Current through Register Vol. 43, No. 12, March 20, 2024
(a)
Definitions. For purposes of this regulation, each of the following terms shall
have the meaning specified in this regulation:
(1) "Cash assets" means the following
resources:
(A) Cash surrender or loan values
of life insurance policies;
(B)
investments;
(C) money;
(D) similar items from which a determinate
amount of money can be realized; and
(E) trust funds.
(2) "Other personal property" means the
following:
(A) Contracts from the sale of
property;
(B) equipment;
(C) home produce;
(D) household equipment and
furnishings;
(E)
inventory;
(F) livestock;
(G) personal effects;
(H) similar items from which a determinate
amount of money can be realized; and
(I) vehicles.
(3) "Personal property" means all property,
excluding real property.
(b) Treatment of personal property. Personal
property, unless exempted, shall be considered a resource. Each trust fund
shall be subject to subsection (c).
(c) Treatment of trust funds. For purposes of
determining an individual's eligibility for assistance or the amount of
assistance, the requirements in this subsection shall apply to trust funds. The
term "trust" shall include any legal instrument or device that is similar to a
trust, including an annuity. The term "assets" shall be defined as specified in
K.A.R. 129-6-57(a).
(1) For a revocable trust,
the value of the trust shall be considered a resource available to the
individual. Payments from the trust to or for the benefit of the individual
shall be considered to be income. All other payments made from the trust shall
be considered under the property transfer provisions of K.A.R.
129-6-57.
(2) For an irrevocable
trust established after August 10, 1993, the following requirements shall
apply:
(A) If there are any circumstances
under which payment from an irrevocable trust could be made to the individual
or for the benefit of the individual, the portion of the trust from which
payment could be made shall be considered as a resource available to the
individual. Each payment made from the trust to the individual or for the
benefit of the individual shall be considered income. All other payments made
from the trust shall be considered under the property transfer provisions of
K.A.R. 129-6-57.
(B) Each portion
of the trust from which no payment could be made to the individual under any
circumstances shall be considered under the transfer of assets provisions of
K.A.R. 129-6-57 from the date of establishment of the trust or, if later, the
date on which payment to the individual was restricted or foreclosed.
(C) An individual shall be considered to have
established a trust if any assets of the individual were used to form all or
part of the trust and if any of the following individuals established the
trust, other than by will:
(i) The individual
or the individual's spouse;
(ii)
any person, including a court or administrative body, with legal authority to
act in place of or on behalf of the individual or the individual's spouse;
or
(iii) any person, including any
court or administrative body, acting at the direction or upon the request of
the individual or the individual's spouse.
(D) If the principal of the trust includes
assets of any other person or persons, this subsection shall apply to the
portion of the trust attributable to the assets of the individual.
(E) This subsection shall apply without
regard to the purposes for which the trust was established, whether or not the
trustees have or exercise any discretion under the trust, any restrictions on
when or whether distributions can be made from the trust, or any restrictions
on the use of distributions from the trust.
(F) This subsection shall not apply to a
trust that contains the assets of an individual under the age of 65 who meets
the blindness or disability criteria of K.A.R. 129-6-85 and that is established
for the benefit of the individual by a parent, grandparent, or legal guardian
of the individual, or a court. The state shall receive all amounts remaining in
the trust upon the death of the individual, up to an amount equal to the total
medical assistance paid on behalf of the individual;
(G) This subsection shall not apply to a
trust that contains the assets of an individual who meets the blindness or
disability criteria of K.A.R. 129-6-85 if the trust meets all the following
conditions:
(i) The trust is established by a
nonprofit association.
(ii) A
separate account is maintained for each beneficiary of the trust.
(iii) Accounts in the trust are established
solely for the benefit of individuals who meet the blindness or disability
criteria of K.A.R. 129-6-85.
(iv)
Each account in the trust is established by that individual; the parent,
grandparent, or legal guardian of the individual; or a court. The state shall
receive all amounts remaining in the individual's account upon the death of the
individual, up to an amount equal to the total medical assistance paid on
behalf of the individual.
Establishment of a trust under paragraph (c)(2)(G) for an
individual who is at least 65 shall be subject to the transfer of assets
provisions of K.A.R. 129-6-57.
(H) The requirements of K.A.R.
129-6-109(c)(2) shall be waived if the secretary determines that a waiver is
necessary to avoid undue hardship on the individual. A finding of undue
hardship may be granted if the individual verifies that all of the following
conditions have been met:
(i) The individual
has exhausted all legal remedies for gaining access to the principal or income
of the trust.
(ii) All otherwise
available assets have been expended to meet living and medical
expenses.
(iii) The individual's
health or life would be endangered if the individual were deprived of medical
care.
(3) For
an irrevocable trust established with the individual's own assets on or before
August 10, 1993, the following provisions shall apply:
(A) The trust shall be considered available
up to the maximum value of the funds that can be made available under the terms
of the trust on behalf of the individual if both of the following conditions
are met:
(i) The individual is a
beneficiary.
(ii) The trustees are
permitted to exercise any discretion with respect to distribution to the
individual.
(B) The
trust may be established by the individual, the individual's spouse or parent,
a legal guardian, or a legal representative who is acting on behalf of the
individual.
(C) The amount from the
trust that shall be considered as an available resource is the amount that
could have been distributed but was not distributed within an eligibility base
period. Each amount actually distributed shall be regarded as income. Each
portion of the trust that is unavailable to the individual or is not used for
the benefit of the individual shall be considered a transfer of property for
less than fair market value in accordance with K.A.R. 129-6-57.
(D) K.A.R. 129-6-109(c)(3) shall not be
applicable to any trust established before April 7, 1986 if the individual is a
developmentally disabled individual who is residing in an intermediate care
facility for people with intellectual disability and the trust is solely for
the benefit of the individual.
(4) For any other trust, including a trust
established with assets of someone other than the individual, the trust shall
be considered available to the individual only if the individual has the
ability to revoke or terminate the trust or to direct the use of the trust
assets for the individual's own support and maintenance. Mandatory periodic
payments received from a trust by the individual shall be considered an
available resource equal to the present value of the anticipated payments,
unless there is a valid spendthrift clause or other language in the trust that
specifically prohibits anticipation of payments. If a valid spendthrift clause
or other restrictive language exists, the periodic payments shall be considered
countable unearned income.
(d) Treatment of annuities. The term
"annuity" shall include any contract or device that conveys a right to receive
a fixed, periodic source of income for a specified period of time. For purposes
of determining an individual's eligibility for assistance or the amount of
assistance, the following requirements shall apply:
(1) Each individual requesting medical
assistance shall disclose any interest in an annuity. Failure to meet this
requirement shall result in ineligibility for medical assistance due to
noncooperation in accordance with K.A.R. 129-6-56.
(2) Retirement annuities, including civil
service and railroad retirement annuities, shall be exempt as a resource, but
the income received shall be countable unearned income.
(3) All other revocable and irrevocable
annuities, including those reported to be nonassignable, shall be presumed to
be an available resource. The right to either the principal or the income
stream from an annuity shall be considered a countable resource. If the annuity
can be sold, assigned, encumbered, or structured so that the benefit of the
annuity can be received by someone other than the designated beneficiary, the
annuity shall be considered available and shall be assigned a value.
(4) The fair market value of a revocable
annuity shall be the cash value of the annuity. The fair market value of an
irrevocable annuity shall be the amount yet to be paid out under the terms of
the contract.
(5) If the individual
can furnish evidence from a reliable source that the annuity or the income
stream from the annuity is not able to be received by someone other than the
designated beneficiary, the annuity shall be reevaluated. Reliable sources
concerning the availability of the annuity or income stream shall include banks
and other financial institutions, insurance companies, and brokers.
(e) Exempted personal property.
The resource value of the following types of personal property shall be exempt:
(1) Personal effects;
(2) household equipment and furnishings in
use or only temporarily not in use;
(3) tools in use and necessary for the
maintenance of a house or a garden;
(4) the stock and inventory of any
self-employed person that are reasonable and necessary in the production of
goods and services;
(5) items for
home consumption, which shall consist of the following:
(A) Produce from a garden consumed from day
to day and any excess that can be canned or stored; and
(B) a small flock of fowl or herd of
livestock that is used to meet the food requirements of the family;
(6) cash assets that are traceable
to income exempted as income and as a cash asset;
(7) any contract for the sale of property, if
the proceeds from the contract are considered as income and the income is
consistent with the repayment terms and conditions specified in the written
contract;
(8) one vehicle for each
family group receiving medical assistance if the primary purpose of the vehicle
is to serve the needs of that family group. If someone who is not a member of
that family group has the primary use, enjoyment, and possession of the
vehicle, the vehicle shall not be exempted under this paragraph. Additional
vehicles may be exempt if used over 50 percent of the time for employment or
self-employment, if used as the family's home, if needed for medical treatment
of a specific medical problem, or if specially equipped for use by a
handicapped person;
(9) any
individual development account (IDA) that meets the following requirements:
(A) The account shall be established by or on
behalf of a temporary assistance for needy families (TANF) recipient or by or
on behalf of an individual participating in the assets for independence
demonstration program (AFIA) and shall be used for a qualified purpose. A
qualified purpose shall mean one or more of the following: postsecondary
education expenses for college or vocational-technical school, excluding
learning quest and other 529 accounts; first home purchase, if the person has
not owned a home within three years of acquisition; or business capitalization,
if the business plan has been approved by a financial institution or nonprofit
loan fund. All funds withdrawn from an IDA and used for any purpose other than
one of those listed in this paragraph shall count as unearned income in the
month withdrawn; and
(B) the IDA
shall be a trust funded through periodic contributions by the establishing
individual and may be matched by or through a qualified entity for a qualified
purpose. A qualified entity to match IDA funds for a TANF recipient shall be
either a not-for-profit organization described in 8 U.S.C. 501(c)(3) and exempt
from taxation under 8 U.S.C. 501(a) or a state or local government agency
acting in cooperation with a 501(c)(3) organization. For AFIA participants,
matching contributions shall be made by the federal government through a
grantee;
(10) low-income
family postsecondary savings accounts incentive program established pursuant to
K.S.A. 2012 Supp.
75-650, and amendments
thereto;
(11) life insurance that
is owned by an applicant or recipient if one of the following conditions is
met:
(A) The policy has no potential cash
surrender value;
(B) the policy
does not exceed $1,500 face value. The face value shall not include and shall
not be increased by accumulated dividends, but shall be decreased by any
outstanding policy loan. If the total face value of insurance policies owned by
any one individual exceeds $1,500, the total cash surrender value of those
policies shall be a nonexempt resource; or
(C) the policy is in excess of $1,500 face
value and has been irrevocably collaterally assigned to the state. The
assignment shall be for an amount not to exceed the amount of benefits paid
under the medical assistance program for the individual;
(12) any personal property of a blind or
disabled person that is covered by an approved plan of self-support;
(13) burial spaces in accordance with the
following:
(A) "Burial spaces" shall mean
conventional grave sites, crypts, mausoleums, caskets, urns, and other
repositories that are traditionally used for the remains of deceased persons.
This term shall include vaults, headstones, and grave markers, as well as
monies set aside for opening and closing the grave; and
(B) burial spaces purchased through a
revocable or irrevocable prepaid contract shall be exempt under this paragraph,
including the account in which the funds are deposited under the contract and
the interest that accrues on the funds;
(14) burial funds of up to $1,500 each, plus
any interest that has accumulated in that fund beginning with the month of
application but no earlier than November 1, 1984, for members of the assistance
plan that are separately identifiable and clearly designated as set aside for
each member's burial expenses. "Burial funds" shall mean revocable burial
contracts and trusts as well as other revocable burial arrangements:
(A) The fund shall be considered separately
identifiable if it is set up in a separate account and not commingled with any
other funds, except funds for burial purposes including a prepaid contract fund
for burial merchandise in accordance with paragraph (e)(13);
(B) the fund shall be considered as clearly
designated if the account is noted "for burial purposes only" or if the client
provides a signed, written statement attesting to the fact that the funds have
been set aside and are intended for burial purposes only;
(C) if the fund is exempted and the client
withdraws all or a portion of the funds, the amount withdrawn shall be
considered as a nonexempt resource and, if transferred, shall be subject to the
transfer provisions of K.A.R. 129-6-57;
(D) the $1,500 amount that can be exempted
under paragraph (e)(14) shall be reduced by the amount of any irrevocable
burial agreements established under
K.S.A.
16-303 and amendments thereto, except to the
extent that the irrevocable burial agreement represents excludable burial
spaces under paragraph (e)(13), as well as the face value of all life insurance
policies that do not exceed the $1,500 face value limitation in accordance with
paragraph (e)(11). The face value of life insurance policies that exceed this
$1,500 limit shall not reduce the amount that can be exempted for burial
purposes;
(15) proceeds
from the sale of a home if the proceeds are conserved for the purchase of a new
home and the funds so conserved are expended or committed to be expended within
three months of the sale;
(16) a
retroactive social security payment received by the applicant or recipient or
an ineligible legally responsible person for the nine months following the
month of receipt;
(17) the cash
value of pension plans or funds under any of the following conditions:
(A) The person is employed and would have to
terminate employment in order to obtain any payment. Each pension plan or fund
that can be converted to periodic payments shall be exempt if the plan or fund
is converted to periodic payments by the month following the month in which the
plan or fund is eligible for conversion;
(B) the person is not retired or claiming
permanent disability; or
(C) the
applicant's or recipient's spouse or parent has funds in a work-related pension
plan or fund, including Keogh plans, and IRAs and is not applying for or
receiving medical assistance;
(18) retirement accounts and pensions of any
employed individual who meets the requirements of K.A.R. 129-6-88;
(19) income-producing personal property,
other than cash assets, that is essential for employment or self-employment or
producing income consistent with its fair market value. Income-producing
property may include any of the following items:
(A) Tools;
(B) equipment;
(C) machinery; or
(D) livestock;
(20) escrow accounts established for families
participating in the family self-sufficiency program through the U.S.
department of housing and urban development. Interest earned on the accounts
shall also be exempted as income; and
(21) monies paid as part of a contract or
agreement to receive medical or assistive services from an unlicensed
individual or entity if all of the following conditions are met:
(A) A written contract is executed before
providing or paying for any service. The contract shall specify services to be
provided and the rates for these services;
(B) the contracted amount paid for services
is consistent with the market rate for the services. If there is no established
rate, the federal minimum wage shall be used;
(C) the provider of the service is reporting
all monies as income to the appropriate state and federal governmental revenue
agencies as required by law;
(D)
any amounts due under the contract are paid after the services are
rendered;
(E) the agreement is
revocable; and
(F) upon the death
of the individual, the contract ceases.