Chapter 47 - § 47.6 • FINANCIAL ELIGIBILITY REQUIREMENTS
| Jurisdiction | Colorado |
§ 47.6.1—Distinguishing Between Income and Resources
An SSI recipient can have up to $2,000 in countable resources44 and still retain SSI eligibility.45 The author has experienced situations where individuals feel that they have exceeded this limitation when they receive their monthly income (e.g., the monthly SSI benefit of $750), and the deposit of that sum plus the amount already in their bank account exceeds $2,000. However, such an analysis is incorrect because it counts the dollars received as a monthly benefit twice: once as income to the recipient, and once as his or her assets. SSI rules prohibit such double counting. The correct analysis is found at 20 C.F.R. § 416.1207:
(d) Treatment of items under income and resource counting rules. Items received in cash or in kind during a month are evaluated first under the income counting rules and, if retained until the first moment of the following month, are subject to the rules for counting resources at that time.
Under this analysis, the monthly SSI benefit referred to above could not be counted against the resource limitation unless the balance in the bank account, including the SSI benefit, exceeded $2,000 on "the first moment of the following month." Interestingly enough, a change in the value of a resource during the course of the month is not considered income (or a lack thereof), but is analyzed within the scope of the rules on resources by counting the change in value as of the first moment of the month immediately following the month in which the change occurred.46
Another situation in which there might be confusion on this issue concerns the effect of the sale of resources. Although this looks like the receipt of income to the SSI recipient, it is really only the conversion of a resource from one form to a more liquid form.47
§ 47.6.2—Availability of Income and Resources
The concept of "availability" is critical to the analysis of financial eligibility. The general idea is that, though an individual may have facial ownership of income or resources, the assets cannot be counted against the individual unless he or she has actual control over them. It is this concept on which much of the law of the effect of a beneficiary's interest in a trust on SSI and Medicaid eligibility is premised. The relevant SSI regulations are:
Income is anything you receive in cash or in kind that you can use to meet your needs for food and shelter.48
. . . (a) Resources; defined. For purposes of this subpart L, resources means cash or other liquid assets or any real or personal property that an individual (or spouse, if any) owns and could convert to cash to be used for his or her support and maintenance. (1) If the individual has the right, authority or power to liquidate the property or his or her share of the property, it is considered a resource. If a property right cannot be liquidated, the property will not be considered a resource of the individual (or spouse).49
Thus, the general rule is that one's ownership of property in and of itself is not sufficient to render the property countable for SSI eligibility purposes. Instead, SSI must show that the person can use the income and resources for his or her own benefit to count that income against the person.
There are exceptions to this rule. Perhaps the most difficult exception is the rule that funds garnished from a person's income are still counted for income eligibility purposes.50 This regulation has been upheld by the courts in the context of SSI eligibility and the garnishment of one's conventional Social Security benefits because of the failure to pay child support.51
Another exception to the availability rule is the concept of "deeming." SSI defines deeming as "the process of considering another person's income to be" the income of the SSI recipient. Thus, the other person's income is "deemed" to be that of the SSI recipient, even if the SSI recipient does not have control of the funds. The two major contexts in which this occurs are when an SSI recipient lives with his or her spouse who is not an eligible SSI recipient and when an SSI recipient is a child living with his or her parent. In these instances, the income of the spouse or parent is deemed to be available to the SSI recipient, regardless of whether it actually is available.52
The concept of availability is narrowed in a way favorable to SSI recipients by the fact that 20 C.F.R. § 416.1102 limits its applicability to a benefit received "in cash or in kind that you can use to meet your needs for food and shelter." Thus, a non-cash benefit received for something other than food or shelter is not considered income. Examples would include the payment by a third party of an SSI recipient's medical, transportation, telephone, clothing, and educational expenses. It is this limitation that allows certain types of distributions from trusts to SSI recipients without adverse effect on eligibility.
Another twist on the availability principle is that of unknown assets. A person cannot be said to be able to use an asset if he or she does not know it exists. SSI recognizes this problem:
An individual may be unaware of his or her ownership of an asset. If this is the case, the asset is not a resource during the period in which the individual was unaware of his/her ownership.53
The POMS states that in the month of discovery, the asset is considered income and becomes a resource in the following month. Moreover, documentation is necessary to establish the lack of knowledge on the part of the SSI recipient.
Another interesting twist on the availability principle arises out of the problem encountered when attempting to sell an asset. The rules require that an SSI recipient who transfers ownership of a resource receive fair value in exchange.54 But fair value can usually only be obtained if the individual can market the property for a reasonable period of time. Thus, SSI rules allow an SSI recipient a certain period of time in which to sell assets that would otherwise disqualify the recipient, during which time the asset is not countable for eligibility purposes.55 The time period given is nine months for real estate and three months for personal property. The individual must also agree, in writing, to dispose of the resources at fair market value and repay any benefits paid with the proceeds of the sale.56 Note that if a reasonable effort to sell real property is unsuccessful within the nine-month period, the property remains not countable against the resource limit as long as reasonable efforts to sell continue, and benefits paid after the nine-month period has elapsed are not subject to repayment upon sale of the property.57
A situation can arise in which assets not owned by the SSI recipient can be counted against him or her even though the recipient has no present ownership interest in the funds. The classic example arises out of jointly owned bank accounts. Colorado law provides that bank accounts owned by two or more persons are owned by them in proportion to their contributions to the account unless there is evidence of a different intent.58 However, SSI presumes that the funds in such an account are owned by the SSI recipient. Fortunately, the presumption is overturned easily by the provision of statements from joint account owners along with the provision of proof of the deposits in the account, as well as a severance of the ownership interest into separate accounts.59
§ 47.6.3—Income Eligibility
As has already been noted, the income one receives from other sources is counted in the process of determining SSI eligibility. The mere receipt of income from another source will not, in and of itself, deny a cash benefit to a person, but may result in a reduction in the monthly amount payable by SSI. The general principle is that if, after...
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