacks. However, Ms. K~ began to search for a new home, and in
January 2002, her mother purchased a newly constructed townhome for her on Aspen Court
(Property B) in Crown Point, Indiana, at the purchase price of $132,000.[1] Both Ms. K~ name and her mother's name appeared on the title to Property B, although,
according to her attorney, Ms. K~ initially had reservations about the implications
that this would have on her eligibility for SSI, Medicaid, and other sources of government
aid.
Ms. K~ continued to live in Property A. In June 2002, a third party contracted to
purchase the home for $105,000. On June 13, 2002, prior to the closing on Property
A, Ms. K~, having learned that there would be $60,000 in proceeds from the sale, and
that she would be entitled to $30,000 of it (given her 50% interest in Property A
as a joint tenant), executed a quitclaim deed that placed legal title slely in her
mother's name. According to the deed, Ms. K~ quitclaimed Property A to Ms. H~ “"in consideration of One Dollar ($1.00) and other valuable consideration.” Ms. K~ attorney explains that the claimant quitclaimed the property because she did
not feel she was entitled to any profit, since she did not contribute any money towards
the original purchase of the home in 1986. Based upon tax assessment records, the
fair market value of Property A was calculated as $144,300 as of the sale date.
Ms. K~ moved out of Property A and into Property B (as her primary residence) in July
2002. Her mother did not move into and has never resided in that new property. In
September 2002, the Agency issued a Notice of Planned Action, stopping Ms. K~ SSI
payments due to her transfer of her interest in Property A for less than fair market
value. The notice indicated that Ms. K~ was ineligible for SSI between July 2002 and
July 2005. Ms. K~ filed a request for reconsideration. Ms. K~ was also charged with
an overpayment between November 2001 and July 2002, given her co-ownership of two
properties (one of which was not her home) at the same time, and the fact that the
total value of Property B exceeded the resource limit. She subsequently requested
waiver of the overpayment on grounds of undue hardship.
DISCUSSION
For these reasons, we conclude that, absent a finding of undue hardship, the claimant's
June 2003 transfer of her interest in her home on Ridgelawn Street to her mother,
for less than fair market value, should be charged to the claimant as a transfer of
resources, for purposes of determining her eligibility for SSI. We also conclude that
the claimant's ownership of two properties, one of which was not her principal residence,
gave rise to an overpayment, and that, absent grounds for waiver, overpayment should
be charged to Ms. K~.
A. Ms. K~ transferred ownership of a resource for less than fair market value.
As of December 14, 1999, transferring ownership of a resource for less than fair market
value (FMV) can result in a period of ineligibility for SSI (for a period of up to
36 months). 42 U.S.C. § 1382b(c)(1)(A)(i); POMS SI 01150.001A. The number of months the person is ineligible depends on the dollar value of the
resource that was sold or given away. In the case of a resource held by an individual
in common with another person or persons in joint tenancy, tenancy in common, or similar
arrangement, the resource or the affected portion of such resource “shall be considered to be disposed of by the individual when any action is taken,
either by the individual or by any other person, that reduces or eliminates the individual's
ownership or control of such resource.” 42 U.S.C. § 1382b(c)(1)(D). FMV is defined as “the current market value (CMV) of a resource at the time the resource is transferred.
The CMV of a resource is the going price for which it can be reasonably expected to
sell on the open market in the geographic area involved. ” POMS SI 01150.005.B.1.
Ms. K~ held Property A in joint tenancy with her mother, and she transferred all of
her interest in the property by executing the quitclaim deed in June 2002, naming
her mother as the sole titleholder. See West. Annot. Ind. Code § 32-1-2-9 (Quitclaim
deed “transfers all the estate which the grantor could convey" by any other deed). The
quitclaim deed shows consideration for the transfer, stating that the deed was executed
in return for”One Dollar ($1.00) and other valuable consideration." It does not appear that Ms.
K~ received any other consideration. As such, Ms. K~ transferred a resource (her half
of Property A) for less than FMV.
B. Exceptions other than undue hardship do not apply.
There are exceptions to the general rule concerning transfers of resources for less
than FMV. The period of ineligibility for transfer of a home for less than FMV, for
example, will not apply if the individual transfers title to: his or her spouse; a
child under age 21; a child of any age who is blind or disabled; a child who was residing
in the transferor's home for at least two years immediately before the date the individual
becomes institutionalized; a child who provided care to the individual, thereby permitting
the individual to reside at home rather than in an institution; or to a sibling who
has ownership interest (including life estate and equitable ownership) in the home
and was residing in the home for at least one year immediately prior to the date the
individual was institutionalized. POMS SI 01150.122.A.1, A.2, and A3. As Ms. K~ transferred her interest in her home to her mother, and
not to any individuals described above, these exceptions for transfer of a home do
not apply.
Additionally, the transfer of a resource under FMV, exclusively for a purpose other
than to qualify for SSI benefits, may qualify as an exception. POMS SI 01150.125.A. There is a rebuttable presumption, when an individual gives away or sells resources
for less than FMV, that the resources were transferred for the purpose of establishing
or maintaining SSI. POMS SI 01150.125B. Such a presumption is rebutted only if the individual presents convincing evidence
that the resources were transferred exclusively for a purpose other than to become
or remain eligible for SSI, and, if the individual has some other purpose for transferring
the resource, but an expectation of establishing or maintaining SSI was also a factor,
the period of ineligibility would still apply. POMS SI 01150.125.B.
Here, it does not appear that Ms. K~ has rebutted the presumption with convincing
evidence that she transferred her interest in Property A to her mother for under FMV
exclusively for a purpose other than to become and remain eligible for SSI. Indeed,
in February 2002, four months prior to the sale of Property A (and while Property
A was still on the market), Ms. K~ expressed concern over adding her name to the title
on Property B, specifically with regard to maintaining her SSI eligibility. See Attachment
to Request for Waiver of Overpayment, Section I. She therefore was aware of the potential
impact that owning excess resources could have on her SSI eligibility. Moreover, the
timing of the quitclaim transaction, just prior to the closing on Property A, also
implies an intention to maintain eligibility.
Although Ms. K~ now claims that she intended, by making this transfer, to “repay” her mother for the shelter expenses she received from her mother when living in Property
A, this argument is undercut by the fact that she had been paying monthly rent to
her mother during the entire period of her residence in Property A and therefore,
had likely already covered her shelter expenses. In any event, even if this was a
reason behind the quitclaim transfer, as explained above, the evidence nonetheless
suggests that this was not the exclusive reason for doing so, and that she also expected
to maintain her SSI eligibility by quitclaiming Property A.
Still another exception may apply when all resources transferred for less than FMV
have been returned to the individual who transferred them, in the same month. POMS
SI 01150.124A . Such cases are treated as if the transfer had never occurred. Ms. K~ argues that
by adding her name to the title on Property B, she “effectively retrieved the asset which the Social Security Administration believes
she transferred-her one half interest in the home at 547 Ridgelawn. ” See Request for Waiver of Overpayment Recovery, Attachment, at II. Her transaction does
not fall within the exception, however, since she did not reacquire any interest in
Property A; she instead acquired legal title in Property B.
It does not appear that Ms. K~ intended, through execution of the quitclaim deed,
for her mother to hold the ½ interest in constructive trust, as repayment for the
purchase of Property B. Even if such an equitable agreement did exist (and no evidence
suggests this), it is unlikely that an unwritten agreement for the purchase of real
property would be enforceable.
When it has been determined that no other exceptions apply, the final exception, that
of undue hardship, should be considered. POMS SI 01150.126.A. Undue hardship exists if the individual alleges that failure to receive SSI payments
would deprive her of food or shelter (i.e., subject to eviction from current residence
and no other affordable housing available) and that her total available funds (income
and liquid resources) do not equal or exceed the full Federal Benefit Rate (FBR) plus
applicable federally administered state supplement. POMS SI 01150.126.B. We recommend additional development to determine whether the undue hardship exception
applies.
C. Ms. K~ is liable for overpayment during the period in which she simultaneously
owned Properties A and B, unless grounds for waiver of the overpayment are established.
As a result of owning Properties A and B during the period from February 2002 to June
2002,[2] ] Ms. K~ owned excess resources, since the equity value in Property B (non-home)
exceeded the resource limit. Property A, her home, would be excluded as a resource.
She should be charged with an overpayment, unless grounds for waiver of the overpayment
(claimant was without fault in causing overpayment, and recovery of overpayment would
be against equity or good conscience) are found. See POMS SI 02260.001.1. Accordingly, we recommend further development to determine the applicability of
waiver provisions.
CONCLUSION
For these reasons, we conclude that, absent a finding of undue hardship, the claimant's
June 2003 transfer of her interest in her home on Ridgelawn Street to her mother,
for less than fair market value, should be charged to the claimant as a transfer of
resources, for purposes of determining her eligibility for SSI. We also conclude that
the claimant's ownership of two properties, one of which was not her principal residence,
gave rise to an overpayment, and that, absent grounds for waiver, overpayment should
be charged to Ms. K~.
Sincerely,Kim Leslie B~
Kim Leslie B~Regional Chief Counsel, Region V
Social Security Administration
By: Jessie A. W~-G~
Assistant Regional Counsel