California Department of Social Services - State Hearings Division
Notes from the Training Bureau - August 29, 1997

References: Medi-Cal Eligibility Procedures Manual (MEPM) Section 9J-pp. 13-48, 49, 50, 101; ACWDL 90-01, paraphrased regulation 483-4

If a Medi-Cal applicant purchases an annuity on or after August 11, 1993, the general rule is that payments from the annuity are considered income and if payments are deferred, the cash surrender value of the annuity is considered available property. Once an individual takes steps to receive periodic payments of principal or interest, the balance of the annuity is considered unavailable.

However, payments must be scheduled to exhaust any balance remaining in the annuity at or before the end of the annuitant’s life expectancy based on Social Security actuarial tables. If the years of expectancy tables compiled by the Actuary of the Social Security Administration, is less than the years of scheduled payments under the terms of the annuity, and if the annuity cannot be reconstructed, then the payments in excess of the annuitant’s life expectancy shall be considered a transfer of property for less than fair market value that may be a disqualifying transfer.

Written verification must be obtained from the company that issued the annuity verifying that the annuity cannot be restructured.