Disposal of resources for less than fair market value

(A) (i) If an individual or the spouse of an individual disposes of resources for less than fair market value on or after the look-back date described in clause (ii)(I), the individual is ineligible for benefits under this subchapter for months during the period beginning on the date described in clause (iii) and equal to the number of months calculated as provided in clause (iv). (ii) (I) The look-back date described in this subclause is a date that is 36 months before the date described in subclause (II). (II) The date described in this subclause is the date on which the individual applies for benefits under this subchapter or, if later, the date on which the individual (or the spouse of the individual) disposes of resources for less than fair market value. (iii) The date described in this clause is the first day of the first month in or after which resources were disposed of for less than fair market value and which does not occur in any other period of ineligibility under this paragraph. (iv) The number of months calculated under this clause shall be equal to— (I) the total, cumulative uncompensated value of all resources so disposed of by the individual (or the spouse of the individual) on or after the look-back date described in clause (ii)(I); divided by (II) the amount of the maximum monthly benefit payable under section 1382(b) of this title , plus the amount (if any) of the maximum State supplementary payment corresponding to the State’s payment level applicable to the individual’s living arrangement and eligibility category that would otherwise be payable to the individual by the Commissioner pursuant to an agreement under section 1382e(a) of this title or section 212(b) of Public Law 93–66 , for the month in which occurs the date described in clause (ii)(II), rounded, in the case of any fraction, to the nearest whole number, but shall not in any case exceed 36 months.

(B) (i) Notwithstanding subparagraph (A), this subsection shall not apply to a transfer of a resource to a trust if the portion of the trust attributable to the resource is considered a resource available to the individual pursuant to subsection (e)(3) (or would be so considered but for the application of subsection (e)(4)). (ii) In the case of a trust established by an individual or an individual’s spouse (within the meaning of subsection (e)), if from such portion of the trust, if any, that is considered a resource available to the individual pursuant to subsection (e)(3) (or would be so considered but for the application of subsection (e)(4)) or the residue of the portion on the termination of the trust— (I) there is made a payment other than to or for the benefit of the individual; or (II) no payment could under any circumstance be made to the individual, then, for purposes of this subsection, the payment described in clause (I) or the foreclosure of payment described in clause (II) shall be considered a transfer of resources by the individual or the individual’s spouse as of the date of the payment or foreclosure, as the case may be.

(C) An individual shall not be ineligible for benefits under this subchapter by reason of the application of this paragraph to a disposal of resources by the individual or the spouse of the individual, to the extent that— (i) the resources are a home and title to the home was transferred to— (I) the spouse of the transferor; (II) a child of the transferor who has not attained 21 years of age, or is blind or disabled; (III) a sibling of the transferor who has an equity interest in such home and who was residing in the transferor’s home for a period of at least 1 year immediately before the date the transferor becomes an institutionalized individual; or (IV) a son or daughter of the transferor (other than a child described in subclause (II)) who was residing in the transferor’s home for a period of at least 2 years immediately before the date the transferor becomes an institutionalized individual, and who provided care to the transferor which permitted the transferor to reside at home rather than in such an institution or facility; (ii) the resources— (I) were transferred to the transferor’s spouse or to another for the sole benefit of the transferor’s spouse; (II) were transferred from the transferor’s spouse to another for the sole benefit of the transferor’s spouse; (III) were transferred to, or to a trust (including a trust described in section 1396p(d)(4) of this title ) established solely for the benefit of, the transferor’s child who is blind or disabled; or (IV) were transferred to a trust (including a trust described in section 1396p(d)(4) of this title ) established solely for the benefit of an individual who has not attained 65 years of age and who is disabled; (iii) a satisfactory showing is made to the Commissioner of Social Security (in accordance with regulations promulgated by the Commissioner) that— (I) the individual who disposed of the resources intended to dispose of the resources either at fair market value, or for other valuable consideration; (II) the resources were transferred exclusively for a purpose other than to qualify for benefits under this subchapter; or (III) all resources transferred for less than fair market value have been returned to the transferor; or (iv) the Commissioner determines, under procedures established by the Commissioner, that the denial of eligibility would work an undue hardship as determined on the basis of criteria established by the Commissioner.

(D) For purposes of this subsection, in the case of a resource held by an individual in common with another person or persons in a joint tenancy, tenancy in common, or similar arrangement, the resource (or the affected portion of such resource) shall be considered to be disposed of by the individual when any action is taken, either by the individual or by any other person, that reduces or eliminates the individual’s ownership or control of such resource.

(E) In the case of a transfer by the spouse of an individual that results in a period of ineligibility for the individual under this subsection, the Commissioner shall apportion the period (or any portion of the period) among the individual and the individual’s spouse if the spouse becomes eligible for benefits under this subchapter.

(F) For purposes of this paragraph— (i) the term “benefits under this subchapter” includes payments of the type described in section 1382e(a) of this title and of the type described in section 212(b) of Public Law 93–66 ; (ii) the term “institutionalized individual” has the meaning given such term in section 1396p(e)(3) 2 2 See References in Text note below. of this title; and (iii) the term “trust” has the meaning given such term in subsection (e)(6)(A) of this section.