TN 113 (10-23)

SI 00835.360 When to Charge In-Kind Support and Maintenance (ISM) from Third Party Vendor Payments

A. Definitions of a third party, vendor, and third party vendor payments

1. Third party

A third party is any person or entity other than the eligible individual, couple, or the vendor.

2. Vendor

A vendor is a:

  • seller of goods or services (e.g., a merchant, retailer, contractor); or

  • person or entity who takes the place of the vendor in a transaction by paying the vendor for goods or services (e.g., a credit card company, bank, or other creditor).

3. Third party vendor payment (TPVP)

A third party vendor payment (TPVP) is a payment made directly to a vendor by a third party for goods or services the vendor provided to an eligible individual, or couple.

B. Policy for when to charge ISM for a TPVP

In-kind support and maintenance (ISM) from a TPVP is unearned income when an applicant or claimant first has use of the item. For more information on ISM, refer to SI 00835.310B.

1. Exception for TPVP as a gift

ISM resulting from a TPVP is income in the month of the payment, rather than when an applicant or claimant first has use of the ISM, if:

  • the applicant or claimant obtains food or shelter using their own credit; and

  • a third party later makes a vendor payment for the items as a gift.

C. Procedure for developing TPVP in initial claims and Post Entitlement (PE) situations

1. Other applicable procedures

If the applicant or claimant receives a gift from a TPVP for an item of ISM, use the following procedure in addition to the requirements in:

  • SI 00835.704 In-Kind Support and Maintenance Provided Residents of Institutions

  • SI 00835.400 In-Kind Support and Maintenance (ISM) to One Person

  • SI 00835.350 Computation of In-Kind Support and Maintenance from Outside a Household (Including Vendor Payments by a Third Party Outside the Household

2. Obtain claimant’s statements

  1. a. 

    Claimant’s Statement—Obtain the claimant’s statement, signed or on a Report of Contact page, showing:

    • the month which they first had use of the food, or shelter item(s);

    • the third party paid the vendor sometime after the claimant’s first use of the item(s);

    • that the vendor extended credit to the claimant; and

    • the TPVP was a gift.

  2. b. 

    Supporting Statement—Obtain a supporting statement (signed or on a Report of Contact page) from the party who made the vendor payment, unless the claimant's statement rules out applicability of the exception.

3. Value of the ISM

To determine the amount of ISM to charge, use the total amount of the TPVP in any given month, including any interest, and apply the Presumed Maximum Value (PMV) rule. Any unpaid amount that the claimant is still responsible for is not income. For information on rebuttal procedures and the PMV rule, see SI 00835.320.

D. Examples of TPVP situations

1. Gift TPVP for part of food charged

  1. a. 

    Situation - Shawn buys their food at a neighborhood store where they have a line of credit. In August 2011, Shawn purchased $150 worth of groceries and received the bill in September. Shawn asked their adult child for help in making the payment, and on September 28, without expectation of repayment, the adult child paid the grocer $100, leaving a $50 unpaid balance.

  2. b. 

    Analysis - Although the food was available to Shawn in August, Shawn was under obligation to pay for it and it was not income. Some of the food became income to Shawn in September when the adult child made the $100 vendor payment. Since $100 is less than the PMV, we charge Shawn with $100 ISM in September. Shawn is still responsible for paying the $50 balance, so that amount was not income to Shawn.

2. Gift TPVP for ISM available in past, current, and future months

  1. a. 

    Situation - Kelly, who lives alone, received an $800 tax bill on their home in June 2011. The bill covered the tax period from January through December of the same year. Kelly's relative paid the tax bill in full on June 30 (five months retrospectively, one month current, and six months prospectively).

  2. b. 

    Analysis - Kelly received ISM valued at $400, subject to the PMV, in June because their relative paid the tax bill in that month, which covered the period January through June. Kelly also received monthly ISM valued at $66.66 from July through December, the period that a shelter item was prepaid. For information on conversion of real property taxes, see SI 00835.471B.1.

3. TPVP by co-owner not a gift

  1. a. 

    Situation - Warren lives alone in a house, which they jointly owns with their sibling. In February 2011, Warren received notice that the mortgage was six months in arrears (August 2010 through January 2011) and that the mortgage company would start foreclosure on March 1, 2011. On February 28, the sibling paid the entire amount past due, at $200 per month, plus payment for February and March (a total of $1,600).

  2. b. 

    Analysis - Because the sibling is a co-owner, the TPVP was not a gift. Therefore, Warren received ISM valued at $200 per month, subject to the PMV, from August 2010 through March 2011 (six months retrospectively, one month current, and one month prospectively).

E. Reference

SI 00830.520 Gifts

To Link to this section - Use this URL:
SI 00835.360 - When to Charge In-Kind Support and Maintenance (ISM) from Third Party Vendor Payments - 10/31/2023
Batch run: 10/31/2023