NOTE: Current or future payments include agreements to transfer or convey property (income
or resources) which may be acquired in the future.
EXAMPLE: Express Obligation Exists Based on Lump-Sum
An eligible individual enters a private nonprofit tax-exempt retirement home which
meets the requirements of section 501(c) of the IRC. Under a written, enforceable
contract, he is required to make a lump-sum payment of $20,000. There is no requirement
for any additional payments and none of the $20,000 is refundable unless he leaves
the home. In return he will receive lifetime care (at least all of his food and shelter).
In this case the institution has undertaken an express
obligation to provide full support and maintenance. Therefore, the “Church amendment” exclusion does not apply and ISM may be countable. Even if the individual decides
later to make voluntary payments, the “Church amendment” exclusion would not apply since the institution must fulfill its contract regardless
of any further contributions from the individual.
Because the “Church amendment” does not apply, the CR would need to determine if the food and shelter could be excluded
under the SMA exclusion in SI 00830.605. If not excludable, then the CR would follow the procedures in SI 00835.707 to determine if the food and shelter provided is countable as ISM. In addition, the
CR would follow the instructions in SI 00835.480D.3. to determine how the individual's lump-sum prepayment would be allocated as a
contribution towards food and shelter costs.