TN 36 (07-95)

SI 01130.410 Burial Funds Exclusion - August 1, 1990 and Continuing

A. Background

Burial funds first became excludable from resources on November 1, 1982. From that date until April 1, 1988, we could exclude burial funds only for those months in which resources would have otherwise exceeded the limit. Effective April 1, 1988, the exclusion can apply whether or not the individual would have excess resources without it. Effective August 1, 1990, other changes (as discussed below) were made to burial funds policy.

B. Definitions

1. Burial Funds

Burial funds are:

  • revocable burial contracts;

  • revocable burial trusts;

  • other revocable burial arrangements (including the value of certain installment sales contracts for burial spaces);

  • cash;

  • financial accounts (e.g., savings or checking accounts); or

  • other financial instruments with a definite cash value (e.g., stocks, bonds, certificate of deposit, etc.).

These funds must be clearly designated for the individual's or spouse's burial, cremation or other burial-related expenses. Property other than that listed in this definition will not be considered burial funds and may not be excluded under the burial funds provision. For example, a car, real property, livestock, etc., are not burial funds.

2. Expenses for Burial Funds Exclusion Purposes

a. Expenses Included

Expenses included for burial funds exclusion purposes are generally those related to preparing a body for burial and any services prior to burial. They usually include, for example: transportation of the body, embalming, cremation, flowers, clothing, services of the funeral director and staff, etc.

b. Expenses Not Included

Usually, expenses for items used for interment of the deceased's remains are not included for burial funds exclusion purposes. Such items may be subject to the burial space exclusion (SI 01130.400). However, items that do not qualify for the burial space exclusion, e.g., a space being purchased by installment contract, may be excluded under the burial fund exclusion.

3. Originally Designated Amount

The originally designated amount of a burial fund is the amount set aside for burial, including excluded and nonexcluded funds, but exclusive of interest and appreciation, at the time of the most recent designation. Any amount can be designated for burial, but only the amount established in SI 01130.410C.1. can be excluded.

4. Redesignation

A redesignation is a change or correction of a previous burial fund designation made necessary by a change in the amount of burial funds originally designated (not including accumulated interest or appreciation). This may be caused by addition of funds (other than interest) or use of funds. The burial fund exclusion is not lost and reapplied, but merely corrected.

C. Policy — General

1. Amount of Funds That Can Be Excluded

a. Maximum Exclusion

We can exclude up to $1,500 each in funds set aside for:

  • the burial expenses of the individual; and

  • the burial expenses of the individual's spouse (eligible or ineligible).

This exclusion is separate from and in addition to the burial space exclusion. However, the $1,500 burial funds exclusion may also include the value of funds paid on installment contracts for burial spaces not qualifying for the burial space exclusion.

b. Reductions in Maximum Exclusion

The maximum $1,500 that can be excluded is reduced by:

  • the face value of any life insurance policy on the individual (or spouse, if applicable), if such policy is excluded per SI 01130.300; and

  • any amount held in an irrevocable trust, burial contract, or other irrevocable arrangement for the individual's (or spouse's) burial expenses except to the extent that it represents excludable burial spaces.

EXAMPLE:

Mrs. Brown has the following burial resources:

$1,000designated savings account
$ 200irrevocable burial contract
$1,500maximum exclusion
- 200irrevocable burial contract
$1,300available exclusion
- 1,000excluded burial funds
$ 300still available for exclusion

Treatment - We exclude the $1,000 savings account. Two years later, Mrs. Brown wants to add to her designated burial savings account which now has a balance of $1,150 due to accumulated interest. She can increase the excluded funds in the account by up to $300 which would bring the total designated burial funds up to $1,300 (1,500 - 200) plus interest.

Note that when determining the amount still available for exclusion, we disregard the amount of interest which accumulated in the account.

c. Subsequent Purchase of Excluded Life Insurance or Irrevocable Burial Contract

A subsequent purchase of an excluded life insurance policy or an irrevocable burial contract reduces the amount of the available burial funds exclusion as described in b. above. The reduction is effective the month after the month in which the life insurance or the irrevocable burial contract was purchased. This may also result in a different ratio of excluded to nonexcluded funds. (See SI 00830.501 on calculating the ratio.)

d. Burial Insurance

Burial insurance policies are not life insurance policies (see SI 01130.300 for a definition of burial insurance). For SSI purposes, burial insurance is an irrevocable arrangement whose face value reduces the $1,500 burial funds exclusion by the policy's face value.

e. Increases in Value of Burial Funds

Any appreciation in the value of excluded burial funds is excluded from resources (and from income), even if the total of the burial funds thus excluded exceeds $1,500. This includes interest earned by burial funds, provided the interest is left to accumulate as part of the funds.

2. Increases in Amount of Excluded Burial Funds

a. Designated Amount is $1,500

Once the amount of designated burial funds equals $1,500 (or other maximum established per SI 01130.410C.1.b.), the only additions to that amount that can be excluded under the burial funds provision are appreciation and/or interest, per SI 01130.410C.1.e.

b. Designated Amount is Less Than $1,500

Until $1,500 (or such other maximum that is established in SI 01130.410C.1.b.) in burial funds has been designated, additional amounts can be excluded under the burial funds provision if the individual designates them for burial expenses. Interest on excluded burial funds is not included in determining if the $1,500 maximum has been reached.

c. An individual cannot “un-designate” burial funds

Once a fund is designated, it remains a burial fund until:

  • eligibility terminates; or

  • the individual uses the funds for another purpose, in which case a penalty may apply (SI 01130.410C.5.c. below).

3. Burial Funds Must Be Kept Separate

  1. Effective 8/1/90, burial funds may be commingled with burial-related assets, but must be kept separate from nonburial-related assets to be excluded. Burial-related assets are burial funds (excluded and nonexcluded) and burial spaces (including agreements representing the purchase of a burial space). If burial funds are commingled with nonburial-related assets, the exclusion does not apply.

  2. Examples

    A single burial contract for $2,500 of burial services and $2,000 in burial spaces does not have to be separated into 2 contracts since the whole amount is burial-related, even though we can only exclude $1,500 of the contract as a burial fund.

    A bank account containing $1,200, $500 of which is designated for burial and $700 of which is other funds the individual uses for living expenses, is not allowable and the $500 may not be excluded as a burial fund. If the $500 is moved to a separate account, the exclusion may be applicable the month following the month in which the funds are separated.

4. Conversion/Separation of Burial Funds (Post 8/90)

a. General

Recipients eligible prior to 8/1/90 who have excluded burial funds that do not meet the definition in SI 01130.410B.1. and/or the requirement in SI 01130.410C.3. must convert or separate their burial funds to meet this definition and /or requirement.

  • For personal contact redeterminations recipients must convert and/or separate funds before the first of the month that is 2 months following initiation of the first personal contact field office-initiated redetermination on or after 8/1/90. (See SI 02305.034A.3.) For example, if the redetermination was initiated on September 15, the funds must be separated or converted before November 1.

  • For mailout redeterminations, if burial funds are developed, conversion/separation must occur before the first of the month that is 2 months following notification by the FO of the requirement to do so.

  • Failure to convert or separate funds before the required time will result in the loss of the burial fund exclusion until the required action is completed. In the example above, the exclusion would end October 31.

  • Individuals who lose the exclusion because they failed to take the required action within the proper timeframe should be offered conditional benefits if the provision applies (SI 01150.200).

b. Exceptions

  • Recipients who have excluded burial funds prior to 8/1/90 and whose burial funds do not meet the definition in SI 01130.410B.1., or whose burial funds are commingled with nonburial-related assets, are not required to convert /separate their burial funds if there is an impediment to the conversion/ separation.

  • If burial funds would not normally be developed, e.g., a redetermination using Form SSA-8202, no special development related to conversion/separation is required unless there is a discrepancy that must be resolved (SI 02305.071). Information not elicited or alleged on forms completed during the redetermination, when compared to the SSR or prior files, does not constitute a discrepancy. If there is no discrepancy, the issue generally does not have to be developed unless the information indicates a question of eligibility (SI 02305.072).

  • An impediment is a circumstance beyond the individual's control which makes conversion or separation impossible or impracticable. Impediments can include provisions of law, regulations, or the action or inaction of other individuals over whom the recipient has no control. Inconvenience or mere unwillingness to convert or separate the funds is not an impediment.

  • For so long as the impediment exists, the burial funds will be excluded, provided that the individual remains otherwise continuously eligible for the exclusion.

  • When an impediment ceases to exist, the individual must convert or separate the burial fund before the first of the month that is 2 months following the month in which the impediment is removed. For example, if the impediment is removed in June, the change must be made before 8/1.

c. Example of an Impediment

Jim Beane has a 4-acre tract of land of which 1 acre is designated as a burial fund. At his redetermination on 12/3/90, the CR informs Mr. Beane that he must convert the land to a burial fund that meets our current definition. Mr. Beane explains that a local zoning ordinance prevents him from subdividing his land and selling just 1 acre.

Since there is an impediment to the conversion of the land designated for burial, we can continue to exclude the property as a burial fund. If the impediment is removed (i.e., Mr. Beane is granted a zoning exception permitting him to sell just the 1 acre), Mr. Beane must convert the burial fund by the first of the month that is 2 months following the month in which the impediment is removed.

d. Example - What is Not an Impediment

Mr. Jim Smith owns a second car. The CMV is less than $1,500 and the car is excluded as a burial fund. At a redetermination on 11/23/90, the CR informs Mr. Smith that the car can no longer be excluded as a burial fund, but may be sold and the cash received excluded as a burial fund. Mr. Smith informs the CR that his children use the car to go to the movies and that he does not intend to convert the car to cash. Effective with the 1/1/91 resource determination, the second car becomes a countable resource.

5. Penalty — Funds Used for Another Purpose

a. General

With the exception noted in b. below, if an individual uses excluded burial funds for a purpose other than the burial arrangements of the individual or the individual's spouse for whom the funds were set aside, the amount used will be withheld from future SSI benefits. This is a penalty, not the recoupment of an overpayment, and is not subject to overpayment procedures (e.g., waiver).

b. Exception

No penalty applies if, as of the first day of the month in which the excluded funds were used for another purpose, the individual's resources would not have exceeded the limit even if the burial funds were not excluded.

c. Change of Form

Transferring excluded burial funds from one form to another (e.g., from a certificate of deposit to a burial contract) is not use for another purpose.

d. Joint Account Situations

Only actions (i.e., use for another purpose) by the individual who designated the excluded burial fund or by someone acting as that individual's agent result in a penalty. Actions by a joint owner of a financial instrument who is not the individual or agent (e.g., a joint owner of a designated bank account who withdraws funds for his own use) do not result in a penalty.

e. Loans Against Burial Funds

A loan against the cash surrender value (CSV) of a life insurance policy that has been designated for burial expenses is not use for another purpose if the loan is for the purchase of another burial fund.

Use of a burial fund as collateral for a loan is use for another purpose because the loan creates an encumbrance on the funds. Since the funds are not available for the individual's burial as long as they are encumbered, the funds cannot be considered set aside for the individual's burial. This is true even if the loan is used for burial purposes.

f. Excluded and Non-Excluded Funds and Interest

If burial funds are used for another purpose, you should assume that they were used in the following order: nonexcluded interest, nonexcluded originally designated amounts, excluded interest, excluded originally designated amounts. The penalty only applies to the use of excluded funds (including excluded interest).

NOTE: This is important in determining if a redesignation is necessary. See SI 01130.410D.6.a. to determine if redesignation is necessary.

EXAMPLE - An individual designated $2,000 as a burial fund. We excluded $1,500 and counted $500. The account grew to $2,200 as of April 1994 ($1,650 excluded, $550 nonexcluded, see SI 00830.501 on prorating interest on commingled burial funds) because of accumulated interest. The individual used $750 for a non-burial purpose in April 1994. The claims representative determined that the $750 used consisted of $550 in nonexcluded funds, all $150 of excluded interest and $50 of originally designated excluded burial funds. A penalty of $200 applies ($150 excluded interest and $50 originally designated excluded funds). Redesignation of the amount of burial funds is also necessary (see SI 01130.410D.6.).

g. Redesignation of Funds After Misuse

If burial funds are used for another purpose, a redesignation of the remaining funds may be necessary. See SI 01130.410D.6.

6. Deeming Considerations

The burial funds exclusion also applies to resources belonging to a deemor and designated as set aside for the burial expenses of:

  • the eligible individual and/or his or her spouse; or

  • the deemor and/or his or her spouse, provided that the deemor is the eligible individual's spouse or parent.

D. Policy — Designation of Burial Funds

1. How Designation May Be Made

Burial funds may be designated as such by:

  • an indication on the burial fund document (e.g., the title on a bank account); or

  • a signed statement (over the penalty clause).

Funds may also be designated by completion of all applicable information in:

  • question 48 of the SSA-8000-BK;

  • question 22(b) of the SSA-8203-BK;

  • the remarks section of either form; or

  • the burial fund section for the resource in MSSICS claims.

A separate SSA-795 does not have to be taken unless an individual wishes to designate burial funds at a time other than the time of application or redetermination.

NOTE: An SSA-4169 (or signed statement including all information on the SSA-4169) must also be taken in all cases.

2. Signed Statement Designating Burial Funds

A signed statement designating resources as set aside for burial must show:

  • the value and owner of the resources;

  • for whose burial the resources are set aside;

  • the form(s) in which the resources are held (burial contract, bank account, etc.); and

  • the date the individual first considered the funds set aside for the burial of the person specified.

3. Date of Intent

We accept the individual's allegation as to the date he or she first considered the funds set aside for burial (even prior to application) unless there is evidence that the funds were used and replaced after that date.

4. Effective Date of Exclusion

Once the date that burial funds were considered set aside for burial has been established, the first month for which the exclusion affects the first-of-the-month resources determination is the latest of:

  • November 1982;

  • the month following the month in which the funds were considered to have been set aside, subject to the rules of administrative finality; or

  • the actual or effective month of filing, if the funds were considered set aside before that month.

NOTE: For claims filed on or after 8/1/90, the separation requirement in SI 01130.410C.3. must be met before burial funds can be excluded. If the requirement is not met as of the first moment of the month of filing, the exclusion cannot apply until the following month even if the funds were considered as set aside for burial prior to filing.

5. Designating Life Insurance as a Burial Fund

When designating a countable life insurance policy as a burial fund, the individual typically designates the policy itself rather than the CSV. This is the case because the CSV of a policy is payable only during the lifetime of the individual and thus cannot be used to bury the individual. However, since the CSV is the current resource value of the policy, it is the CSV which is applied toward the burial fund limit when determining countable resources.

When designating life insurance as a burial fund, the individual can also designate any dividend accumulations on the life insurance policy (SI 01130.300B.7.a.) as a burial fund. Dividend accumulations are a separate resource (i.e., not considered as an increase in the value of the CSV) and must be designated as burial funds separate from the life insurance policy itself.

6. Redesignation of Funds After Misuse

a. General

If burial funds are used for another purpose, a redesignation of the funds may be necessary. Redesignation does not mean that the burial fund exclusion is lost and reapplied, but that the dollar amount in the original designation must be changed or corrected. Redesignation becomes necessary at the point that there is a change in the amount of funds originally designated (not including accumulated interest or appreciation).

To calculate the amount of excluded interest, it is necessary to note in the file (e.g., in the File Documentation Notes section of the MSSICS page) the allocation of excluded and nonexcluded funds when the ratio of those funds changes from the ratio established in the prior designation. A new SSA-4169 is not required.

b. Redesignation Required

In the situation where the misuse of funds causes the remaining burial funds (exclusive of interest or appreciation) to fall the amount originally designated, a penalty may apply and the funds must be redesignated. Failure to correct the designation may lead to confusion on the part of the recipient as to how much SSA is excluding as a burial fund and may lead to incorrect determinations on the part of SSA personnel.

c. Replenishment of Funds

As an alternative to redesignation, the individual may add money to the burial fund to bring the total up to the originally designated amount, but excluded funds cannot be replenished in excess of $1,500 (i.e., previously excluded interest) or a lesser amount if the exclusion is reduced by the face value of excluded life insurance or by an irrevocable burial arrangement (see SI 01130.410 and SI 01130.410C.1.b. regarding reductions in the burial fund exclusion). Even if redesignation is not required, it is necessary to annotate the file if the ratio of excluded to nonexcluded funds changes. Replenishment will not mitigate application of a penalty, should one apply. See SI 01130.410C.1. and SI 01130.410C.2. regarding increasing the amount of excluded burial funds.

d. Examples - Redesignation Required

  • An individual originally designated $1,500 as a burial fund. Interest accumulated and the account grew to $1,750 in November 1993. In November, the individual withdrew $500 to repair her car. A $500 penalty applies (if other resources plus the $1,750 burial fund exceeded $2,000 as of the first of November). In addition, the individual must redesignate the amount of funds for burial because the amount in the account ($1,250) is now the originally designated amount of $1,500 and the designation no longer reflects this amount. (Redesignation is not required for accumulated interest or appreciation as these are not “designated” amounts.)

    Alternatively, the individual may add $250 to the account and the original designation will be accurate. (However, any penalty still applies.) The individual can replenish the funds in excess of $1,500, but we will exclude no more than $1,500.

  • An individual designated $2,000 as a burial fund. We excluded $1,500 and counted $500 as a resource. The fund increased in value to $2,200 due to accumulated interest ($1,650 excluded and $550 nonexcluded) in May 1994. The individual spent $250 in May for a non-burial purpose. No penalty applies since we assume the $250 was spent from nonexcluded funds (per SI 01130.410C.5.f.), which are now reduced to $300 ($550 - $250). However, the individual spent $200 in originally designated nonexcluded funds so a new designation must be taken for the remaining $1,800 of designated funds. (Redesignation is not required for accumulated interest or appreciation as these are not “designated” amounts.) Since no excluded funds were used, the excluded amount remains at $1,650 ($1,500 originally designated plus $150 accumulated interest).

    The file should be annotated to show the amount of interest in the fund not designated ($150 excluded interest) and to reflect the new ratio of excluded funds ($1,650/84.616%) to nonexcluded funds ($300/15.384%) for proration of interest.

e. No Redesignation Necessary

If the use of burial funds does not result in the amount of designated burial funds remaining (exclusive of interest or appreciation) to fall the amount of funds originally designated for burial, then no redesignation of funds is necessary. The burial fund will be the amount originally designated plus any remaining accumulated appreciation or interest. However, changed amounts of excluded or nonexcluded interest should be noted in the file.

f. Examples - No Redesignation

  • An individual originally designated $1,500 for burial and as of June 1994 the excluded funds totaled $1,850 because of accumulated interest. During June, the individual used $250 for another purpose. A $250 penalty applies (if other resources plus the $1,850 burial fund exceeded $2,000 as of the first of the month) and the remaining excluded burial fund will be $1,600 ($1,500 plus $100 interest) as of July. No redesignation is necessary as the individual did not misuse any of the $1,500 originally designated. However, the file should be annotated with the new amount of excluded interest.

  • An individual designated $2,000 as a burial fund (we excluded $1,500 and counted $500) and as of May 1994, the funds total $2,400 because of accumulated interest. Prorating the interest results in $1,800 in excluded funds and $600 in nonexcluded resources. (See SI 00830.501 on prorating interest on burial funds.) The individual uses $100 for another purpose in May. Following the instructions in SI 01130.410C.5.f., the $100 is deducted from the nonexcluded interest first and no penalty applies. No redesignation is necessary because the individual did not misuse any of the originally designated amount. However, the file should be annotated to note that interest payments will no longer be prorated in the ratio of 75 percent excluded and 25 percent nonexcluded, but 78.261 percent excluded and 21.739 percent nonexcluded.

E. Procedure — Initial Claims

1. Ask About Burial Funds

Unless the individual is ineligible for a reason other than resources, use the response to question 48 of the SSA-8000-BK to determine the presence of excludable burial funds.

A “no” answer to question 48 of the SSA-8000-BK closes the issue unless the individual indicates a current wish to designate funds for burial.

NOTE: Make sure the individual understands what we mean by a burial fund and the effect a burial fund could have on countable resources and income.

2. Verify Form and Separation of Funds

Verify that the funds meet the definition of burial funds in SI 01130.410B.1. and that the funds are separated from all other nonburial-related assets (SI 01130.410C.3.). Burial funds must meet both of these requirements before we can exclude them. The exception in SI 01130.410C.4.b. does not apply to initial claims filed on or after 8/1/90. If funds cannot be excluded, tell the individual why (e.g., if the funds are not separate from nonburial assets, explain what the individual can do to meet the separation requirement). Offer conditional benefits if appropriate.

3. Determine Date Funds Set Aside for Burial

If an individual alleges having set aside funds for burial, determine the date they were first considered as set aside and document the file with supporting evidence.

  • If the funds are already clearly designated (e.g., by the title of a savings account), accept any official record which shows the title of the account and which establishes that the designation was in effect prior to the month of effective filing.

  • If the funds are not already clearly designated, obtain the statement described in SI 01130.410D.

  • See the note in SI 01130.410D.4. regarding effective date of the exclusion for funds considered set aside for burial prior to filing.

4. Verify Value of Funds

Verify the value of any burial funds to be excluded, using the instructions that apply to the specific resources in question.

NOTE: See SI 01140.010B.2. on the applicability of the liquid resources verification tolerance to burial funds.

5. Determine Amount of Exclusion Available

Document the file with evidence of:

  • the face value of any life insurance policy on the life of the individual (and/or spouse, as applicable) that is an excluded resource per SI 01130.300; and

  • the amount of any irrevocable trust or other irrevocable arrangement providing for the burial expenses of the individual (and/or spouse, as applicable).

If the $1,500 maximum exclusion is reduced by the face value of any life insurance policy or the amount of an irrevocable trust or other arrangement providing for burial expenses, document on an RC the computation of the amount by which the exclusion will be reduced.

6. Explain Penalty for Use of Funds

a. Explanation

Explain the penalty that may apply if excluded burial funds are used for another purpose. See SI 01130.410C.5.

b. Signed Statement

Always obtain the individual's statement on an SSA-4169 (see SI 01130.414) or other signed form which includes all information on the SSA-4169, indicating his or her understanding of the penalty.

7. Input CG Field Entry

Enter the code BURY, followed by 4 digits showing the amount excluded, in the CG field. See SM 01301.820 on entering other burial fund-related information in the CG field, such as when excluded funds are commingled with nonexcluded funds.

F. Procedure — Posteligibility

1. Verify Funds Already Excluded

a. General

If the SSR shows excluded burial funds, verify the current amount unless the tolerance in SI 01140.010B.2. applies. Remember that increases due to appreciation or accumulated interest are excludable even if they cause the total burial fund exclusion to exceed $1,500. If the funds have decreased, see SI 01130.410G.

Also, inquire whether designated burial funds continue to meet the definition of burial funds in SI 01130.410B.1. and are being maintained separately from nonburial-related assets (SI 01130.410C.3.).

  • If funds do meet the above requirements, no documentation is necessary. However, inform or remind the individual of the requirements for maintaining the burial funds exclusion.

  • If funds do not meet the above requirements, document the change(s) that are required and see b. or c. below, as applicable.

b. First Field Office Initiated Redetermination On or After 8/1/90

If the funds do not meet the definition of a burial fund or are commingled with nonburial-related assets, take the following steps.

  • Tell the individual that he or she must convert the funds to meet the new definition or separate them from all other nonburial-related assets before the first of the month after the next month. Advise the individual of the current amount of the burial fund (as determined above) that should be separated.

  • If the individual protests the need to convert/separate, tell the individual that he or she can present evidence why the funds cannot be converted /separated. If the individual provides evidence that the exception in SI 01130.410C.4.b applies, document the file to that effect.

  • If no impediment to conversion/separation applies, diary the case to followup with the recipient in the month that is 2 months after the initiation of the redetermination. If the necessary conversion/separation has not occurred by the required time, terminate the burial fund exclusion effective with the first of the month that is 2 months following the month of the initiation of the redetermination and inform the individual what steps he or she can take to reestablish the exclusion. Offer conditional benefits if appropriate.

The diary date above applies to personal contact redeterminations. See SI 01130.410C.4. for diary date for other types of redeterminations.

c. Subsequent Redeterminations

If this is not the first field office initiated redetermination on or after 8/1/90, take the following steps:

  • Terminate the burial fund exclusion effective with the first of the month following the month in which the burial funds fail to meet either the conversion or the separation requirement.

  • Tell the individual why the exclusion no longer applies and what steps he or she can take to reestablish the exclusion. Offer conditional benefits if appropriate.

2. Recipient Wishes To Designate Funds

If an individual wishes to designate funds for burial, proceed as you would for an initial claim. This applies whether no funds are currently excluded or less than $1,500 (excluding appreciation or accumulated interest) is currently excluded.

3. Apply Burial Fund-Related Income/Resources Exclusions

See SI 01130.410J.

G. Procedure - Use of Burial Funds For Another Purpose

Use the following chart to determine if the penalty for use of burial funds for another purpose applies.

STEPACTION

1

Is there some indication that burial funds were used for a non-burial purpose?

  • If No, stop.

  • If Yes, go to Step 2.

2

Was the individual eligible in the month that funds were used?

  • If No, go to Step 9.

  • If Yes, go to Step 3.

3

If you add the amount of excluded burial funds (including any amount spent) to the individual's countable resources in the month the funds were used, does the individual have excess resources?

  • If No, go to Step 9.

  • If Yes, go to Step 4.

4

  • Obtain the individual's signed statement as to whether any of the funds were used for a nonburial purpose and, if so, the amount used.

  • Obtain any pertinent evidence, including signed statements from other individuals who may know about the funds in question.

Does the evidence indicate burial funds were used for a nonburial purpose?

  • If No, go to Step 9.

  • If Yes, go to Step 5.

5

Does the burial fund only contain excluded burial funds?

  • If No, go to Step 6.

  • If Yes, go to Step 7.

6

Assuming nonexcluded funds are used before excluded funds, did the individual spend excluded funds?

  • If No, go to Step 9.

  • If Yes, go to Step 7.

7

A penalty applies in the amount of excluded funds used. Prepare a special determination (GN 01010.360) documenting your decision about the use of funds and the amount used.

  • Go to Step 8.

8

Prepare a manual Notice of Planned Action (SSA-L8155) by suppressing the automated notice at the time of the determination. In addition to the appropriate standard notice paragraphs (NL 00804.100) include the language in SI 01130.410L.1. or SI 01130.410L.2. as appropriate.

NOTE: If the individual is blind or visually impaired, see instructions at NL 01001.010 for more information on the special blind or visually impaired notice options.

(See SM 01311.310 on systems input for check adjustment.)

Go to SI 01130.410H.

9

No penalty applies. Go to SI 01130.410H.

H. Procedure - Use of Burial Funds

Use the following chart to determine if a redesignation of burial funds is necessary.

STEPACTION

1

Using the assumptions in SI 01130.410C.5.f., that nonexcluded funds are used before excluded funds, compare the amount remaining in the fund (exclusive of interest) with the amount originally designated.

2

Is the amount remaining less than the originally designated amount?

  • If No, go to Step 3.

  • If Yes, go to Step 4.

3

Does the individual wish to add money to the burial fund?

  • If No, go to Step 7.

  • If Yes, go to Step 6.

NOTE: Additional funds can only be excluded until the funds reach $1,500 unless a reduction applies (SI 01130.410C.1.b.) Funds added in excess of this amount are not excluded.

4

Does the individual intend to add money to replenish the fund?

  • If No, go to Step 6.

  • If Yes, go to Step 5.

NOTE: Excluded funds can be replenished up to $1,500 unless a reduction applies (SI 01130.410C.1.b.). Funds added in excess of this amount are not excluded.

5

After funds are added, is the amount of replenished funds now different from the amount originally designated?

  • If No, go to Step 7.

  • If Yes, go to Step 6.

6

Revise the designation of burial funds to reflect the new amount of burial funds or other changes.

NOTE: This can be done in the remarks section on a redetermination using a paper form, the value screen and File Documentation Notes section in MSSICS or otherwise on an SSA-795. A new SSA-4169 is not required.

Go to SI 01130.410I.

7

No redesignation required. Go to I., below.

I. Procedure - Use of Burial Funds

Use the following chart to determine if it is necessary to document the ratio of funds and interest.

STEPACTION

1

Does the burial fund contain both excluded and nonexcluded amounts?

  • If No, go to Step 2.

  • If Yes, go to Step 3.

2

Is the amount of excluded interest different than before funds were spent?

  • If No, it is not necessary to annotate the file. STOP

  • If Yes, go to Step 4.

3

Calculate the ratio of excluded funds to nonexcluded funds per SI 00830.501. Compare the new ratio to the prior ratio before spending. Are they the same?

  • If No, go to Step 4.

  • If Yes, it is not necessary to annotate the file. STOP

4

Annotate the new amount of interest or appreciation in the file. If excluded and nonexcluded funds are commingled, record the ratio of excluded to nonexcluded funds in the file. STOP.

J. Procedure — Posteligibility Application of Exclusions

1. Recipient is Eligible for all Months During Period of Review

If the individual remained eligible throughout the period of review:

  • exclude from income any interest earned on the excluded burial funds if that interest has been allowed to accumulate as part of such funds; and

  • exclude from resources, in addition to the funds previously excluded, any interest on such excluded burial funds that has been excluded from income and any appreciation in the value of such excluded funds.

2. Period of Suspense ends 7/11/90 or Later

When conducting a redetermination to reestablish eligibility after a period of suspension that ends 7/11/90 or later, take the following steps:

  1. Explain to the individuals that:

    • we can continue to exclude the burial funds (including any accrued interest) throughout the period of suspension as long as the individual has not used any of the funds (including interest) for another purpose during the period of suspense;

    • if the individual used any of the burial funds for another purpose, the exclusion must be reestablished as if it had never applied before.

  2. If none of the funds were used for another purpose, exclude any amounts of interest earned on the excluded funds (SI 00830.501) during the last month of the period of suspension if it would otherwise count (e.g., prorated benefits are paid in the month of reinstatement) and document the file accordingly.

K. References

L. Exhibits

1. Insert Paragraphs — Initial Application of Penalty

For you to get SSI, your resources cannot be worth more than
(1) in (2) . We call this amount the limit on your resources. Resources are the things (3) own, such as cash, bank accounts, life insurance, automobiles, and anything else you own that could be changed to cash and used to buy food or shelter. We do not include certain things when we consider the amount of your resources. We do not count funds worth up to $1,500 if they are set aside to pay for burial expenses. However, special rules apply to these burial funds.

  • If the burial funds and the other things you own are worth more than the resource limit,

    AND

  • If any part of the burial funds is used for another purpose,

    THEN

  • We must deduct from your SSI payments the amount of burial funds used for another purpose.

Based on the facts we have, we now find that (4) used (5) of the funds set aside for (6) (7) . Because the funds were not used for burial expenses, we must deduct (8) from your SSI payment.

As a result, your SSI payment (9) .

Fill-ins:

(1)(Individual or couple resource limit)
(2)(appropriate year)
(3)Choice 1 - (you)
 Choice 2 - (you) and (your) (spouse/parent/parents)
 Choice 3 - (your) (spouse/parent/parents)
 Choice 4 - (name of deemor)
(4)Choice 1 - (you)
 Choice 2 - (you) and (your) (spouse/parent/ parents)
 Choice 3 - (your) (spouse/parent/parents)
 Choice 4 - (name of deemor)
(5)amount of misspent funds
(6)Choice 1 - (your) burial expenses
 Choice 2 - burial expenses for (you) and
(your) (spouse/parent/parents)
(7)Choice 1 - (The specific purpose for which the funds were used)
 Choice 2 - for some other purpose
(8)amount of misspent funds
(9)Choice 1 - will be (money amount) for (Month/Year)
 Choice 2 - will stop in (Month/Year). (You) will not get another SSI payment until we have withheld (money amount).

2. Insert Paragraph — Change in Amount of SSI Payment — Penalty Deduction Involved

However, you are not getting this amount because we are deducting (1) from your SSI payments. As we told you before, we are deducting the amount of burial funds used for another purpose.

  (2)    .   (3)   .

Fill-ins:

1.

$,$$$ (original amount deducted due to burial fund penalty)

   

2.

a.

After we deduct $,$$$ from your (month and year) payment, all the money you owe is paid back.

 

b.

After we deduct $,$$$ from your (month and year) payment, you still owe $,$$$.

   

3.

a.

null

 

b.

As a result, you will not get an SSI payment until this money is paid back.


To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0501130410
SI 01130.410 - Burial Funds Exclusion - August 1, 1990 and Continuing - 11/14/2013
Batch run: 11/14/2013
Rev:11/14/2013