602-2 B. EXEMPT RESOURCES
The following items are not included when determining the value of a household's countable resources.
The home occupied by the household and the surrounding property that is not separated from the home by intervening property owned by others. Public rights of way, such as roads that 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 being uninhabitable due to 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, will have the value of the lot and, if partially completed, the home excluded. Only one lot is excluded under this provision.
Personal effects (clothing, jewelry, etc.), and household goods (furniture, appliances, etc.) are exempt. Utility trailers, vehicle shells/toppers, detached engines and outboard motors are considered personal effects and are exempt.
3. Burial Plots/Life Insurance
One burial plot per household member is exempt. The cash value of life insurance policies is exempt.
Retirement funds are annuities or work-related plans for providing income when employment ends. They include such items as pension, disability, or deferred compensation plans administered by an employer or union. They also include funds held in individual retirement accounts (IRA) and plans for self-employed persons, sometimes call Keogh plans.
Retirement funds fall into two general categories:
Retirement Savings Accounts, which are owned and can be accessed by the individual; and
Pension Plans, which are established by an employer.
Retirement Savings Accounts
Retirement savings accounts are individually owned, and money may be deposited and withdrawn at will. These funds are exempt as long as they remain in the account, regardless of an individual's employment status or the availability of the funds. These accounts include:
Individual Retirement Accounts (IRAs);
Keogh plans;
Simplified Employer Pension Plans (SEPs), which are considered IRAs by banks and the IRS ;
Any funds in a plan, contract, or account, described in sections 401(a), 403(a), 408, and 408A of the Internal Revenue Code of 1986.
Pension Plans
Pension plans (including PERS and SBS ) that are established by an employer are exempt regardless of an individual's employment status. These types of plans include:
457 plans (plans for state and local governments and other tax-exempt organizations);
401(k) plans (generally a cash-or-deferred arrangement and generally limited to profit-making firms);
Federal Employee Thrift Savings plan;
Section 403(b) plans (tax-sheltered annuities provided for employees of tax-exempt organizations and state and local educational organizations); and
Section 501(c)(18) plans (retirement plans for union members consisting of employee contributions to certain trusts that were established before June 1959).
Deferred Compensation Plans
Deferred compensation plans are evaluated based on whether the individual can access the funds while still employed with the employer that established the account.
If the individual can access the funds while still employed, the deferred compensation plan is considered available and countable.
For other deferred compensation plans, such as the one offered by the State of Alaska, the individual may not withdraw the funds while still employed. Such plans are treated as pension plans.
If an individual is no longer working for the employer who established the deferred compensation plan, it is an available, countable resource.
Value of Retirement Funds
The value of any retirement fund is the account balance minus any expected penalties or fees for withdrawal.
Livestock that are pets or are used to produce income is exempt.
Property producing income consistent with its fair market value is exempt even if used on a seasonal basis. This means that the property (e.g. land, rental housing, fishing boat) would be producing income consistent with the income produced by similar property in the area.
Income producing property will also be excluded when there are circumstances beyond the household's control why the property has not produced income for a period of time and the household anticipates the property will produce income in the future. Document the reasons the property is excluded.
Assets essential to self-support (tools of a tradesman, machinery, livestock, farmland, commercial fishing boat, commercial fishing permit) are exempt. Property essential to a fishing or farming self-employment operation will continue to be excluded for one year from the date the self-employed fisher person or farmer ends his fishing/farming business.
The cash value of resources not accessible to the household is exempt, such as, but not limited to:
Property against
which a lien that prohibits the sale of the property has been placed
to provide collateral for a business loan;
Property in
probate;
Security deposits
on rental property;
Irrevocable
trust funds. Any funds in a trust or transferred to a trust,
and the income produced by that trust, is considered inaccessible
to the household to the extent it is not available to the household
if:
The
trustee administering the funds is either a court, or an institution,
corporation, or organization which is not under the direction
or ownership of any household member; or
an individual appointed by the court who has court imposed
limitations placed on his/her use of the funds; and
The
trust investments do not directly involve or assist any business
or corporation under the control or influence of a household
member; and
The
trust arrangement will not likely cease during the certification
period; and
No
household member has the power to revoke the trust arrangement
or change the name of the beneficiary during the certification
period; and
The funds held in irrevocable trust are established from either:
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
Non-household funds by a non-household member.
Medicaid Qualifying Income Trusts (MQIT) approved by the State of Alaska Division of Public Assistance are exempt resources for food stamp purposes. Since money deposited into a MQIT is considered income when received (i.e., prior to it being deposited into the trust account), money withdrawn from the MQIT is not counted as income.
Money withdrawn or dividends payable from trusts that are not Medicaid Qualifying Income Trusts count as income when the funds are received.
A Limited Entry Fishing Permit that Commercial Fisheries Entry Commission (CFEC) has classified as non-transferable has no value. These permits are valid for the permit holder’s lifetime, as long as they are renewed each year, but they cannot be transferred or sold.
A dedicated account is an account set
up with past due SSI payments made
on or after August 23, 1996 for SSI
recipients under the age of 18. Funds in a dedicated account are not
available to meet the daily basic needs of the recipient. Use
of the funds in the account is restricted to treatment, equipment,
and accommodations related to the child’s disability. Funds
in a dedicated account are not a countable resource. (For more
information on dedicated accounts please see APA
MS 432-4 A)
Verification that a resource is inaccessible is not required unless the information provided by the household is questionable.
Reimbursements from the Uniform Relocation Assistance and Real Properties Acquisition Act of 1970 are exempt.
10. Government Disaster Relief
Governmental payments by HUD or the Small Business Administration designated for the restoration of a home damaged in a disaster are exempt. This exemption only applies to households subject to legal sanctions if funds are not used as intended.
Certain Native Americans may hold land either individually within a rural area or community, or jointly with their tribe or others in their community. These lands are an exempt resource if they can be classified as Native Restricted Deeds, meaning they cannot be sold, transferred, or otherwise disposed of without permission from other individuals, the land-holder’s tribe, or the Bureau of Indian Affairs. Any house or other structure that is permanently attached to restricted deed land is also exempt, even if it is not used as a home.
Note:
Verification of Native Restricted Deed status is required. In Alaska,
the Bureau of Indian Affairs is the agency that keeps records of Native
Restricted Deeds. Verification may also be available from deeds,
tax assessor's records, recorder's office, realtors or real estate agents,
mortgage or escrow documents, or signed surveyors records or reports.
12. Alaska Native Claims Settlement Act (ANCSA) Assets
The following items are excluded as resources:
a. Alaska Native Fund Distributions
Distributions from the original Alaska Native Fund are excluded from resources regardless of the amount distributed.
b. Stock
Any stock issued or distributed by an ANCSA corporation (including stock issued as a dividend or distribution on stock) is excluded from resources.
c. Partnership Interests
A partnership interest received from an ANCSA corporation is excluded from resources. However, income received as a result of a partnership interest is treated as a cash distribution. See (f) below.
d. Land
Any land or any interest in land received from an ANCSA corporation (including any land or any interest in land received as a dividend or distribution on stock) is excluded from resources. This includes any land or interest in land inherited by a descendant. Any house or other structure that is permanently attached to the land is also excluded, even if it is not used as a home.
e. Interest in a Settlement Trust
Any interest in a settlement trust received from an ANCSA corporation is excluded from resources.
f. Cash Distributions
Any cash distributions (including cash dividends on stock) received from ANCSA corporations are excluded from resources. For the purpose of this exclusion, cash distributions from ANCSA corporations are distributions that are made to a class of individuals, such as all shareholders, or all elders. Cash distributions do not include cash payments that are made to individuals or households for a specific purpose such as wages, a door prize, or a general assistance payment from the corporation.
This exclusion does not apply to any funds received as a result of the investment or deposit of an individual's ANCSA payments after they are distributed to the shareholders.
If the household uses a cash distribution to buy items like a boat, vehicle, or real property, these items must be examined to determine if they are exempt for reasons identified elsewhere in this section. If the item is not exempt, it must be counted when determining the household's total available resources. Exempt ANCSA cash distributions that are kept in a separate account containing only exempt monies retain their resource exemption indefinitely.
Real property that the household is making a good faith effort to sell at a reasonable price is exempt. Real property is land and permanent attachments to land such as minerals and timber, also structures and improvements erected on and affixed to the land such as houses, barns, garages, etc. Personal property, such as vehicles and fishing permits, cannot be excluded under this provision.
Examples of acceptable forms of listings are websites, newspaper ads, bulletin board posting's, realtor listings, etc. With technology changing at a rapid pace, and will be constantly throughout the years, internet sites such as Craigslist, Sell.com, and other ad listing websites are acceptable forms of good faith efforts to sell. The caseworker will need to use PPJ in researching ads on internet sites and checking how actively the client is pursuing the sale of the property at application and recertification. It is also recommended that a hard copy of the ad be printed out and kept in the case file.
Installment contracts for the sale of land or buildings are exempt, provided the contract produces income consistent with its fair market value. The income produced by these contracts is countable unearned income in the month received.
15. WIC - Special Supplemental Food Program for Women, Infants and Children
Benefits from WIC , a special supplemental food program, are exempt.
16. Grand River Band of Ottawa Indian Income
Income from the disposition of funds to the Grand River Band of Ottawa Indians is exempt.
17. Prorated Income for Students or Self-employment
Resources of students or self-employed persons counted as income and prorated over the period of intended use are exempt.
18. Federal/State Heating Assistance Payments
Any federal or state heating assistance payments are exempt.
19. HUD Retroactive Tax and Utility Payments
HUD retroactive tax and utility cost subsidy payments for the month in which payment was received and for the following month are exempt. After the above period, any remaining portion of the payment will be treated as a resource.
Most vehicles are exempt as addressed at MS 602-2C.
21. Property for Vehicle Maintenance and Use
Property, real or personal, is exempt provided it is directly related to the maintenance or use of a vehicle excluded as a resource because it is used primarily for income producing purposes. Only that portion of real property determined necessary for maintenance or use is excludable. For example, a household owns a produce truck and that truck cannot be parked in a residential area. The household owns a one-acre field and uses a quarter acre to park/service the truck. The value of the quarter acre would be excludable.
22. World War II Restitution Funds
Any funds retained from restitution payments made by the U.S. Government to individual Japanese-Americans and to Aleuts (or, if deceased, payments made to their survivors) who were interned or relocated during World War II are excluded from resources under Public Law 100-383. Restitution payments paid to individual Japanese-Canadians who were interned or relocated during World War II by the Canadian Government are also excluded from resources.
This exclusion also applies to any funds received as a result of the investment or deposit of a restitution payment to eligible Aleuts.
However, any payments subsequently received and retained from a trust established by the Secretary of the Interior appropriated for Aleut residents are counted as a resource. The trustees may use the principal, accrued interest and other earnings for the benefit of the elderly, disabled, seriously ill, students in need of scholarships, the preservation of Aleut cultural heritage and historical records, the improvement of community centers in affected Aleut villages and other purposes to improve conditions of Aleut life.
23. Agent Orange Settlement Payments
Any funds retained from Agent Orange settlement payments are excluded from resources under Public Law 101-201 and 101-239. Distribution of Agent Orange settlement payments began in March 1989 and ended in 1994. Qualifying veterans received at least one payment a year for the life of the program. Qualifying survivors of deceased veterans received a single lump sum payment.
Any funds received as a result of the investment or deposit of Agent Orange settlement payments are not excluded from resources. See MS 602-3B(2).
24. Resources Held by TANF , SSI , and APA Recipients
Resources held by recipients of Temporary Assistance to Needy Families (TANF), including the Alaska Temporary Assistance Program (ATAP) and the Native Family Assistance Program are exempt. Resources held by recipients of Supplemental Security Income (SSI) are exempt. Resources held by recipients of the State of Alaska Adult Public Assistance Program, including Aid to the Disabled, Aid to the Blind, and Old Age Assistance, but not including recipients of Interim Assistance benefits are exempt.
25. Resources Excluded by Federal Law
Resources excluded by federal law. A partial listing of these resources is at Addendum 5 to this manual.
26. Earned Income Tax Credits (EITC)
Retained federal earned income tax credit payments are excluded for the month of receipt and the following month. Retained earned income tax credit payments from any source (federal, state, local) are excluded up to one year from the date of receipt if the payments were received at the time the person also received food stamps. This resource exclusion is allowed up to 12 months, provided the person continues to receive food stamps. Refer to MS 602-2A(4) for procedures to follow when excluded funds are commingled with countable resources.
27. Resources that Cannot be Sold for a Significant Return
Non-liquid resources with an equity value of $1500 or less are exempt. This policy shall not apply to liquid resources such as stocks, bonds or negotiable financial instruments.
28. Energy Employees Occupational Illness Compensation Payments
The Energy Employees Occupational Illness Compensation Act provides compensation to individuals who develop illnesses as a result of employment at certain federally owned facilities in which radioactive materials were used. These payments, if retained, are exempt resources.
29. Victims of Crimes Compensation Payments
Monies retained from payments received from a fund established by a State to aid victims of crimes are exempt as a resource.
Funds held in 529 College Savings Plans are exempt as long as they remain in the account, regardless of an individual's student status or the availability of the funds.
Federal income tax returns received after December 31, 2009 are exempt as a resource for 12 months from receipt. Exclude the Federal tax return from assets by subtracting any tax return received by the household in the last 12 months from the household’s liquid resources.
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