63-501 RESOURCE DETERMINATIONS 63-501

(a) The home and surrounding property which is not separated from the home by intervening property owned by others. Public rights of way, such as roads which run through the surrounding property and separate it from the home, will not affect the exemption of the property. 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 or are purchasing a lot on which they intend to build or are building a permanent home, shall receive an exclusion for the value of the lot and, if it is partially completed, for the home.

(b) Households goods, personal effects, including one burial plot per household member, the cash value of life insurance policies, the cash value of pension plans or funds, and Keogh plans which involve a contractual relationship with individuals who are not household members.

(c) Vehicles shall be excluded.

(1) Renumbered to MPP Section 42-215.481 by Manual Letter Nos. FS-04-01 and EAS0401, effective 1/1/04.

(2) Renumbered to MPP Section 42-215.482 by Manual Letter Nos. FS-04-01 and EAS0401, effective 1/1/04.

(d) Resources with an equity value of $1,500 or less, excluding financial instruments such as stocks, bonds and negotiable financial instruments.

(e) Property which annually produces income consistent with its fair market value, even if only used on a seasonal basis. Such property shall include rental homes and vacation homes.

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To determine if property is producing income consistent with its fair market value, the 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.

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(f) Property which is essential to the employment or self-employment of a household member.

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(1) Property may be farmland or work-related equipment, such as the tools of a tradesman or the machinery of a farmer.

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(2) Resources of a business that are identifiable, such as funds in a checking or savings account, whether maintained exclusively for business purposes or commingled with nonexcluded funds, shall be excluded from resources to the extent that the funds represent averaged self-employment income and the funds necessary to produce that income, for the period of time over which the funds have been averaged as specified in Section 63-503.412.

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(A) For example:

A farmer receives gross income of $4500 from the sale of his crop. This money is deposited into his joint business/personal checking account which already contains $500 in personal funds. The personal funds are an includable resource for food stamps because they are not essential to the farmer's business. The $4500 is not includable as a resource for two reasons. First, the gross amount less expenses of $1500 has already been counted as income in accordance with Section 63-503.41. $250 has been determined as the monthly average of the net annual income, $3000 ($3000 divided by 12 months). Secondly, the money is essential to the farmer's business.

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(3) When a household member ceases to be self-employed in farming, property which was essential to this self-employment will continue to be excluded as a resource for a period of one year from the date of termination.

(g) Installment contracts for the sale of land or buildings if the contract or agreement is producing income consistent with its fair market value. The exclusion shall also apply to the value of the property sold under the installment contract, or held as security in exchange for a purchase price consistent with the fair market value of that property.

The full value of trust deeds and notes receivable shall be considered exempt liquid resources provided that the household receives income from the trust deed or note receivable that is consistent with its fair market value. The interest portion of the repayment of these transactions shall be counted as unearned income to the household in accordance with Section 63-502.125. The principal portion of the repayment shall be treated as a nonexcluded resource and added to the household's resource level. If the payments are for interest only, then it shall be determined whether that amount represents an appropriate rate of return on the transaction.

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If the CWD determines the rate of return is not consistent with interest rates normally charged in similar business transactions, then the resource shall not be exempted. Installment contracts, trust deeds, and notes receivable shall lose their exempt status when sold.

(h) Any governmental payments which are designated for the restoration of a home damaged in a disaster, if the household is subject to a legal sanction if the funds are not used as intended. Such payments shall not be limited to those made by the Department of Housing and Urban Development through the individual and family grant program, disaster loans, or grants made by the Small Business Administration.

(i) Resources which have a cash value that is not accessible to the household, such as, but not limited to:

(1) Irrevocable trust funds.

Any funds in a trust or transferred to a trust, and the income produced by that trust, shall be considered inaccessible to the household if all of the following 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; 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 Section 63-501.3(h);

(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 non-household funds by a non-household 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 will not likely 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.

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(2) Security deposits on rental property or utilities,

(3) Property in probate,

(4) Real property which the household is making a good faith effort to sell at a reasonable price and which has not been sold, and

(5) Property, other than financial instruments (stocks, bonds, legally binding promissory notes, etc.) or vehicles, which if sold or otherwise disposed would produce more than $1,500.

(A) Repealed by CDSS Manual Letter No. FS-01-02, effective 6/1/01.

(B) Repealed by CDSS Manual Letter No. FS-01-02, effective 6/1/01.

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(6) If information is questionable, as defined in Section 63-300.53, verification shall be obtained through a collateral contact or documentation.

(j) Resources, such as those of students or self-employed persons, which have been prorated as income. (See Section 63-503.212(b) on determining and averaging income and Section 63-503.41 on the treatment of self-employment income.)

(1) Where an exclusion applies to the use of a resource by or for a household member, the exclusion shall also apply to the use of a resource by or for an ineligible alien or a disqualified person whose resources are considered available to the household.

(k) Resources and/or income of Native Americans and Alaska Natives as specified in Section 63-506.

(l) Resources and/or income that are specifically excluded for food stamp purposes by any other federal statute as specified in Section 63-507.

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(m) Earned Income Tax Credits (EITC) payments shall be excluded as follows:

(1) A federal EITC payment received either as a lump sum or as payments under Section 3507 of the Internal Revenue Code for the month of receipt and the following month for the individual and that individual's spouse.

(2) Section 63-501.3(m)(2)(MR) shall become inoperative and Section 63-501.3(m)(2)(QR) shall become operative in a county on the date QR/PB becomes effective in that county, pursuant to the Director's QR/PB Declaration.

(MR) Any federal, state or local EITC payment received by any household member shall be excluded for 12 months, provided the household was participating in the Food Stamp Program at the time of receipt of the earned income tax credit and provided the household participates continuously during that 12-month period. Continuous participation includes breaks in participation of one month or less due to administrative reasons, such as delayed recertifications or missing or late CA 7s.

(QR) Any federal, state or local EITC payment received by any household member shall be excluded for 12 months, provided the household was participating in the Food Stamp Program at the time of receipt of the earned income tax credit and provided the household participates continuously during that 12-month period. Continuous participation includes breaks in participation of one month or less due to administrative reasons, such as delayed recertifications or missing or late QR 7s.

(3) The following provisions apply to both Sections 63-501.3(l)(1) and (2).

(A) If the pay stub does not indicate an EITC advance payment was received, no further action is required.

(B) If it is unclear from the pay stub what amount of EITC advance payment the recipient received, the CWD shall obtain clarification from the recipient and contact the employer if necessary to obtain the amount.

(n) At the time of application, any resources of a woman or women with children who are temporarily residing in a shelter for battered women and children shall be considered inaccessible if;

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(1) the resources are jointly owned by the resident and member(s) of the former household from which the resident fled, and

(2) the resident's access to such resources requires the consent of both the resident and the member(s) of the former household.

(o) Non-liquid asset(s) against which a lien has been placed as a result of taking out a business loan and the household is prohibited by the security or lien agreement with the lien holder (creditor) from selling the asset(s).

(p) Resources of any household member receiving PA. If a resource is jointly held by a Food Stamp household member who is receiving PA and a Food Stamp household member who is not receiving PA, then exclude the amount that was counted in determining the PA eligibility.

(q) Property, real or personal, to the extent that it is directly related to the maintenance or use of a vehicle excluded under Sections 63-501.521(a), (b) or (f). Only that portion of real property determined necessary for maintenance or use is excludable under this provision.

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(1) For example, a household which owns a produce truck to earn its livelihood may be prohibited from parking the truck in a residential area. The household may own a 100-acre field and use a quarteracre of the field to park and/or service the truck. Only the value of the quarteracre would be excludable under this provision, not the entire 100-acre field.

HANDBOOK ENDS HERE

(r) Restricted accounts as defined in the Eligibility and Assistance Standards Manual at MPP Section 89-130.

.4 Handling of Excluded Funds

.41 Excluded funds that are kept in a separate account, and that are not commingled in an account with nonexcluded funds, shall retain their resource exclusion for an unlimited period of time.

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.42 Resources of students and self-employed household members which are excluded in accordance with Section 63-501.3(i) and are commingled in an account with nonexcluded funds, shall retain their exclusion only for the period of time over which they have been prorated as income.

.43 All other funds excluded as resources which are commingled in an account with nonexcluded funds shall retain their exemption only for six months from the date they are commingled. After six months from the date of commingling, all funds in the commingled account shall be counted as a resource.

.5 Resource Values

The value of nonexcluded resources shall be their equity value. The equity value is the fair market value less encumbrances.

.51 Renumbered to MPP Section 42-215.41 by Manual Letter Nos. FS-04-01 and EAS-04-01, effective 1/1/04.

.511 Renumbered to MPP Section 42-215.411 by Manual Letter Nos. FS-04-01 and EAS0401, effective 1/1/04.

.512 Renumbered to MPP Section 42-215.412 by Manual Letter Nos. FS-04-01 and EAS0401, effective 1/1/04.

.513 Renumbered to MPP Section 42-215.413 by Manual Letter Nos. FS-04-01 and EAS0401, effective 1/1/04.

HANDBOOK BEGINS HERE

.514 Deleted by Manual Letter No. FS-04-01, effective 1/1/04.

HANDBOOK ENDS HERE

.52 Renumbered to MPP Section 42-215.43 by Manual Letter Nos. FS-04-01 and EAS-04-01, effective 1/1/04.

.521 Renumbered to MPP Section 42-215.431 by Manual Letter Nos. FS-04-01 and EAS0401, effective 1/1/04.

.522 Renumbered to MPP Section 42-215.44 by Manual Letter Nos. FS-04-01 and EAS0401, effective 1/1/04.

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.523 Renumbered to MPP Section 42-215.45 by Manual Letter Nos. FS-04-01 and EAS0401, effective 1/1/04.

.524 Renumbered to MPP Section 42-215.46 by Manual Letter Nos. FS-04-01 and EAS0401, effective 1/1/04.

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(a) Renumbered to MPP Section 42-215.461 by Manual Letter Nos. FS04-01 and EAS-04-01, effective 1/1/04.

HANDBOOK ENDS HERE

.525 Repealed by Manual Letter No. FS-04-01, effective 1/1/04.

.53 Renumbered to Section 42-215.42 by Manual Letter No. FS-04-01, effective 1/1/04.

.6 Transfer of Resources

.61 At the time of application, households shall be asked to provide information regarding any resources which any household member or ineligible alien or disqualified person whose resources are considered available to the household has transferred within the three-month period immediately preceding the date of application. Households which have transferred resources knowingly for the purpose of qualifying or attempting to qualify for food stamp benefits shall be disqualified from participation in the program for up to one year from the date of the discovery of the transfer. This disqualification period shall be applied if the resources are transferred knowingly in the three-month period prior to application or if they are transferred knowingly after the household is determined eligible for benefits.

.62 Eligibility for the program shall not be affected by the following transfers:

.621 Resources which would not otherwise affect eligibility, for example, resources consisting of excluded personal property such as furniture or of money that, when added to other nonexempt household resources, totaled less at the time of the transfer than the allowable resource limits;

.622 Resources which are sold or traded at, or near, fair market value;

.623 Resources which are transferred between members of the same household; including ineligible aliens or disqualified persons whose resources are considered available to the household;

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.624 Resources which are transferred for reasons other than qualifying or attempting to qualify for food stamp benefits, for example, a parent placing funds into an educational trust fund described in Section 63-501.3(h).

.63 Notice Requirements

.631 In the event the CWD establishes that an applicant household knowingly transferred resources for the purpose of qualifying or attempting to qualify for Food Stamp benefits, the household shall be sent a notice of action denying the application and explaining the reason for the length of the disqualification. The period of disqualification shall begin in the month of application.

.632 If the household is participating at the time of the discovery of the transfer, a notice of action explaining the reason for and length of the disqualification shall be sent. The period of disqualification shall be made effective with the first allotment to be issued after the period for timely notice has expired, unless the household has requested a state hearing and continued benefits.

.64 The length of the disqualification period shall be based on the amount by which nonexempt transferred resources, when added to other countable resources, exceeds the allowable resource limits.

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.641 For example, if a one-person household with $1,250 in the bank, transferred ownership of a car worth $5,500, $1,000 of that transfer would be considered because the first $4,500 of the car's value is exempt. When that $1,000 is added to the $1,250 in the bank and applied toward the $2,000 resource limit, $250 is left as excess resources and used to determine the period of disqualification.

HANDBOOK ENDS HERE

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.642 The following chart shall be used to determine the period of disqualification.

Amount in Excess of the Period of

Resource Limit Disqualification

$0 to 249.99 1 month

$250 to 999.99 3 months

$1,000 to 2,999.99 6 months

$3,000 to 4,999.99 9 months

$5,000 or more 12 months

.65 A transfer of assets to qualify for the Program shall not be treated as a fraudulent action in and of itself. However, concealment and misrepresentation of the assets transfer shall constitute fraud and shall be subject to the intentional Program violation provisions of Section 63-805.

.7 Resources of Nonhousehold Members

The resources of nonhousehold members, as defined in Section 63-402.21, shall be handled in accordance with Section 63-503.45.

.8 Resources of Excluded Household Members

The resources of excluded household members, as defined in Sections 63-402.221, .222, .223, and .224, shall be handled in accordance with Section 63-503.44. The income and resources of excluded household members, as defined in Sections 63-402.225, .226, and .227, shall be handled in accordance with Section 63-503.45.

NOTE: Authority cited: Sections 10553, 10554, 11209, 11265.1, .2, and .3, 18904, and 18910, Welfare and Institutions Code. Reference: Sections 10554, 11265.1, .2, and .3, 18901, 18901.9, 18904, and 18910, Welfare and Institutions Code; 7 Code of Federal Regulations (CFR) 272.8(e)(17); 7 CFR 273.2(j)(4); 7 CFR 273.8; 7 CFR 273.8(e)(11), (12)(ii), and (18); 7 CFR 273.8(f) and (h); Federal Register Volume 68, No. 168, Page 51933 published on August 29, 2003; Public Law (P.L.) 100-50, Sections 22(e)(4) and 14(27), enacted June 3, 1987; P.L. 101-201; P.L. 101-426, Section 6(h)(2), as specified in United States Department of Agriculture (U.S.D.A.), Food and Nutrition Service (FNS), Administrative Notice (AN) 91-37; P.L. 101-508, Section 11111(b); P.L. 101-624, Section 1715; P.L. 102-237, Section 905, as specified in Federal Administrative Notice 92-12, dated January 9, 1992; Section 2466d., Title 20, United States Code (U.S.C.); 7 U.S.C. 2014(d) and (g)(6)(A)(i); 26 U.S.C. 32(j)(5); 42 U.S.C.A. 5122 as amended by P.L. 100-707, Section 105(i); U.S.D.A., FNS, ANs 91-30 and 94-39; Index Policy Memo 90-22, dated July 12, 1990; U.S.D.A., FNS, AN 94-58, dated July 5, 1994; P.L. 104-193, Sections 810 and 827 (Personal Responsibility and Work Opportunity Reconciliation Act of 1996); Food and Nutrition Service Quarterly Reporting/Prospective Budgeting waiver approval dated April 1, 2003; and the Farm Security and Rural Investment Act of 2002 (P.L. 107-171).

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