TN 10 (02-15)
PS 01810.014 Hawaii
A. PS 15-072 SSI Resource Issue: Foreign Property
DATE: January 22, 2015
This RCC examines whether ownership of Chinese real property constitutes a resource for supplemental security income (SSI) eligibility purposes, where the individual claims that such property is not freely transferable. Individuals cannot privately own land in China, but may obtain transferrable land-use rights. The individual submitted a certificate to SSA that lists him as the sole owner of a house in China and lists the State as the owner of the land, and also indicates that the land-use right has been assigned. Chinese law permits individuals to privately own residential houses and apartments built on state-owned land. Based on the documents he submitted to the agency, the individual owns a house and has been assigned a renewable land-use right to the underlying land. Because his property interest is freely transferable and may be converted to cash, it constitutes a resource for purposes of SSI.
You asked whether X~’s ownership of Chinese real property constitutes a resource for supplemental security income (SSI) eligibility purposes, where X~ claims that such property is not freely transferable.
Yes. X~ is able to sell or otherwise transfer his ownership interest in Chinese real property. Accordingly, that property constitutes a resource for purposes of SSI eligibility.
On January 12, 2012, X~ and Y~ applied for SSI as a married couple. X~ and Y~ were both born in China, but currently reside in California and are naturalized United States Citizens. On July 10, 2012, the agency denied X~ and Y~’s application for SSI, finding that their total resources exceeded the statutory Limit. Specifically, X~ admitted that his father transferred ownership of a house to him in 1985. X~ stated that the house’s value was approximately $16,000. X~ and Y~ testified that they do not intend to return to China to live in the house.
On September 5, 2012, X~ requested reconsideration. On October 31, 2012, X~ submitted additional information. Specifically, in an October 31, 2012 statement, X~ claimed that his eight siblings were co-owners of the house his father transferred to him in 1985. He identified the address of the house as ~~ ~~~, Nansha Residential Committee, Jun’An Town, Shunde District, Foshan City, China. Additionally, X~ submitted September 5, 2012 statements from his mother and sister. X~’s mother, then 95 years old and Living in the house, asserted that all nine of her children are co-owners of the property located at ~~~ ~~~. Likewise, X~’s sister represented that she has an ownership and residential right in the property.
X~ also provided a certificate issued by the Nansha Community Residential Committee, dated November 16, 2011. According to the certificate, X~ was the original resident of the house located at ~~~ ~~~ . The certificate also stated that X~’s parents and siblings have lived in the house permanently, and X~ is prohibited from selling this house to others. On November 26, 2012, the agency denied X~’s request for reconsideration and he requested a hearing on January 8, 2013. The ALJ held a hearing on February 21, 2014. An attorney represented the couple at the administrative hearing and X~ testified on his own behalf.
On August 27, 2014, in response to your request, X~ submitted a Property Rights Certificate with a registration date of January 17, 2006, showing that he owns property at ~~~ ~~, Nansha Residential Committee, Jun’An Town, Shunde District, Foshan City, China. X~ made no prior mention to this official property record, nor did he explain his failure to produce this record prior to the agency’s request. The certificate lists X~ as the sole owner of the house. The certificate lists the State as the owner of the land, and indicates that the land-use right has been assigned.
To be eligible for SSI payments, claimants must prove they are at least 65 years of age, or blind, or disabled with limited income and limited resources and legally residing in one of the 50 states, the District of Columbia, or the Northern Mariana Islands. See Social Security Act §§ 1602, 1611; 20 C.F.R. § 416.202.
A resource, for SSI purposes, includes assets that an individual owns and could convert to cash and use for food or shelter, including real property. See Social Security Act § 1613; 20 C.F.R § 416.1201(a). If the individual has the right or power to liquidate the property or his share of the property, it is a resource. See 20 C.F.R. § 416.1201(a)(1). If an individual disposes of his or her resource for less than fair market value, he or she becomes ineligible for SSI benefits for 36 months. See Social Security Act § 1613(c)(1)(A); Program Operations Manual System (POMS) SI 01150.001.C.3; SI 01150.003. The limit for countable resources is $2,000 for an individual and $3,000 for a couple. See Social Security Act § 1611(a)(3); 20 C.F.R. § 416.1205; POMS SI 01110.003.A.2.
Although the agency considers real property a resource, an individual’s principle place of residence, regardless of value, is an excluded resource (the home exclusion). See Social Security Act § 1613(a)(1); 20 C.F.R. §§ 416.1210(a), 416.1212; POMS SI 01130.100. Property ceases to be the principle place of residence as of the date that the individual left it with no intention of returning. See 20 C.F.R. § 416.1212(c); POMS SI 01130.100.B.
Similar to the home exclusion exception, the agency also excludes the value of an individual’s ownership interest in jointly owned real property if the sale of the property would cause undue hardship, due to loss of housing, to a co-owner (the undue hardship exception). See Social Security Act § 1613(b)(2)(A); POMS SI 01130.130.
The People’s Republic of China The People’s Republic of China (PRC or China) provides for the protection of private property in its 1982 Constitution and 2004 amendments. See Zhang, Laney, China: Real Property Law, the Law library of Congress, Global Legal Research Center (October 2014), 1-2. Article 13 of the PRC Constitution provides that “[c]itizens’ lawful private property is inviolable.” Id. at 1.
The PRC Property Rights Law, which became effective on October 1, 2007, addresses the establishment, alteration, transfer, and elimination of property-related ownership rights, and the registration and delivery of movable and real property rights. Id. at 2.
According to the PRC Constitution and Property Rights Law, individuals cannot privately own land and natural resources in China. Id. at 3. Instead, the state owns urban land and collectives own rural and suburban land. Id. However, individuals can obtain a right to use land. The land-use right allows the right-holder to legally possess, use, and benefit from property owned by another (whether the state or a collective). Id.
In urban areas, the state grants or allocates land-use rights to land users. Id. For granted land-use rights, land users pay the state granting fees for a certain number of years. Id. Currently, land may be used for residential purposes for up to seventy years. Id. at 4. When the term for the right to use land for residential purposes expires, the term automatically renews. Id. If the land owner dies prior to the expiration of the seventy year or renewal term, the land-use right passes to the owner’s heirs. China’s Assignment Regulations provide that land users may transfer their land-use rights to others through sale, exchange, gift, mortgage, or lease. Id. at 4. When transferred, the land-use right and the right to structures on top of the land (home ownership) transfer simultaneously. Id.
In transferring real estate rights, the new owner obtains the land-use rights only for the period equivalent to the original assigned term minus the number of years the original owner has used the land. Id. at 5. However, as discussed above, a residential land-use right term will automatically renew upon expiration. Id.
According to the 2006 Property Rights Certificate, X~ owns a house located at ~~~ ~~in Foshan City, China, identified as an urban area. Although X~ does not own the land upon which the house is situated, it appears that the State has assigned him land-use rights, which renew automatically every 70 years. Per the PRC Constitution and Property Rights Law, X~ may sell or otherwise legally transfer these property rights. Thus, because X~ has an ownership interest in real property, which he could sell or otherwise convert into cash, that property is a countable resource. See 20 C.F.R. § 416.1201(a); POMS SI 01110.100.B.1.
Furthermore, the property does not qualify as an excluded resource under the home exclusion rule because the house is not currently X~’s principle place of residence nor does he intend on returning to it.
Although X~, his family, and the Nansha Community Residential Committee claim that, per cultural tradition, X~’s siblings and parents are co-owners of the property, they fail to provide any legal documents to confirm this claim. Moreover, the Property Rights Law provides that land-use rights must be registered with local government land authorities at or above the county level; these authorities issue certificates to affirm these rights. See Zhang, Laney, China: Real Property Law, at 5. Thus, the Property Rights Certificate, identifying X~ as the sole owner, appears to be dispositive.
Despite their allegations to the contrary, the agency has not received evidence showing that X~’s family members have any registered legal interest in the property, and Chinese law does not recognize family ownership arising from cultural traditions of an “ancestral home.” Moreover, X~’s failure to produce the property rights certificate prior to August 2014 suggests that his prior allegations of co-ownership may have merely been an attempt for X~ to evade the implications of sole ownership. Therefore, because the 2006 Property Rights Certificate lists X~ as sole owner of the property, the property’s sale cannot cause any undue hardship on co-owners, and the undue hardship exception does not apply.
Individuals cannot privately own land in China but may obtain transferable land-use rights. In addition, Chinese law permits individuals to privately own residential houses and apartments built on state-owned land. Based on the documents he submitted to the agency, X~ owns a house and has been assigned a renewable land-use right to the underlying land. Because X~’s property interest is freely transferable and may be converted to cash, it constitutes a resource for purposes of SSI.
At the February 21, 2014 hearing, X~ explained that the Nansha Community Residential Committee is a group of individuals selected by farmers to take care of the village. He acknowledged that the Committee does not have an ownership right to the property.
X~ claims that he is prohibited from selling the property because it is his “ancestral” home and doing so would break with tradition. He claims that ancestral homes must stay within the family and remain in the name of the eldest son. We have no information to confirm or deny that this is a true cultural tradition. You have asked us not to consider this cultural claim.
X~ claims that, although the street address identified in the property rights certificate varies from the address identified in the Nansha Community Residential Committee’s November 16, 2011 statement, both documents refer to the same property. According to X~, the community changed street names after the property rights certificate was issued in January 2006. We have no information to confirm or deny this alleged change.
Laney Zhang, a Senior Foreign Law Specialist at the library of Congress, provided a report entitled China: Real Property Law, in response to OGC’s request. We relied on the information in this report in summarizing and analyzing Chinese property law.
We obtained this information in a follow-up phone call with Laney Zhang on October 15, 2014.
Should X~ die prior to the expiration of the 70-year land-use assignment, that land-use right does not terminate; rather, it transfers to X~’s heirs. Thus, the land-use right is distinct from a life estate, which typically is not countable as a resource because the owner cannot sell the life estate or transfer it upon his or her death. See POMS SI 01110.515.B; SI 01140.110.A.6 (“The owner of a life estate can sell the life estate but does not have title to the property and thus normally cannot sell it or pass it on as an inheritance.”).
In the event that X~ transfers his property right interest for less than fair market value, he would be ineligible for SSI for up to 36 months. See Social Security Act § 1613 (c)(1)(A); POMS SI 01150.001.C.3; 01150.003.
X~’s family members do not explain why their testimony should outweigh Chinese Law and the 2006 Property Rights Certificate. They also fail to explain why they waited until 2014 to submit the 2006 Property Rights Certificate to the Agency.