ParaRegs-Food-Stamps-Resources

Code

Effective

ParaReg Text

251-1

REVISED 9/06

The maximum resource limit for an FS household shall be $2,000. If the household includes one member aged 60 or older, the resource limit is $3,000. Effective October 1, 2002, the household with a disabled member also has a resource limit of $3,000. Households (which are not categorically eligible households) with resources in excess of these amounts are ineligible to participate in the FS Program. (§63-409.12; Handbook §63-1101.1, made applicable to the CalWORKs program by, e.g., Handbook §42-207.2)

251-1A

ADDED 8/04

 

Under MR/RB, excess resources shall not be counted if they are reduced to the resource limit in the month received. (§§63-504.351(b) and 63-504.372(a) prior to the implementation of QR/PB in the county)

252-1

REVISED 9/06

The home and surrounding property is excluded as a resource.  The home and surrounding property shall remain exempt when temporarily unoccupied for reasons of employment, training for future employment, illness, or uninhabitability caused by casualty or natural disaster, if the household intends to return.  Households that currently do not own a home, but own a lot on which they intend to build, shall receive an exclusion for the value of the lot and, if it is partially completed, for the home.  (§63-501.3(a))

252-2



Household goods, personal effects, one burial plot per household member, the cash value of life insurance policies and pension plans and certain Keogh plans are excluded as resources. (§63-501.3(b))

252-2A

ADDED 3/07

 

QUESTION:

Are Individual Retirement Accounts (IRAs) and 401(k) plans considered resources?

 

ANSWER:

Per MPP 63-501.11, funds held in IRAs and funds held in accessible Keogh plans that involve no contractual obligation with anyone who is not a household member are considered resources. Simplified Employer Pension Plans (SEPs), which are

considered IRAs by banks and the IRS, are also counted as resources, per Federal Administrative Notice (AN) 02-26. In counting any of these plans as a resource, the CWD shall include the total cash value of the account or plan minus the amount of the penalty (if any) that would be exacted for the early withdrawal of the entire amount in the account or plan, per MPP 63-501.113.

 

Per MPP 63-501.3(b), the cash value of pension plans or funds are excluded as

resources. The following types of retirement savings and pension plans are excluded from consideration as resources: 401(k) plans, 457 plans (plans for state and local governments and other tax-exempt organizations), Federal Employee Thrift plans, Section 403(b) plans (tax-sheltered annuities provided for employees of tax-exempt organizations and state and local educational organizations), Section 501(c)(18) plans (retirement plans for union members consisting of employee contributions to certain trusts that must have been established before June 1959) and Keogh plans that involve a contractual obligation with someone who is not a household member.

 

(All County Information Notice I-91-06, December 5, 2006)

252-3

REVISED 9/06

Property which produces annual income consistent with its fair market value is exempt, even if used only on a seasonal basis. Such property shall include rental and vacation homes. (§63-501.3(e))

252-3A

ADDED 3/07

 

QUESTION:

Does an income producing property need to generate income consistent with the total value of the home, the value after encumbrance, or consistent with what other properties in the area receive for rent?

 

ANSWER:

The property must generate income consistent with the other properties in the area. MPP 63-501.3(e), under the Handbook Section, states “To determine if property is producing income consistent with its fair market value, the County Welfare Department (CWD) may contact local realtors, local tax assessors, the Small Business Administration, Farmer's Home Administration, or other similar sources. Newspaper classified advertisements can also be used as a resource. All findings/determinations should be documented in the case file.”

 

QUESTION:

How does the CWD determine whether property annually produces income consistent with its FMV in accordance with MPP 63-501.3(e)?

 

ANSWER:

MPP 63-501.3 (e) states “Property which annually produces income consistent with its fair market value, even if only used on a seasonal basis is excluded as a resource.” It also states “Such property shall include rental homes and vacation homes.” The CWD determines whether or not a property annually produces income consistent with the FMV by assessing if the rental amount is the same as comparable homes in the area by using the following: newspaper classified advertisements, local realtors, local tax assessors, the Small Business Administration, the Farmer’s Home Administration, property management companies or similar resources.

 

(All County Information Notice I-91-06, December 5, 2006)

252-4



Resources whose cash value is not accessible to the household are to be excluded in the evaluation of resource eligibility. (§63-501.3(i), as renumbered effective June 1, 2001)

252-4A

REVISED 9/06

"Inaccessible resource" means the resource or vehicle would be exempt from consideration if its equity value is $1500 or less. (7 Code of Federal Regulations (CFR) §273.8(e)(18); 63-102(i)(4))

252-4B



Property which is essential to the employment or self-employment of a household member is exempt in the FS program. (§63-501.3(f), effective June 1, 2001)

252-4C



Prior to February 21, 2002, state regulations provided that services which have a cash value that is not accessible to the household shall be excluded. This includes property "other than financial instruments (stocks, bonds, legally binding promissory notes, etc.) or vehicles, which if sold or otherwise disposed would be likely to produce less than $1500. [Emphasis added] (§63-501.3(i)(5), effective June 1, 2001)

 

It should be noted that this regulation makes resources (not including vehicles or financial instruments) exempt when the sale of the resources would produce more than $1500. This is inconsistent with federal regulations, so any eligibility conferred under this section would be state-only FS benefits. (See, e.g., 7 Code of Federal Regulations §273.8(e)(18))

 

The CDSS has instructed counties to interpret "produce less than $1500" as "produce more than $1500" [presumably in light of the difference between federal and state regulations]. (See All-County Information Notice (ACIN) No. I-49-01, June 19, 2001) The CDSS implemented this ACIN policy by amending its regulations. (See §63-501.3(i)(5), as amended effective February 21, 2002)

252-5

REVISED 9/06

Resources whose cash value is not accessible to the household such as irrevocable trust funds are to be excluded as resources.  Funds in a trust or (effective January 1, 1996) funds transferred to a trust, and the income produced by that trust, shall be considered inaccessible to the household if the following conditions are met:

 

(A)       The trustee administering the funds is either:

 

1.         A court, or an institution, corporation or organization which is not under the direction or ownership of any household member(s); or

 

2.         An individual appointed by the court who has court imposed limitations placed on his/her use of the funds which meet the requirements of this section.

 

(B)       The funds held in irrevocable trust are either:

 

1.         Established from the household's own funds if the trustee uses the funds solely to make investments on behalf of the trust or to pay the educational or medical expenses of any person named by the household creating the trust; or

 

2.         Established from nonhousehold funds by a nonhousehold member regardless of how these funds will be used.

 

(C)       The trust investments do not directly involve or assist any business or corporation under the control, direction or influence of a household member;

 

(D)       The trust arrangement is not likely to cease during the certification period; and

 

(E)       No household member has the power to revoke the trust arrangement or change the name of the beneficiary during the certification period.

 

(§63-501.3(i)(1), effective June 1, 2001)

252-5A

REVISED 9/06

Resources whose cash value is not accessible to the household are exempt.  Such resources include:  Security deposits on rental property or utilities; property in probate; and real property which the household is making a good faith effort to sell at a reasonable price but which has not been sold.  (§§63-501.3(i)(2) - (4), as renumbered effective June 1, 2001)

252-5C



Federal FS regulations provide that certain assets are excluded from consideration as resources.  Among these exclusions are resources whose sale would not produce a significant return, or the costs of selling the household's interests are relatively great.  Specifically, the regulations provide as follows:

 

"The State agency must develop clear and uniform standards for identifying kinds of resources that, as a practical matter, the household is unable to sell for any significant return because the household's interest is relatively slight or the costs of selling the household's interest would be relatively great.  The State agency must so identify a resource if its sale or other disposition is unlikely to produce any significant amount of funds for the support of the household or the cost of selling the resource would be relatively great.  This provision does not apply to financial instruments such as stocks, bonds, and negotiable financial instruments.  The determination of whether any part of the value of a vehicle is included as a resource must be made in accordance with the provisions of paragraphs (e)(3) and (f) of this section.  The State agency may require verification of the value of a resource to be excluded if the information provided by the household is questionable.  The State agencies must use the following definitions in developing these standards:

 

"(i)        'Significant return' means any return, after estimating costs of sale or disposition, and taking into account the ownership interest of the household, that the State agency determines are more than $1,500; and

 

"(ii)       'Any significant amount of funds' means funds amounting to more than $1,500."

 

(7 Code of Federal Regulations §273.8(e)(18), as modified effective January 20, 2001, and to be implemented by June 1, 2001)

252-5D

REVISED 9/06

Federal FS regulations provide for evaluating unlicensed vehicles based solely on their equity value. (7 Code of Federal Regulations (CFR) §273.8(c)(2)).

Unlicensed vehicles are among those resources which are counted as resources only to the extent that they accessible to the household when the unlicensed vehicle is jointly owned. (7 CFR §273.8(d)) Unlicensed vehicles are included among those resources which are excluded from resource consideration when the unlicensed vehicle is in probate, or when the household is making a good faith effort to sell the vehicle at a reasonable price, and the vehicle has not been sold. (7 CFR §273.8(e)(8))

 

For food stamps, vehicles are excluded as a resource effective January 1, 2004. (§63-501.3(c))