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Chapter 5 Resources

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NORTH CAROLINA DIVISION OF SERVICES FOR THE BLIND
PROGRAMS AND FACILITIES SECTION
SPECIAL ASSISTANCE FOR THE BLIND PROGRAM


Section:

Chapter 5

Title:

Resources

Revision History:

Revised 08/02


This section outlines the resource requirements used in determining eligibility. The resource limit is $2000 for an applicant/recipient and his/her family unit. A family unit is one or more persons domiciled under one roof and existing as a unit. Resources are all financial resources that an a/r owns or has the right, authority, or power to convert to cash, and are legally available for the a/r’s support and maintenance, including month of entry into an eligible licensed facility.

Follow the steps below for SSI and Non-SSI recipients.

I. Variable Resource Situations

A. Solely owned resources

B. Jointly held resources

The availability of resources owned jointly by the a/r and another person must be verified, documented, and may be counted:

1. If the other person is a recipient of another public assistance program (Work First, Medicaid, Special Assistance, SAB, or SSI):

(a) Count one-half of the value of the jointly owned resource, or

Note: If more than two owners, then divide the value equally among the owners.

(b) If there is a legally binding agreement specifying how resource is to be divided, count the share specified in the agreement as owned by the a/r.

2. If the other person is not a recipient of public assistance program, count the total value of the a/r's share of resources owned if:

(a) The a/r can dispose of the resource without the consent and participation of the other person(s), or

(b) The other person(s) agrees to and, if necessary, participates in the disposal of the resource.

Verify other owner(s) statement regarding their consent to sell the resource.

(1) If the owner(s) consents to the disposal of the resource, count the a/r's share of the resource.

(2) If the other owner(s) does not respond/cannot be located, do not count a/r's share of the resource.

(3) If the other owner(s) do not consent to the disposal of the resource, do not count the a/r's share of the resource

C. Unsettled Estates

II. RESOURCES (IN ALPHABETIC ORDER)

Resource

Count

Do Not Count

Verification

Agent Orange Benefits

 

X

Refer to Lump Sums Exclusion Chart, III. G. 4., page 51.

Annuities (if principal is available)

X

 

Refer to III.E., page 48.

Bank Accounts (includes checking, savings, CDs, and money market accounts)

X

 

Refer to III.C., page 46.

Boats, boat motors, and boat trailers (if not primary homesite)

X

 

Refer to III.M.1.d.e.f., pages 64, 65.

Burial Contracts

    • Prepaid Irrevocable (cannot be sold or “cashed-in”)

 

X

Refer to III.L, page 64.

    • Revocable (can be sold or “cashed-in”)

X

 

Refer to III.L. page 64.

Burial Insurance (Face value does not exceed $10,000)

Must evaluate to determine if resource is countable or not countable

See Life Insurance, III.K., pages 62, 63.

Burial Plots/Space

 

X

Refer to V.C., page 72.

Business, Discontinued Proceeds (including farm)

X

 

Refer to III.J., page 62.

Business Equipment

    • Not used to produce income

X

 

Refer to III.M.1.j., page 65.

    • Used to produce income

 

X

Refer to III.M.1.j., page 65.

Campers (if not primary homesite)

X

 

Refer to III.M.1.g., page 65.

Cash

X

 

Refer to III.A., page 46.

Cash and in-kind receipts for repair or replacement of lost, damaged, or stolen excluded resources

 

X*

Refer to III.G.4., page 51.

Disaster Relief

 

X

Refer to III.G.4., page 51.

Farm Equipment

    • Not used to produce income or to produce goods for home consumption

X

 

Refer to III.M.1.i., page 65.

    • Used to produce income

 

X

Refer to III.M.1.i., page 65.

    • Used to produce goods for home consumption (up to $6,000 in total combined equity)

 

X

Refer to III.M.1.i. page 65.

Heir Property

 

X

Refer to I.C., page 40.

Investments (Bonds, Mutual Funds, Stocks/Securities)

X

 

Refer to III.F., page 49.

Jointly Owned Property

    • Tenancy in Common

 

X

Refer to V.B.3., page 72.

    • Tenancy by the Entirety

Must evaluate to determine if resource is countable or not countable

Refer to I.B., page 39.

Life Estate (Lifetime Right)

 

X

Refer to V.B.1., page 72.

Life Insurance (which accrues cash value)

Total face value $10,000 or less for the a/r.

 

X

Refer to III.K., pages 62, 63.

    • Total face value over $10,000 for the a/r

X

 

Refer to III.K., pages 62, 63.

Life insurance (which does not accrue cash value)

 

X

Refer to III.K., page 62.

Liquid resources of a business

 

X*

Refer to V.F., page 78.

Lump Sum Payment

Must evaluate to determine if resource is countable or not countable

Refer to III.G., pages 50-53.

Mobile Home (if not primary homesite)

X

 

Refer to III.M.1.c., page 64.

Motor Vehicles (including motorcycles)

    • Licensed (no more than one)

 

X

Refer to III.M.4.b.(1), page 66.

    • Unlicensed

X

 

Refer to III.M.4.b.(3), page 66.

Motorized Mobile Home (if not primary homesite)

X

 

Refer to III.M.1.c., page 64.

Patient Accounts

X

 

Refer to III.B., page 46.

Personal Effects (i.e. Household goods)

 

X

 

Proceeds from sale of excluded homesite

 

X*

Refer to Lump Sums Exclusion Chart, III. G. 4., page 51.

Promissory Notes

    • Non-Salable

 

X

Refer to III.H., page 53.

    • Salable

X

 

Refer to III.H., page 53-54.

Real Property

    • Homesite

 

X

Refer to V., page 69-72.

    • Not Homesite

X

 

Refer to IV., page 67-69.

Relocation Assistance from State or local government

 

X*

Refer to III.G.4., page 51.

Relocation Assistance Payments Received under Title XX of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970

 

X

Refer to III.G., page 51.

Remainder Interest

 

X

Refer to V.B.2., page 72.

Restricted allotted land owned by an enrolled member of an Indian tribe

 

X

Refer to V.H., page 80.

Resulting Trust / Legally Binding Agreements

X

 

Refer to V.E., page 73.

Retirement Accounts (401(K), IRA, KEOGH)

    • Accessible

X

 

Refer to III.D., page 47, 48.

    • Non-accessible

 

X

Refer to III.D., page 48.

Rights of Use (Mineral, Timber, Hunting, Fishing, etc.)

X

 

Refer to VI.B.1.a(3), pages 106-107.

Tobacco Allotment

 

X

Refer to V.G., pages 79-80.

Trust Funds

    • Revocable

X

 

Refer to III.I., page 54.

    • Irrevocable

 

X***

Refer to III.I., page 55.

Victim’s Compensation Payments

 

X*

Refer to Lump Sums Exclusion Chart, III. G. 4., page 51.

* Time limited exclusion
** May be time limited or permanently excluded
*** May be time limited exclusion, permanent exclusion, or countable depending on other conditions of trust

NOTE: All income produced by a countable or excluded resource must be considered when determining eligibility for the a/r.

III. LIQUID RESOURCES

A. Cash

Accept a/r statement for cash on hand as of the first moment of the first day of the month as verification.

NOTE: Count as resources all cash except cash that is counted as income.

If the a/r has a patient account, verify with the business office manager of facility or the bank (if it is deposited in an account for the a/r), the closing balance as of the last working day of the month preceding the verification month. Document the countable amount and the verification of the account balance.

Determine and document if the a/r owns an IRA, Keogh, or 401(K) account. If a/r acknowledges an IRA, Keogh, etc. verify the following:

E. Annuities

1. Document if a/r has any annuities.

2. To verify:

a. Request a copy of the terms of the annuity.

b. Contact the source of the annuity.

3. Determine the value of the resource.

a. Annuity principal which is available is a countable resource.

b. Evaluate a policy that has not been annuitized (method of payment selected) as whole life insurance to determine if the cash value is countable.

c. Burial annuities should be considered as an irrevocable burial trust.

NOTE: Payments by an annuity are counted as income.

F. Investments (Bonds, Mutual Funds, Stocks/Securities)

1. Determine if the a/r owns any securities (stocks, bonds, mutual funds).

2. Document the a/r’s statement on the following:

a. The name of the stock or mutual company or financial institution where the security (stocks, bonds, mutual funds) was purchased, and

NOTE: Verify series and date of issuance for all bonds

b. The account numbers, and

c. Number of shares, and

d. The value of the security (stocks, bonds, mutual funds).

Exclusion Period

Type of Lump Sum

2 Mths

6 Mths

9 Mths

Permanent

Proceeds from sale of excluded homesite (if used to purchase another excluded home)

X

     

Social Security / SSI

 

X

   

Cash and in-kind receipts from any source for the replacement or repair of lost, damaged, or stolen excluded resources *

   

X

 

Victim’s compensation payments **

   

X

 

Relocation Assistance (state/local issued) ***

   

X

 

Relocation Assistance (federally issued)***

     

X

Presidentially Declared Disaster Relief (all funding sources)

     

X

Agent Orange Benefits

     

X

* Exclude for up to an additional 9 months for cash receipts if for the first nine months, circumstances beyond the a/r’s control prevent repair or replacement of the lost, damaged, or stolen property, and keep the a/r from contracting for such repair or replacement. The interest earned on these funds is excluded from income and resources for the same time period.

** To be excluded, the a/r must demonstrate that the payment was compensation for expenses incurred or losses suffered as a result of crime. Count interest earned from lump sum payment as resources or income (Refer to Chapter 6, Income).

*** Count interest earned from lump sum payment as resources or income (Refer to Chapter 6, Income).

Exclude the value of any property agreement which is not legally negotiable (cannot be sold). This includes promissory notes, loan agreements, etc.

A property agreement (usually a promissory note) which can be sold is a countable resource.

1. Verification of the promissory notes is required, and may consist of:

a. A/R records;

b. Copies of agreement; or

c. Statements from the a/r, as well as from the borrower.

2. Verify with the following procedures:

a. Examine the terms of the agreement or note to determine if the owner has the legal right to sell his/her interest without the participation of the buyer/borrower. If salable, count the balance due on the note as an available resource.

b. If there is a clause which prevents sale or transfer of the note, it is not a countable resource.

c. Contact the local DSS/County attorney for assistance if negotiability cannot be determined from the terms of the agreement.

d. Count any payments as unearned income (salable or non-salable)

e. The a/r may rebut the value of the agreement. See procedures in Rebuttal section, VI.C., page 112.

I. Trust Funds

J. Net Proceeds from a Business or Farm which have been Discontinued

K. Life Insurance

The cash surrender value of life insurance policies are accessible and are a countable resource when the original face value of all cash accruing policies owned by the a/r exceeds $10,000.00. Determine if the a/r owns or has recently purchased insurance at application and each redetermination.

NOTE: If the policy does not accrue cash value DO NOT count the face value as a resource. For example, term life/burial associations usually do not accrue cash value.

1. Verify life insurance policies by:

a. Examining the actual policy for:

(1) The name of the Insurance Company

(2) Policy number

(3) Name of the insured (on whose life the policy is written)

(4) Owner of the policy

(5) Original Face Value; or

b. Contacting the life insurance company with a letter and a copy of page 9 of DSB-7204 to verify the following:

(1) All policies owned by the a/r, including type and policy number(s);

(2) Original face value;

(3) Cash value;

(4) Loans against policy (loan amount and date); and

(5) Name of the insured

L. Prepaid Burial Contracts

M. Personal Property

1. Personal Property includes, but is not limited to:

a. Motor vehicles (including motorcycles)

b. Junked motor vehicles

c. Mobile Homes

d. Boats

e. Boat Trailers

f. Boat Motors

g. Campers

h. Trailers

i. Farm Equipment

NOTE: If resource is considered farm equipment and is used to produce income or to produce goods for home consumption, do not count the value of the resource. Refer to V.D., page 72.

j. Business Equipment

NOTE: If resource is considered business equipment and is used to produce income, do not count the value of the resource.

2. Document the a/r’s response to the following questions:

a. The name of the owner(s) of the resource

b. The year, make, and model of the resource

c. Whether the vehicle is licensed

d. How the resource is used

e. If there is an amount owed on the resource and where it is financed

IV. REAL PROPERTY

Real property consists of land and any attachments such as dwellings and other buildings.Document the a/r’s statement regarding ownership and location of real property.

A. Verify the Ownership of Real Property by:

B. Determine the Equity Value of All Real Property by:

1. Verifying the tax value by using tax records;

2. Verifying encumbrances with the lienholder

a. Determine if there are any debts or loans (encumbrances) owed on the resource. Verify the payoff amount owed as of first day of the verification month by contacting the creditor (bank, finance company, etc.). If there are no encumbrances, the value is the equity value.

b. Subtract the amount owed on the resource from the value. The remainder is the equity value. If the encumbrances exceed the value, there is no equity value for the resource.

C. Evaluate the Sale or Transfer or Real Property by:

V. Special Instructions for Resource Exclusions

A. Homesite Property

The homesite is the one dwelling the individual considers his/her established or principal home. In an unincorporated area, a homesite may include a house and approximately one acre of land. In a town or city, a homesite may include a house and the lot on which the house is situated. It can be fixed or mobile and located on land or water (e.g., house, mobile home, camper, house boat, motor home).

Do not count the value of the homesite if:

B. Non-Countable Ownership Interests

The following types of ownership interest in real property are not counted:

D. Exclude Personal and Real Property Used by the A/R:

E. Resulting Trusts/Legally Binding Agreements

F. Liquid Assets of a Business

1. Determine if the a/r has liquid assets needed to operate a business.

2. Verify the status of bank accounts used in the operation of a business.

a. DBA (doing business as) account- Verify with the bank and the records of the DBA account that these funds are not used for personal bills

b. Combined with personal funds- If the bank account is used for personal and business transactions, the business assets must be separately identified to be excluded.

G. Tobacco Allotments

Tobacco allotments are administered by the Farm Service Agency and provide the right to produce a certain number of pounds of tobacco for harvest.

In determining the resources of an individual (and spouse, if any) who is of Indian descent from a federally recognized Indian tribe, any interests of the individual (or spouse) in trust or restricted lands are excluded from resources.

I. Incompetency

When an a/r has excess resources and he/she is alleged to be incompetent or has been ruled incompetent by a North Carolina court, use the following policy to determine if the resources may be excluded.

VI. REDUCTION OF RESOURCES

The purpose of this section is to outline procedures for reducing resources to establish eligibility for SAB. If countable resources exceed the SAB limit on the first moment of the first day of the month, the a/r does not meet resource requirements until the next calendar month. The exception to this rule is if the burial exclusion is sufficient to reduce resources to the allowable limit.

A. Reduction of Liquid Assets

The a/r can reduce his/her cash resources by paying for goods and services at fair market value that benefit the a/r (e.g., paying off their debts or paying for room and board at an adult care home).

1. Verification

a. Cash

(1) Ask a/r to provide receipts for purchases.

(2) A/R’s written statement.

b. Bank Accounts

(1) Determine the amount of any outstanding checks. Do not consider a check as outstanding if it is more than six months old.

(2) Evaluate whether checks were written and either mailed or delivered to the payee prior to the first moment of the verification month BUT had not cleared the bank prior to the first moment of the verification month.

(3) Once the check has cleared the bank, verify the date it cleared from the bank statement or by written or verbal contact with the bank.

(4) If available, compare the checkbook register (or check stubs) to the bank statement.

(a) Use the a/r’s checkbook register (or check stubs) to verify the:

1)Date the outstanding check was written,

2) Check number,

3) Payee of the check, and

4) Sequential order of dates and check numbers.

(b) Use the bank statement to verify that the check did not clear the bank prior to the first day of the month.

(5) If the checkbook register (or check stubs) is not available, incomplete, or the order of dates and check numbers is not clearly sequential, verify outstanding status of the check by:

(a) Written or verbal verification from the bank that a stop payment against the check has not been requested, and

(b) A signed, dated statement from the a/r (or the person who actually signed the check) which includes:

1) Check number,

2) Date the check was mailed or hand delivered,

3) Amount of the check, and

4) That the check is for payment of a valid expense.

2. Determine the countable resource amount.

a. Use the verified checking account balance.

b. Subtract verified outstanding checks from the balance.

c. Do not deduct a check written in advance for prepayment of cost of care.

d. If the a/r’s Social Security and/or SSI is direct deposited and either one or both checks are deposited early (prior to the first day of the month in which the check counts as income), deduct the early payment(s).

e. Count the remainder as the countable resource amount from the checking account.

f. It there is excess resources, and the a/r uses the account to deposit income from rental property or self-employment, deduct outstanding or future expenses incurred to produce the income using the following guidelines:

(1) Convert the gross income and expenses to a monthly amount per Chapter 6, Income.

(2) Deduct from the opening balance any portion which is counted as income or can be deducted as an operational expense for the current month and any future month.

(3) Do not deduct any portion which was income or expenses for past months.

g. Document the countable amount and the verification of the account balance and outstanding checks.

3. Burial Exclusion

B. Reduction of Real/Personal Property

C. Rebuttal Procedures

The a/r may rebut the value of countable resources including real property, promissory notes, and personal property.

The tax value of real property and the current market value of a promissory note may be rebutted by documentary evidence to establish a lesser value.

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