5200 General Guidelines

5200 General Guidelines

The following general rules are applicable.

1. Resources must be real (i.e., their value can be defined and measured).  
2. Value of resources must be established by objective measurement. In some instances, it is possible for a piece of property to have no market value if it can be established that the property cannot be sold for any price. A statement that the property is not saleable due to a specific condition from one or more knowledgeable sources (i.e., bankers, realtors, etc.) in the applicable geographic area could be used for this purpose. Such condition should be reviewed at each redetermination to ascertain if there have been any changes and to adjust the value, if appropriate. It is also possible that a client may own a marketable piece of property with no equity value such as when encumbrances exceed the market value. In either instance, the property shall be deemed to have no value. 
3. Resources must be available. Resources are considered available when an applicant/recipient has a legal interest therein and the legal ability to make them available.   
   1. A resource shall be considered unavailable when there is a legal impediment that precludes the disposal of the resource. A legal impediment is a barrier to a person’s ability to use or enforce some rights in property or at law. Property is considered unavailable due to legal impediment if the individual does not have the legal right to access property and the property cannot be sold on the open market or, for non-cash property, converted to cash. The refusal or failure of an individual to take actions to make property available, if within the individual’s legal rights to do so, does not constitute a legal impediment.

      An example of a legal impediment may include property held pending final action by a court, such as in a divorce proceeding or boundary dispute as the individual does not have access to such assets. However, the refusal of a joint owner to sell property does not constitute a legal impediment, as the remaining owner has the right to sell their share. The existence of a lien is not considered a legal impediment, but rather an encumbrance against the property thereby reducing the countable value.  For a legal impediment to exist, the following are required:

      1. Verification of the impediment. The impediment must be documented through copies of deeds, titles, wills, court orders, etc. in order to verify the status of the property. A detailed, written explanation of the situation may also be provided as evidence to support the alleged impediment.
      2. A reasonable attempt to overcome the impediment. Prior to establishing a legal impediment, the individual must demonstrate that reasonable steps have been taken to overcome the impediment. If such attempts have been made and verified and a resolution does not appear to be immediate, the property is considered unavailable. However, the individual must continue to pursue reasonable steps to overcome the impediment. Such actions must be scheduled and routine, with the frequency and nature dependent upon the situation. If it is determined the cost of overcoming the impediment would exceed the gain to the individual, the property is considered unavailable. However, should changes occur which might change the outcome, or result in the availability of the property, it may become necessary for the individual to again attempt to overcome the impediment. As applicants and recipients are required to access their own assets, when possible, failure to cooperate in removing a legal impediment may result in negative action as per 2124. 
   2. If the individual owns excess nonexempt real property and such property is available, assistance shall be provided if the individual is making a bona fide and documented effort to dispose of the property. Evidence of a bona fide effort could include a current listing with a real estate company, statement from a realtor that the client is actively showing the property, for sale sign on property, and ads in the newspaper. The initial asking price should be consistent with the fair market value of the property and shall be regularly adjusted. Reasonable offers for the property should be accepted. Bona-fide effort activities should be reviewed on a semiannual basis.

   Nonexempt real property shall not be considered available for so long as it cannot be sold because the property is jointly owned, and its sale would cause undue hardship due to loss of housing for the other owner(s). Documentation is required that the other owner(s) is using the property as a home. Once loss of housing is no longer at issue, the property shall be considered as an available resource.

4. Also to be excluded as unavailable resources are non-liquid assets against which a lien has been placed as a result of taking out a business loan and which the household is prohibited by the security or lien holder (creditor) from selling. Examples of such non-liquid assets could be land, crops, buildings, farm equipment, or machinery.
5. Ownership of excess nonexempt personal property shall result in ineligibility.  
   1. If an individual owns excess nonexempt personal property and such property is available, assistance shall be provided for a period of up to 9 months if the individual is making a bona fide and documented effort to dispose of the property. Evidence of a bona fide effort could include ads in newspapers, a sales price consistent with the fair market value of property and use of a for sale sign. 

      If the property is not sold within the specified time-period, the assistance unit is ineligible. However, assistance provided during the disposal period shall not be considered overstated eligibility and is not subject to repayment.  See 11122 (2).

      When there has been no documented attempt to dispose of the property in a month (including prior medical eligibility), such property shall be viewed as being actually available. Liquid cash assets are to be considered as available to meet current needs and, thus, are not subject to the bona fide effort provisions.

   2. Resources shall also be considered unavailable to persons in shelters for battered persons and children if: (1) the resources are jointly owned by the shelter resident and members of the former home; and (2) the shelter resident's access to the value of the resource is dependent on the agreement of a joint owner who still resides in the former home.
6. Ownership of property is determined by legal title. In absence of legal title, ownership shall be determined by possession. Note special provisions related to SSI in item (11) and to HCBS arrangements in item (9), (10) and (11).
   1. Joint Ownership - The pro rata equity value of jointly owned real property and the full equity value of jointly owned personal property shall be considered in the determination of eligibility except as noted in item (b) below.  For a resource held jointly with an individual who is not a member of the household or assistance plan, the resource may be excluded from consideration if all of the following conditions are met:  
      1. The individual can demonstrate the household/assistance plan member has no ownership interest in the resource.  
      2. The household/assistance plan member has not contributed to the resource; and  
      3. Any access to the resource is limited as acting as an agent for the other owner.
   2. Specified Interest in Real Property - If a specific and discrete property interest less than 100% is designated for a joint tenancy real property, the full value is considered in the determination of eligibility. 

      Example: Mr. R, a Medicaid applicant, presents a joint tenancy deed listing him as 75% owner of a parcel of real property. Mr. X owns the remaining 25%. Because the Medicaid applicant owns a specified interest in the property, the entire equity value of the property is attributable to Mr. R.  In contrast, if Mr. R and Mr. X have a standard joint tenancy deed, the pro rata share is attributable to Mr. R.

      Where a specified interest is designated, the full value of property is considered regardless of other exemptions, including income producing property and property used as a home.

      NOTE: This provision only applies to joint tenancies in real property, and not to other joint ownership interests such as a tenancy in common or tenancy by the entirety.  A specific and discrete property interest less than 100% designated for a tenancy in common or tenancy by the entirety in real property that was created within the appropriate look back period shall be reviewed under the transfer of property provisions (5700 and subsections).

7. The resource value of property shall be the client's equity in the property. Equity is defined as fair market value less encumbrances. 

   Outstanding checks are treated as encumbrances against a checking or savings account and the value of the account is to be reduced by checks which have not been cashed or cleared the bank beginning in the month the funds were originally committed (i.e., the date the check was written and received). Documentation of the payment amount and date is required.

8. Resources of all persons whose needs are included in the assistance plan must be considered, except for a child’s determination. (See 5130).   
9. The total resources of both spouses shall be considered in determining the eligibility of either or both for assistance if they are living together (including physical separation while maintaining a common life). This provision is not applicable when one or both spouses enter an institutional or HCBS arrangement. See 8141 and 8142 (1) for institutional arrangements and 8241 and 8242 (1) for HCBS arrangements.
10. Reserved  
11. The resources owned solely by an SSI recipient (including a spouse or parent) are excluded from consideration except when the provisions of 8141 and 8142 (1) for institutional arrangements and 8241 and 8242 (1) for HCBS arrangements are applicable.
12. A conversion of real and personal property from one form to another shall not be considered as income unless there are proceeds from a contract from the sale of property.  A resource may change form and thereby result in the loss or gain of exempt status.
13. A resource shall not be considered as property and as income in the same month. For instances when income received in a month is deposited into a checking or savings account, the value of such account for that month shall be determined by subtracting the total amount of income deposited from the lowest balance of the account. In situations where deposit information is not available, the resource value of a bank account is determined using the lowest available balance of the account for that month. Bank statements shall be requested of the consumer if account balances verified by the AVS at review, when combined with other countable resources, exceed the applicable resource limit. This is not applicable to spousal impoverishment assessments in which the highest value of the account in a month would be used. 

    Also see item (7) for establishing the value of a checking or savings account.

14. An applicant or recipient with otherwise resource disqualifying assets may voluntarily contribute those assets towards his/her long term care share of cost to reduce resources below the allowable limit.  This is a voluntary optional process available to the applicant/recipient and may not be mandated by the agency.  When a voluntary contribution has been made, the patient liability, client obligation, or participant obligation shall be increased by the amount of the contribution.  The amount and duration of any voluntary contribution shall be agreed to by the applicant/recipient and documented in the case file prior to implementation.  See 5430(26), 6410 (72), 8142 (3), 8172.4, 8243 (4), and 8270.4.

    The resource (i.e.: checking account, savings account, cash asset, etc.) being used to make the voluntary contribution shall be reduced by the amount of the contribution effective with the month in which the voluntary contribution is being applied.

    The resource shall reflect the new adjusted value beginning with that month and for all months thereafter, unless there has been some other documented change in the value of that resource.