Page 120

DEPARTMENT FOR AGING AND REHABILITATIVE SERVICES AUXILIARY GRANT PROGRAM NON-SSI RESOURCE ELIGIBILITY 11/18 CHAPTER E PAGE 109 receives the benefits. The exclusion begins with the month after the individual receives the payment. Retained funds must be identifiable in order to be excluded. See Commingled Funds Chapter E - 26 if funds excluded under this provision are commingled with other funds. 58.1.1. Written Notice The individual must be given a written notice of this exclusion and its limited duration. 58.2. Verification Absent evidence to the contrary, accept the individual's allegation as to when he/she received a retroactive SSI or RSDI payment. Obtain evidence of the amount of retroactive payment, such as a copy of a notice to the recipient, a systems record of the payment (e.g., payment history through SVES), etc.

59. Reverse Mortgage A reverse mortgage is a loan against the equity in a home that provides tax-free cash advances, but requires no payments during the term of the loan. Since there are no monthly payments during the life of the loan, the balance grows larger and the equity value in the home gets smaller. The mortgage contract itself is not a resource to the borrower. The payments the individual receives from the reverse mortgage are proceeds from a bona fide loan. The proceeds are neither income nor a resource in the month received. If the funds are retained beyond the month of receipt, they are a countable resource. Example: Eleanor Jones, an eligible individual who owns her home, enters into a mortgage contract with a local bank. Under this contract, the bank provides her with monthly payments which do not have to be repaid as long as she lives in the home. These payments are actually a loan against her equity in the home and must be repaid when she dies, sells the home, or moves. Analysis: Since Ms. Jones is the borrower, the mortgage contract itself is not a resource to her. Since she intends to return to the home, it continues to be excluded from resource counting. The payments she receives from the reverse mortgage are loan proceeds so they are not counted as income.