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Resource ownership and availability
Purpose: To explain how to determine what is a resource, who owns it, and whether it is available.
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Worker Responsibilities
- To calculate the value of a resource, subtract the amount the client stills owes on it from the fair market value (how much the individual could reasonably sell the resource for). The amount that remains is the value of the resource at the current time.
- If a client continues making a reasonable effort to convert a resource to cash, the resource is not counted. The worker should verify that the individual continues to make efforts to convert/sell the resource periodically, and at again at time of recertification.
- For resources subject to a legal barrier, if the legal barrier can be overcome, require the client to take reasonable steps to do so unless client does not have the necessary funds to retain an attorney, the cost of legal action would be more than the individual would gain, or the legal action is not likely to succeed.
- Exempt the property permanently if the individual cannot overcome the barrier.
- Treat the property as unavailable and exclude it for the period of time the individual attempts to make a resource available. Review the status at each recertification/eligibility review.
- If the individual overcomes the barrier, count the property to determine the individual's eligibility unless the individual makes a bona fide effort to dispose of the property as described in (7) below.
- When the value of a child’s irrevocable educational trust fund is over $4000, determine the reason it is over the limit:
- Disregard the amount over the limit that is due to interest, as long as it remains in the trust.
- If the trust exceeds the limit for reasons other than interest, establish a period of ineligibility.
Example: A child deposits the following amounts into an irrevocable educational trust:
- June $800
- July $1,600
- August $1,600
As of 8/31/02, there is $4,000 in the irrevocable educational trust. The trust earns $16 in interest in the month of September, bringing the balance of the trust to $4,016. The funds in this trust are treated as follows:
- Original $4,000: Unavailable resource.
- $16 interest earned from the original $4,000: Unavailable as long as it remains held in trust.
Example
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- The child in the example above deposits an additional $1,600 of her earnings into her irrevocable educational trust, bringing the balance to $5,616. The funds in the account are treated as follows:
- Original $4,000: Unavailable resource.
- $16 interest earned from the original $4,000: Unavailable as long as it remains held in trust
- Additional $1,600 deposit: Unavailable resource, unallowable transfer of property. Impose a period of ineligibility based on this dollar amount.
- If the individual or child receives disbursements from the trust:
- Exclude any disbursements that are spent for educational expenses such as tuition, books, school supplies, and clothes for school.
- If the disbursements are not used for educational expenses:
- Treat the disbursements as a resource if the child or the child’s guardian owned or controlled the money before it was placed in the trust. If the amount of these disbursements causes the individual’s resource to exceed the allowable limit, establish a period of ineligibility.
- Treat the disbursements as unearned income if the child or the child’s guardian did not own or control the money before it was placed in the trust.
Example: The trustee of a child’s irrevocable educational trust disburses $200 from the trust to the child to pay tuition for summer school. The money in the trust is from the child’s earnings. The $200 disbursement is excluded as both income and a resource.
Example: The trustee of a child’s irrevocable educational trust disburses $200 from the trust to the child to buy a dog. The money in the trust was received as part of an insurance settlement and was deposited directly into the account from the insurance company, pursuant to a court order. The $200 is considered unearned income. - The child in the example above deposits an additional $1,600 of her earnings into her irrevocable educational trust, bringing the balance to $5,616. The funds in the account are treated as follows: