TN 32 (05-94)

SI 01130.500 Property Essential to Self-Support - Overview

A. Introduction

The Act provides for the exclusion from resources of property that the Secretary determines is so essential to an individual's means of self-support as to warrant exclusion.

B. Policy — general

1. Categories Of Property Excluded Under This Provision

Resources excluded under this provision generally fall into 3 categories. Each is listed below and then described in more detail in a subsequent section.

a. Property Excluded Regardless of Value or Rate of Return

This category encompasses:

  • property used in a trade or business (effective 5/1/90);

  • property that represents government authority to engage in an income producing activity;

  • property used by an individual as an employee for work (effective 5/ 1/90); and

  • property required by an employer for work (before 5/1/90).

See SI 01130.501.

b. Property Excluded up to $6,000 Equity, Regardless of Rate of Return

This category includes nonbusiness property used to produce goods or services essential to daily activities. For example, it covers land used to produce vegetables or livestock solely for consumption by the individual's household. See SI 01130.502.

c. Property Excluded up to $6,000 Equity if it Produces a 6% Rate of Return

This category encompasses:

  • property used in a trade or business in the period before 5/1/90;

  • nonbusiness income-producing property. However, the exclusion does not apply to equity in excess of $6,000 and does not apply if the property does not produce an annual return of at least 6% of the excluded equity. If there is more than one potentially excludable property,the rate of return requirement applies individually to each. See SI 01130.503.

2. Current Use Criterion

Resources that are excluded under this provision must be in current use in the type of activity described. If not in current use, there must be a reasonable expectation that the required use will resume. See SI 01130.504.

3. Liquid Resources

Liquid resources are not considered property essential to self-support except when used as part of a trade or business.

C. Policy — limitations on development

It is not necessary to develop for the exclusion of property essential to self-support if:

  • the combined value of the self- support property and other countable resources does not exceed the applicable statutory limit;

  • the value of other countable resources (including any equity over $6,000 when B.1.b. or c. is involved) exceeds the applicable statutory limit and conditional benefits are not possible or are declined by the individual;

  • the individual is ineligible for a reason other than resources; or

  • the property was excluded under the State plan in effect for October 1972 and the individual meets the criteria for “grandfathering” in SI 01220.001 ff.

D. Related policies

1. Home Property

When an individual uses home property to perform self-support activities, the property is excluded under SI 01130.100,regardless of its value, rate of return,or current use.

2. Plan For Achieving Self-Support

The primary differences between the exclusion of property essential to self- support and the exclusions provided for under a plan for achieving self-support (PASS)(see SI 00870.001 ff.) are that the PASS exclusions:

  • cover income as well as resources;

  • apply to the blind and disabled, but not to the aged;

  • have a time limit; and

  • do not have an inherent dollar limit.

Consider the overall resources situation to ensure that the individual receives the benefit of the most advantageous exclusion for him or her.

3. Former Recipients Of Assistance Under A State Plan

Former recipients of assistance under a State plan may be entitled to a special resources limit or to more advantageous exclusions under the State plan (see S