Current through Register Vol. 35, No. 18, September 24, 2024
Before a resource can be considered countable, the three
criteria listed below must be met.
A.
Ownership interest: An applicant or recipient must have an
ownership interest in a resource for it to be countable. The fact that an
applicant or recipient has access to a resource, or has a legal right to use
it, does not make it countable unless the applicant or recipient also has an
ownership interest in it.
B.
Legal right to convert resource to cash: An applicant or recipient
must have the legal ability to spend the funds or to convert non-cash resources
into cash.
(1)
Physical possession of
resource: The fact that an applicant or recipient does not have physical
possession of a resource does not mean it is not their resource. If they have
the legal ability to spend the funds or convert the resource to cash, the
resource is considered countable. Physical possession of savings bonds is a
legal requirement for cashing them.
(2)
Unrestricted use of
resource: An applicant or recipient is considered to have free access to
the unrestricted use of a resource even if they can take those actions only
through an agent, such as a representative payee, guardian, conservator,
trustee, or another authorized representative. If there is a legal bar to the
sale of a resource, the resource is not countable. However, if a co-owner of
real property can bring an action to partition and sell the property, their
interest in the property is a countable resource.
C.
Legal ability to use a
resource: If a legal restriction exists which prevents the use of a
resource for the applicant's or recipient's own support and maintenance, the
resource is not countable.
D.
Joint ownership of resources: If an applicant or recipient owns
either liquid or non-liquid resources jointly with others, they have 30
calendar days from the date requested by the ISD worker to submit all
documentation required to verify their claims regarding ownership of, access
to, and legal ability to use the resource for personal support and maintenance.
Failure to do so results in the presumption that the resource is countable and
belongs to the applicant or recipient.
(1)
Jointly held property: If jointly held property is identified
during review of an active case, the ISD worker must:
(a) determine whether the property is a
countable resource;
(b) determine
whether the value of the jointly held property plus the value of other
countable resources exceeds the allowable resource maximum; and
(c) if the value of countable resources
exceeds the allowable maximum, advance notice is furnished to the applicant or
recipient of the intent to close their case and their right to verify claims
regarding ownership of, access to, and legal ability to use the property for
personal support and maintenance.
(i) If the
applicant or recipient fails to provide required information or respond within
the advance notice period, their case is closed.
(ii) If, after expiration of the advance
notice period but prior to the end of the month in which the advance notice
expires, the applicant or recipient provides the required evidence to show the
property is not a countable resource, or is countable in an amount which, when
added to the value of other countable resources, does not exceed the maximum
allowable limit, and eligibility continues to exist on all other factors, the
case is reinstated for the next month.
(2)
Joint bank accounts: If
liquid resources are in a joint bank account of any type, the applicant's or
recipient's ownership interest, while the parties to the account are alive, is
presumed to be proportionate to the applicant's or recipient's contributions to
the total resources on deposit.
(a) The
applicant or recipient is presumed to own a proportionate share of the funds on
deposit unless they present clear and convincing evidence that the parties to
the account intended the applicant or recipient to have a different ownership
interest.
(b) To establish the
applicant's or recipient's ownership interest in a joint account, the following
are required:
(i) statement by the applicant
or recipient regarding contributions to the account; reasons for establishing
the account; who owns the funds in the account; and any supporting
documentation; plus
(ii)
corroborating statements from the other account holder(s);
(iii) if either the applicant or recipient or
the other account holder is not capable of making a statement, the applicant or
recipient or an authorized representative must obtain a statement from a third
party who has knowledge of the circumstances surrounding the establishment of
the joint account.
(c)
Failure to provide required documentation within 30 calendar days of the date
requested by the ISD worker results in a determination that the entire account
amount belongs to the applicant or recipient.
(d) If the existence of a jointly held bank
account is identified during the review of an active case, the ISD worker
requests evidence of ownership and accessibility. If the evidence is not
furnished within 30 calendar days of the request, their case is
closed.
(3)
Life
estate: A life estate interest in the applicant's or recipient's own
home will count as a resource if the applicant or recipient has not resided on
the property continuously for at least 12 months from the date of the life
estate purchase. For a purchase of a life estate in the home of another, see
Subsection D of
8.281.500.14
NMAC.
(a) The "unisex life estate and
remainder interest tables" are used to determine the value of a life estate.
See 8.200.520 NMAC. The value is computed by multiplying the current fair
market value by the percentage reduction on the unisex table under the column
for the applicant's or recipient's age.
(b) If an applicant or recipient feels the
value calculated based on this method is overstated, they can obtain a
valuation of the life estate in the area for use as documentation of lesser
value.
E.
The home as a countable resource: If the applicant or recipient or
their authorized representative states the applicant or recipient does not
intend to return to the home and it is not the residence of applicant's or
recipient's spouse or dependent relative, the home is considered a countable
resource. If the applicant or recipient or their authorized representative puts
the home up for sale and it is not the primary residence of the applicant's or
recipient's spouse or a dependent relative, the home is considered a countable
resource. A dependent relative is a minor child or adult disabled child of the
applicant, recipient, or community spouse.
F.
Value of property: The
applicant or recipient must supply HSD with written documentation regarding the
fair market value of the property from a real estate agent, title company or
mortgage insurance company familiar with the area in which the property is
located in addition to any encumbrances against the property. The ISD worker
determines the equity value of the property by subtracting the amount of the
encumbrances from the fair market value of the property.
G.
Hardship: Applicants or
recipients who are on restricted coverage due to excess equity in their homes
may request an undue hardship waiver based on the criteria specified in
8.281.500.24 NMAC.
H.
Real
property:
(1) If an applicant or
recipient is the sole owner of real property, other than the applicant's or
recipient's or their primary residence and has the right to dispose of it, the
entire equity value is included as a countable resource.
(2) If an applicant or recipient owns
property with one or more individuals and the applicant or recipient has the
right, authority or power to liquidate the property or their pro-rata share of
the property, it is considered a resource. If a property right cannot be
liquidated, the property will not be considered a resource to applicant or
recipient. The applicant or recipient must provide a copy of the legal document
which indicates their interest in the property.
I.
Vehicles: One automobile is
totally excluded regardless of value if it is used for transportation for the
applicant or recipient or a member of applicant's or recipient's household. Any
other automobiles are considered to be non-liquid resources. Recreational
vehicles and boats are considered household goods and personal effects rather
than vehicles.
J.
Household
goods and personal effects: Household goods and personal effects are
considered countable resources if the items were acquired or are held for their
value or are held as an investment. Such items can include but are not limited
to gems and jewelry that is not worn or held for family significance, or
collectibles.
K.
Promissory
notes: If an applicant or recipient holds or owns a promissory note and
the note is negotiable, it is a countable resource. The value is the
outstanding principal balance due at the time of the applicant's or recipient's
MAP application, unless the applicant or recipient proves that it has a lower
value.
(1) A promissory note held by the
applicant or recipient must be a bona fide loan. This means that it must be
legally valid and made in good faith. The ISD worker must evaluate the note and
determine whether or not it is a bona fide loan. In order to determine if the
note is a bona fide loan, the ISD worker should obtain documentation of the
applicant's or recipient's receipt of payments on the note at the time of
application and at re-certification. If the applicant or recipient sells or
transfers the promissory note, then they may be subject to a penalty for a
transfer of assets for less than fair market value.
(2) If the promissory note is non-negotiable,
and the applicant or recipient receives payments on the note that could be used
for food or shelter, then the amount of the payment retained in the month
following receipt is a resource to the applicant or recipient.
(3) If an applicant or recipient purchases a
promissory note, loan or mortgage, the repayment terms must be actuarially
sound, provide for equal payment amounts with no deferral or balloon payments,
and it must contain a provision that prohibits cancellation of the balance upon
the death of the lender. A promissory note not meeting these requirements shall
be treated as a transfer of assets for less than fair market value. If a
promissory note does not meet these requirements, the value of the note, loan
or mortgage is the outstanding balance due on the date of the applicant's or
recipient's MAP application.
L.
Pension funds: A pension
fund, if accessible to the applicant or recipient, is a countable resource. Any
fees for withdrawal of the funds are subtracted from the balance and the
remainder is a countable resource.
M.
Individual retirement accounts
(IRA): An IRA is a tax-deductible savings account that sets aside money
for retirement. Funds in an IRA are counted as an asset in their entirety less
the amount of penalty for early withdrawal.
N.
Keogh plan: A Keogh plan is a
retirement plan established by a self-employed applicant or recipient alone or
for the self-employed applicant or recipient and their employees. If the Keogh
plan was established for the self-employed applicant or recipient alone, the
funds in the plan are counted as an asset in their entirety less the amount of
penalty for early withdrawal. If the Keogh plan was established for employees
other than the spouse of the applicant or recipient, the funds do not count as
an asset.
O.
Loans: In
some circumstances a loan may be a countable resource.
(1) Negotiable loan. If an applicant or
recipient owns a loan agreement or is a lender and the agreement is a
negotiable, bona fide loan:
(a) the
outstanding principal balance is a resource of the applicant or
recipient;
(b) the cash provided to
the borrower is no longer the applicant or recipient lender's resource because
they cannot access it for their own use; the loan agreement replaces the cash
as the applicant or recipient lender's resource;
(c) payments that the applicant or recipient
lender receives from the borrower against the loan principal are conversions of
a resource, not income; if retained, the payments are counted as the applicant
or recipient lender's resource starting in the month following the month of
receipt; and
(d) interest income
received by the applicant or recipient lender is unearned income.
(2) Non-negotiable loan. If the
applicant or recipient owns a loan agreement or is a lender and the loan
agreement is not a bona fide loan or is not negotiable:
(a) the agreement is not a resource of the
applicant or recipient lender;
(b)
payments against the principal are income to the applicant or recipient lender,
not conversion of a resource;
(c)
the cash specified in the agreement may be a resource if the applicant or
recipient lender can access it for their own use; and
(d) interest income received by the applicant
or recipient lender is unearned income.
(3) Bona fide loan. If the applicant or
recipient is the borrower and the agreement is a bona fide loan:
(a) the loan agreement itself is not a
resource for the applicant or recipient; and
(b) the cash provided by the applicant or
recipient lender is not income, but is the borrower's resource if retained in
the month following the month of receipt.
(4) Not a bona fide loan. If the applicant or
recipient is the borrower and the agreement is not a bona fide loan:
(a) the loan agreement itself is not a
resource of the applicant or recipient; and
(b) the cash provided by the applicant or
recipient lender is income in the month received and is a resource if retained
in the month following the month it was received.
(5) Informal loan. If the agreement is an
agreement between applicants or recipients who are not in the business of
lending money or providing credit, it is an informal loan. An informal loan is
bona fide if it meets all of the following criteria:
(a) the agreement is enforceable under state
law;
(b) the agreement is in effect
at the time that the cash is provided to the borrower; money given to an
applicant or recipient with no obligation to repay cannot become a loan at a
later date;
(c) the obligation to
repay the loan must be acknowledged by both the applicant or recipient lender
and the borrower; when money or property is given and accepted based on any
understanding other than it is to be repaid by the receiver, there is no
loan;
(d) the agreement must
include a plan or schedule for repayment, and the borrower's express intent to
repay by pledging real or personal property or anticipated future income (such
as social security insurance (SSI) benefits);
(e) the repayment plan or schedule must be
feasible; in determining the plan's feasibility, consider the amount of the
loan, the applicant's or recipient's resources and income and the applicant's
or recipient's living expenses;
(f)
if the applicant or recipient is the borrower, the loan proceeds are a resource
if they are retained in the month following the month of receipt; the resource
value is the amount of the proceeds that the applicant or recipient still holds
in the month following the month of receipt;
(g) if the applicant or recipient is the
lender, the agreement is a countable resource starting in the month after the
month that the applicant or recipient lender provides the proceeds to the
borrower; and
(h) the agreement's
resource value is the outstanding principal balance unless the applicant or
recipient lender provides evidence that the loan has a lower value.
P.
Other financial
instruments: Other financial instruments will be evaluated by HSD to
determine if they are a countable resource.
Q.
Continuing care retirement
community, assisted living, life care community or like living
arrangement: The portion of initial fees paid upon signing a contract
for housing and care that has a potential to be refunded to the applicant or
recipient is countable.
R.
Other countable resources: Other liquid or non-liquid resources
must be considered in the calculation of total countable resources. The
following non-liquid resources may be included in the calculation of countable
resources if they cannot be excluded pursuant to
8.281.500.13
NMAC:
(1) burial funds;
(2) burial spaces;
(3) life insurance and other insurance
products such as annuities;
(4)
income-producing property; and
(5)
other financial investment products.
