TN 12 (08-00)
SI 01150.124 Exceptions — Transferred Resource Returned
This section provides instructions for cases in which the transferred resource is returned to the transferor.
A. Policy — Exception for resources returned to transferor
If the individual transfers a resource and the entire resource is returned in the same month, the period of ineligibility does not apply.
1. Returned Resources — General
To meet this exception, the individual must reacquire the same percentage of ownership interest in the resource that existed prior to the original transfer. Reacquiring a lower ownership interest is not sufficient to meet this exception. Merely reacquiring physical possession of the resource is not sufficient. It is necessary to reacquire legal ownership.
NOTE: The return of the resource to the individual is not counted as income to the individual.
2. Resource Returned in Same Month
If the individual transfers a resource and the entire resource is returned in the same month, the period of ineligibility does not apply. In these cases, the individual's eligibility is determined based on the value of his/her resources at the beginning of the month. These cases are treated as if the transfer had never occurred.
Example: Ms. Smith transfers a nonexcluded automobile for less than fair market value on 8/3/00. On 8/6/00 she files for SSI and learns that the transferred resource will make her ineligible for SSI. On 8/10/00 she returns to the field office and provides evidence that the transferred automobile was returned to her on 8/9/00. Since the entire resource was transferred and returned in the same month, Ms. Smith is not subject to a period of ineligibility due to a resource transfer. However, Ms. Smith's eligibility for SSI is based on the value of her resources as of 8/1/00, including the value of the nonexcluded automobile.
3. Resource Returned in a Subsequent Month
If the individual transfers a resource and the entire resource is returned in a subsequent month, the period of ineligibility continues through the month the resource is returned (even if the resource is returned on the first day of the month). The period of ineligibility due to the transfer ends as of the month following the month the resource is returned. In that month, the returned resource is counted towards the individual's SSI resource limit.
Example 1: Mr. Johnson transferred a sailboat for less than fair market value on 8/5/00. The uncompensated value is determined to be $3,000. On 8/10/00 he files for SSI benefits and learns that transferring a resource for less than fair market value makes him subject to a period of ineligibility. On 9/20/00 he reports to the field office that the transferred resource was returned to him on 9/15/00. For 8/00, Mr. Johnson's eligibility would be based on his resources as of 8/1/00 including the sailboat. For 9/00 he would be subject to a period of ineligibility due to the uncompensated value of the resource transfer. As of 10/00 the period of ineligibility due to the transfer ends. For 10/00 his eligibility would be based on all of his countable resources as of 10/1/00, including the sailboat. If Mr. Johnson is otherwise eligible, the claims representative (CR) would advise him that he could be eligible for SSI based on conditional benefits (SI 01150.200).
Example 2: Mr. Jones files for SSI on 10/3/00. He informs the CR that he transferred a boat worth $5,000 to his nephew in 4/00. He further states that the nephew returned the boat to him in 6/00. Since the boat was returned to Mr. Jones before he filed for SSI, the transfer has no effect on SSI eligibility. However, if Mr. Jones still owned boat in the month he filed for SSI, it would be counted as a resource.
4. Less Than the Entire Resource Returned
If the entire resource is not returned, the period of ineligibility does not end. Instead, recompute the uncompensated value based on how much of the resource was not returned. Then, recompute the period of ineligibility based on the adjusted uncompensated value. If additional funds are subsequently returned, it will be necessary to recompute the uncompensated value again.
NOTE: Assume, absent evidence to the contrary, that the returned resource has the same current market value (CMV) it had when it was originally transferred. But, if the returned resource has a different CMV, recompute the uncompensated value by comparing the CMV in the month the resource is returned with the CMV at the time of the original transfer.
Example 1: Ms. Jones files for SSI on 8/6/00 and alleges ownership of 50 shares of stock worth $5,000. She learns that the stocks would make her ineligible for SSI due to excess resources, so she gives all 50 shares to her brother on 8/9/00. She returns to the field office and alleges that she no longer owns the stocks. The field office determines that she transferred the stocks for less than fair market value and determines that she is ineligible due to excess resources in 8/00, and subject to a period of ineligibility beginning in 9/00 based on $5,000 uncompensated value.
On 10/5/00 Ms. Jones returns to the field office and reports that the stocks were returned to her on 10/3/00. After reviewing the evidence, the field office determines that 15 shares of stock worth $1,850 had been returned to Ms. Jones. Since the entire resource was not returned, Ms. Jones does not meet the exception to the period of ineligibility. The field office recomputes the uncompensated value ($5,000 minus $1,850 = $3,150) and uses the new, lower uncompensated value to recompute the period of ineligibility. The recomputed period of ineligibility would have the same beginning date, but it would have fewer months due to the lower uncompensated value.
Example 2: Ms. Green files for SSI on 12/5/99 and gives her son $5,300 in stock certificates on 12/21/99. The field office determines that she has a period of ineligibility of 10 months ($5,300 divided by $500 = 10.6). The 1999 Federal benefit rate (FBR) ($500) is applicable per SI 01150.111D. Ms. Green is determined to be ineligible for SSI from 1/00-10/00. However, in 7/00 her son returns $2,800 of the certificates to Ms. Green. It is necessary to recompute the period of ineligibility based on uncompensated value of $2,500 ($5,300 minus $2,800). The CR determines that the period of ineligibility is only 5 months ($2,500 divided by $500). However, her period of ineligibility continues through 7/00—the month that the resource was returned. She is potentially eligible for SSI as of 8/00 if she meets all other requirements for eligibility.
B. Procedure — Documenting the return of transferred resources
Follow this procedure if the individual alleges that a transferred resource has been returned.
Verify, using the individual's statement either signed or recorded on a DROC and appropriate documents, that the ownership of the resource has been returned to the individual, the date, and that ownership of the entire resource was reacquired. A statement by the individual is not sufficient.
2. Making the Determination
If the entire resource was returned in the same month as the transfer, process the case as if no transfer has occurred.
If the entire resource was returned in a subsequent month, apply the period of ineligibility through the month that the resource was returned.
If less than the entire resource is returned, recompute the period of ineligibility.
If, after the resource is returned, the individual is ineligible due to excess resources, advise the individual that he/she may be eligible for conditional benefits per SI 01150.200.
3. Systems Input
Record the evidence used on the EVID screen on the Shared Processes Menu (MSOM EVID 001.001 ).
Record the determination on MSSICS using the File Documentation Notes section of the Property/Cash Given or Sold (RGIV) page or DROC (MSOM MSSICS 022.010 ). On non-MSSICS cases, use a Report of Contact.
4. Medicaid Notification
Notify the State Medicaid agency about the transferred resource unless the SSI claim is denied. (SI 01150.012)
Conditional benefits, SI 01150.200
Notifying Medicaid, SI 01150.012
MSSICS DROC screen, MSOM MSSICS 022.010
EVID screen, MSOM EVID 001.001