TN 12 (08-00)

SI 01150.001 What is a Resource Transfer

Citations:

Social Security Act as amended, section 1613(c)

A. Introduction — Transfer of resources

In order to determine eligibility for SSI, SSA must determine the value of an individual's resources at the first moment of the month. Transferring ownership of a resource may affect the value of an individual's countable resources which in turn can affect SSI eligibility. As of 12/14/99, transferring ownership of a resource for less than fair market value can result in a period of ineligibility for SSI. Therefore, when an individual alleges that a resource has been transferred it is necessary to develop this issue in order to determine the effect on SSI eligibility. SSA must also notify State Medicaid agencies about resource transfers, regardless of when the transfer occurred.

B. Policy — What is a valid transfer

1. Valid transfer

When there is a valid transfer, the individual no longer owns the property. A valid transfer is based on a legally binding agreement. If the individual no longer owns the property, it is not counted as a resource for SSI purposes. If a transfer is not valid, the individual still owns the property and it is counted as a resource for SSI purposes.

2. Effective date of transfer

Resource determinations are based on the resources an individual owns on the first moment of the month. Therefore, when property is validly transferred, it no longer counts as a resource as of the first moment of the month following the transfer (SI 01110.600).

Example: The individual sells his sailboat on 5/15/00. For SSI purposes, the boat is considered a resource for May. As of June the boat is not a resource.

3. Transactions that can result in valid transfer

Valid transfers of resource ownership may occur through any of the following types of transactions:

  • Sale of property;

  • Trade or exchange of one property for another;

  • Spend-down of cash;

  • Giving away cash;

  • Transferring any financial instrument (e.g., stocks, bonds);

  • Giving away property (including adding another person's name as an owner of the property);

Example: If the owner of a home adds the name of another person to the deed as a co-owner, the owner has transferred a portion of the value of the resource to that person. This transaction is considered a transfer of resources.

4. Spend-down of cash resources

Spending cash is a type of transfer. Assume, absent evidence to the contrary, that an individual gets fair market value when he/she spends cash resources. See SI 01150.007 for instructions for developing spend-down of cash.

5. Transfers in the month of receipt

A transfer of income in the month it is received is considered a transfer of a resource if the income would have been considered a resource in the following month. Although, under the first of the month rule, receipt of income would not be counted toward the beneficiary's SSI resource limit until the month after it is received, such income meets the regulatory definition of a resource the month it is received. As defined in SI 01110.100B, resources include cash or any other property that an individual owns and could convert to cash to be used for his or her support and maintenance.

Example: Mr. Smith receives an inheritance of $5,000 in May, 2006. In the same month, he transfers the $5,000 to his brother. The $5,000 inheritance is counted as unearned income in May. It is also considered to be a transfer of a resource in May. Despite the fact that the inheritance would not be counted as a resource unless retained until June, we consider the transfer subject to the transfer of resource penalty because it meets the definition of a resource in the month of receipt.

6. Questionable ownership

An individual may allege not being the owner of a resource that is in his/her name. If the individual “takes his/her name off” the resource, it is necessary to develop whether this was a resource transfer. When developing the transfer, follow the general rule that if the resource would have been countable under SSI resource counting rules, then “taking the name off” the resource would be a resource transfer. However, see SI 01120.010 for the factors that make property a resource and SI 01120.020 for transactions that involve agents if the individual alleges not owning the resource.

C. Policy — Effect of transfers on SSI and Medicaid eligibility

The effect of transfers on SSI and Medicaid eligibility has changed several times due to changes in the law.

1. Resource transfers between 3/1/81 and 6/30/88

During this period, transferring a resource for less than fair market value could result in SSI ineligibility for up to 24 months. Effective 4/1/88, P.L. 100-203 authorized SSA to waive application of the penalty for months in which it would cause undue hardship.

2. Resource transfers between 7/1/88 and 12/13/99

Public Law 100-360 eliminated the SSI penalty for resources transferred on or after 7/1/88. Therefore, there is no transfer penalty for resources transferred between 7/1/88 and 12/13/99. However, this law established a requirement for SSA to inform applicants and recipients that a transfer of resources for less than fair market value may affect Medicaid eligibility. It also established a requirement for SSA to notify State Medicaid agencies about transfers of resources. See SI 01150.100 for instructions for processing transfers made before 12/14/99.

3. Resource transfers on or after 12/14/99

Public Law 106-169 (Foster Care Independence Act of 1999) established a period of SSI ineligibility of up to 36 months for an individual who transfers resources for less than fair market value. This provision is effective for transfers made on or after 12/14/99. SSA is still required to notify applicants and recipients about the potential effect of resource transfers on Medicaid eligibility. And SSA is still required to notify State Medicaid agencies about transfers of resources. See SI 01150.110 for instructions for processing transfers made on or after 12/14/99.

D. Policy — When transfers must be developed

1. Initial claims

It is necessary to ask every SSI applicant whether any resources were transferred since the look-back date which is 36 months before the date of filing for SSI. If resources were transferred since the look-back date, it is necessary to develop the transfer to determine the effect on SSI eligibility. See SI 01150.110C. for a discussion of the look-back date. And, SSA is required to forward information about the transferred resource to the State Medicaid agency unless the SSI claim is being denied. See SI 01150.012 for instructions about notifying the State Medicaid agency.

2. Posteligibility

When redetermining SSI eligibility, it is necessary to ask whether any resources were transferred since the last review (i.e., the date the claim was filed, the date of the PERC or the previous redetermination). In posteligibility, we develop any transfer that occurs while the individual is eligible for SSI. Absent evidence to the contrary, we assume that a transfer made prior to the last review has already been developed. However, if an undeveloped transfer is uncovered that occurred prior to the last review, it must be developed. Development of such a transfer is not limited to the date of the last review. However, applying the period of ineligibility is limited under the rules of administrative finality unless there is a determination of fraud (SI 04070.020) or similar fault (SI 04070.020). Also, see SI 01150.110C for an example of a posteligibility transfer and the effect of administrative finality.

REMINDER: Previously undisclosed resources may effect SSI eligibility prior to the transfer (i.e., the individual may have had excess resources prior to the transfer).

E. Procedure — Documenting date and validity of transfer

It is always necessary to determine whether an alleged transfer of a resource was a valid transfer. If the transfer is not valid, the resource is still owned by the individual.

1. Obtain individual’s statement

Obtain the individual's statement either signed or recorded on a DROC that explains:

  • The nature of the transfer (sold, given away, traded, etc.);

  • The method of transfer (sold on open market, transferred without compensation, etc.);

  • The date of the transfer;

  • A description of the transferred resource;

  • The amount of cash transferred or the current market value (CMV) of the transferred resource;

  • The amount and type of compensation received;

  • Any remaining ownership interest.

2. Obtain evidence

Because an individual may not be sure of the exact date of the transfer, verify the date and validity of a transfer that is alleged to have occurred on 12/1/99 or later. To verify, obtain copies of available evidence of the transaction such as:

  • Bills of sale;

  • Receipts for prepayment of rent;

  • Signed statement by the person to whom the property was transferred;

  • A signed statement by the transferor, if the evidence above cannot be obtained and the sale was on the open market (not to a relative).

For transfers alleged to have occurred prior to 12/1/99, verify only if the individual's allegation is questionable or the individual cannot remember the date of the transfer.

3. Document the determination

Document the file with your determination concerning the date and validity of the transfer.

a. MSSICS

For initial claims and redeterminations done on MSSICS:

  • Document the transfer information by answering “Yes” to the resource transfer question on the Resource Selection page and completing the Property/Cash Given or Sold (RGIV) page (MSOM INTRANETSSI 013.034).).

  • Document your determination on the File Documentation Notes section of the Property/Cash Given or Sold (RGIV) page or DROC screen as to whether the transfer was valid. For example: “Valid Transfer of $8,000 Cash on 3/5/00.”

b. Non-MSSICS

For initial claims done on paper applications:

  • Document the transfer using the transfer of resources question on the SSA-8000-BK. Be sure to ask whether any transfers occurred in the 36 months prior to the filing date.

  • Document your determination as to whether the transfer was valid using a Report of Contact (SSA-5002).

For redeterminations done on paper forms:

  • Document the transfer in the remarks section of the redetermination form.

  • Document your determination as to whether the transfer was valid using a Report of Contact (SSA-5002).

NOTE: At the time these instructions were written, the resource transfer questions on MSSICS and on paper forms refer only to the individual and spouse. Until the questions are revised, it will be necessary to ask about resource transfers made by a co-owner of the resource.

4. Next steps

After determining that a valid transfer has occurred, choose the appropriate next step.

  • Transfer Before 12/14/99: Follow the instructions in SI 01150.100 for processing the case.

  • Transfer On or After 12/14/99: Follow the instructions in SI 01150.005 to determine whether the individual received fair market value for the transferred resource.

NOTE: For a summary of all of the procedures for processing resource transfer cases, see SI 01150.003.

F. References

First of the month rule, SI 01110.600

Factors that make property a resource,