The resources (and income) exclusions related to burial funds were the same prior to April 1, 1988 as for the period April 1, 1988 through July 31, 1990 with the exception described in 2. below.

Prior to April 1, 1988,the burial funds exclusion can apply only if counting any portion of the funds to be excluded would cause resources to exceed the limit.

Without the circumstance described in 2. above, there is no exclusion. If there is no exclusion, there can be no penalty for using designated funds for another purpose.

Inquire about funds set aside for burial only if:

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  the individual appears to be eligible except for having excess resources; and

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  the excess is no more than $1,500.

If an individual alleges having funds set aside for burial, develop as outlined in SI 01130.410E. Apply the exclusion only if it would result in eligibility.

Follow the guidelines in SI 01130.410F. Disregard provisions that apply only after 8/1/90.

In addition to 1. above, be certain that you apply the burial funds exclusion only for months when counting any portion of the funds would result in excess resources (see A.2. above).

If the resources exclusion does not apply for any month(s) in the period of review, do not apply the income exclusion for interest earned on designated funds for such month(s).

Do not apply the burial funds exclusion for any month in which:

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  resources (including designated burial funds) no longer exceed the applicable resources limit; or

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  the individual is ineligible for any reason, including having excess resources despite benefit of the burial funds exclusion.

If an individual loses the exclusion for one or more months, redevelop its applicability as you would for an initial claim. This includes the renewed application of the $1,500 limit. Do not exclude any amount beyond that limit, even if a larger amount had been excluded previously.

Follow SI 01130.410G if an individual:

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  has used funds for a purpose other than that designated; and

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  as of the first moment of the month in which such use occurred, would have been ineligible without benefit of the burial funds exclusion.

An SSI recipient has $1,200 excluded from resources as set aside for burial as of June 1987. The funds earn interest, which is allowed to accumulate as part of the principal and is excluded from income and resources.

During the course of a redetermination initiated in September 1989, the CR determines that the recipient's total resources, including burial funds, had dropped below the applicable limit as of December 23, 1987. In March 1988, the recipient had a family emergency and withdrew $500 of the excluded funds to pay the unexpected bills.

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  Effective with the resources determination for January 1988, the burial funds exclusion does not apply to the recipient. Therefore, the $7 a month in interest earned by the funds, even though left to accumulate with the funds, is not excludable for January through March.

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  Since the exclusion did not apply in March, the fact that the recipient spent $500 in previously designated funds does not result in a penalty.

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  As of April 1, 1988, the recipient is entitled to the burial funds exclusion regardless of whether it is needed to prevent excess resources.