PROGRAM OPERATIONS MANUAL SYSTEMPart SI – Supplemental Security IncomeChapter 011 – ResourcesSubchapter 50 – Other Resources ProvisionsTransmittal No. 20, 01/20/2021
We are updating procedure for establishing disability for purposes of the resource transfer exception for transfers to a trust and clarifying procedure related to potential collateral estoppel claims.
Summary of Changes
SI 01150.121 Exceptions — Transfers to a Trust
In addition to minor formatting changes and updates to the References list, we are making the following clarifications in subsection D:
Updating the procedure for establishing disability to reflect the current business process; and
Clarifying that technicians must follow instructions in DI 11011.001 for all potential collateral estoppel claims.
The period of ineligibility for transferring a resource at less than fair market value does not apply to an individual in the following situations.
The period of ineligibility does not apply to an individual who transfers resources to a trust if either of the following is true:
the portion of the trust attributable to the transferred resources is a countable resource of the individual (i.e., the trust is countable as a resource for purposes of determining SSI eligibility). (See SI 01120.200.)
the trust would be considered a countable resource but for the undue hardship provision applicable to trusts.
The period of ineligibility does not apply to an individual who transfers a resource to a trust established for the sole benefit of the individual's child of any age who is blind or disabled. This includes trusts qualifying as “Medicaid trust exceptions” in SI 01120.200 ff. (i.e., trusts established under Section 1917(d)(4)(A) and (C) of the Social Security Act).
The period of ineligibility does not apply to an individual who transfers a resource to a trust established for the sole benefit of an individual including himself or herself who is under age 65 and is blind or disabled. This includes trusts qualifying as “Medicaid trust exceptions” in SI 01120.200 ff. (i.e., trusts established under Section 1917(d)(4)(A) and (C) of the Social Security Act).
In the following situations related to trusts, the exception does not apply:
If the trust is not countable as a resource, money or property transferred by the individual into the trust is a transfer of resources that is subject to the period of ineligibility unless one of the exceptions in SI 01150.121A.2. or SI 01150.121A.3. applies.
If a disbursement is made from a trust that is counted as a resource (or would be counted as a resource but for the undue hardship provision applicable to trusts), and the disbursement is not made to the individual or for his/her benefit, then the disbursement is considered a transfer of resources for less than fair market value. Such a transfer of resources is subject to the period of ineligibility. The date of the disbursement is considered the date of the transfer. See SI 01120.200 ff. for discussion of disbursements from trusts.
If the individual takes action so that no disbursement can be made from a trust that is counted as a resource to the individual for any reason, this action causes the trust to no longer be counted as a resource. Therefore, such an action is considered a transfer of resources for less than fair market value. Such a transfer of resources is subject to the period of ineligibility. The date of the action restricting disbursements is considered the date of the transfer.
Develop a transfer to a trust as follows:
Verify the amount of the transfer, the transfer date, and that the funds went into the trust considering the individual's statement either signed or recorded on a DROC, and available documents (e.g., bank statements, receipts, trust documents, etc.). The individual's statement, by itself, is not sufficient evidence.
As needed, verify that the individual for whom the trust was established meets the SSI requirements for blindness or disability. (See SI 01150.121D.)
As needed, verify that the individual for whom the trust was established is the child of the transferor. (The supplemental security record (SSR), master beneficiary record (MBR), or Numident may be used.)
As needed, verify that the trust was established for the sole benefit of the child or individual by reviewing the trust documents. (See SI 01150.120C. for discussion of “sole benefit”.)
Follow the guidelines in SI 01120.200 ff. to determine whether the trust is a resource of the individual.
If the trust is not a resource, the transfer exception does not apply and the individual may be ineligible due to the transfer of resources.
If the trust is a resource, the transfer exception applies. It will be necessary to determine if the individual is ineligible for SSI due to counting the trust as a resource.
If the exception applies, do not establish a period of ineligibility due to the resource transfer. Document the file with the adjudicator's determination. For example: “Resource transferred on 2/5/00. Meets exception for transfer to a trust per SI 01150.121. Period of ineligibility does not apply.”
Record the evidence used on the EVID screen found in the Shared Processes Menu (MS
Include in the file a copy of the trust document if not already in file based on the requirements in SI 01120.200J. for documenting a trust.
Record the determination on MSSICS using the File Documentation Notes section of the Property/Cash Given or Sold (RGIV) page or DROC (MS
04422.010). On non-MSSICS cases, use a Report of Contact.
Notify the State Medicaid agency about the transferred resource unless the SSI claim is denied. (SI 01150.012)
If an exception requires that the transfer was to a blind or disabled child or individual, it is necessary to establish that the child or individual was blind or disabled at the time of the transfer.
Assume that a child or individual who was eligible for SSI benefits based on blindness or disability at the time of the transfer meets the definition of blindness or disability for purposes of this exception. For this purpose, “eligible” includes an individual in a payment suspension status but not in a payment termination status.
If the individual who received the transferred resource was not eligible for SSI benefits based on blindness or disability at the time of the transfer, obtain a disability determination from the disability determination services (DDS) as follows:
Contact the individual or child who received the transferred resource and obtain an application for SSI disability/blindness benefits.
Defer development of nonmedical eligibility if income or resources would make the individual or child ineligible. However, develop nonmedical eligibility following normal procedures if the individual may be eligible for SSI.
Use the SSA-3367 to alert DDS of the SSI potential onset date (POD). See DI 25501.220 and DI 11005.045.
Show the SSI POD equal to the date of the resource transfer.
Select the SSI POD reason as ‘Other’. Explanation: “Disability determination required to determine if the SSI transfer of resource exception applies on a resource transfer to a trust. POD represents the date of this transfer. See SI
If a current Title II medical allowance exists with an established onset date (EOD) equal or prior to the date of the resource transfer, also follow instructions in DI 11011.001 to develop for SSI disability in potential collateral estoppel claims.
Hold the case in H80 payment status pending the DDS determination.
When the DDS determination is received, process the SSI claim to pay or denial.
Use the DDS determination to conclude if the individual who transferred the resource qualifies for the transfer exception or is subject to a period of ineligibility.
If the DDS determination for the person who received the transferred resource is a denial or a partially favorable allowance with an onset established after the date of the resource transfer, determine the period of ineligibility. Do not delay the adjudication of the transferor's SSI claim even if an appeal is filed on this disability determination.
If the individual who received the resource refuses to file an SSI disability claim, the exception does not apply for the transferor.
NOTE: If the individual who transferred the resource is filing for SSI based on disability, send that case to the DDS at the same time as you send the case for the individual who received the transferred resource.
DI 11005.045 Completing the SSA-3367
DI 11011.001 Collateral Estoppel - General
DI 25501.220 Potential Onset Date (POD)
MS 01701.003 Evidence Screen (EVID)
MS 04422.010 Report of Contact (DROC)
SI 01120.200 ff. Trusts
SI 01150.012 Notifying State Medicaid agency