Library: Policy

OKDHS:10-1-6. Personal property

Issued 4-1-98

     This Section describes personal property and how it is considered in determining eligibility for AFDC.

• (1) Household goods and equipment. Items essential to day-to-day living such as clothing, furniture and other similarly essential items of limited value are excluded as resources.
• (2) Livestock and equipment.
  • (A) Used in a business enterprise. The client's equity in livestock, equipment or inventory of merchandise in a business enterprise is considered in relation to the reserve only if the client is not actively engaged in the business enterprise. Equity or inventory is not counted if the client actively participates in the business or is only temporarily inactive (e.g., incapacitated) and can reasonably expect and has plans to resume the business enterprise. Equity is established on the basis of oral or written information which the client has at hand and counsel with persons who have specialized knowledge about the particular resources.
  • (B) Livestock and home produce. As an incentive towards self-help, each family unit may have exempt from consideration as reserve any livestock or produce grown and used for home consumption.
• (3) Cash savings and bank accounts. Money on hand or a savings account is considered as reserve. The client's statement that he/she does not have money on hand or on deposit is sufficient unless there are indications to the contrary. When there is information to the contrary or when the client does not have records to verify the amount on deposit, verification is obtained from bank records. Title 56, O.S., Section 167.1 provides that financial records obtained for the purpose of establishing eligibility for assistance or services must be furnished without cost to the client or the Department.
  • (A) Checking accounts may or may not represent savings. Current bank statements are evaluated with the client to establish what, if any, portion of the account represents savings. Do not consider any income which has been deposited during the current month.
  • (B) Accounts which are owned jointly by the client and a non-recipient person shall be considered available to the client in their entirety unless it can be established what part of the account actually belongs to each of the owners, and the money is actually separated and the joint account dissolved.
• (4) Insurance policies and prepaid funeral benefits.
  • (A) Life insurance policies. The cash surrender value (CSV) less any loans or unpaid interest of life insurance policies owned by members included in the AFDC grant is counted as part of the reserve. Dividends which accrue and which remain with the insurance company increase the amount of reserve. Dividends which are paid to the client are considered as income. However, assignment of the face value of a life insurance policy to fund a prepaid burial contract, is not counted as part of the reserve. In this instance, the amount of the face value of the life insurance is evaluated according to the policy on burial funds or, if applicable, the policy on the irrevocable burial contract. The CSV can usually be verified by inspection of the insurance policy and documents in the client's possession, or by use of the Appendix C of this Chapter, Request to Insurance Company.
  • (B) Burial spaces. The value of a burial space per family member whose needs are in the grant or whose income and resources are considered when computing the grant is excluded from resources. "Burial spaces" means conventional gravesites, crypts, mausoleums, urns, and other repositories which are customarily and traditionally used for the remains of deceased persons.
  • (C) Burial funds. Revocable burial funds not in excess of $1500 for each member included in the grant are excluded as a resource if the funds are specifically set aside for the burial arrangements of the individual. Any amount in excess of $1500 for each member included in the grant is considered as a resource. Burial policies which require premium payments and do not accumulate cash value are not considered to be prepaid policies.
    • (i) "Burial funds" means a prepaid funeral contract or burial trust with a funeral home or burial association which is for the individual's burial expenses.
    • (ii) The face value of a life insurance policy, when properly assigned by the owner to a funeral home or burial association, may be used for purchasing "burial funds" as described in (i) of this paragraph.
    • (iii) The burial fund exclusion must be reduced by the face value of life insurance policies owned by the individual, and by the amounts in an irrevocable trust or other irrevocable arrangement.
    • (iv) Interest earned or appreciation on the value of any excluded burial funds is excluded if left to accumulate and become a part of the burial fund.
    • (v) If the client did not purchase the prepaid burial, even if the client's money was used for the purchase, he or she is not the "owner" and the prepaid burial funds cannot be considered a resource to the client.
  • (D) Irrevocable burial contract. Oklahoma law provides that a purchaser (buyer) of a prepaid funeral contract may elect to make the contract irrevocable. Irrevocability can never become effective until 30 days after purchase.
    • (i) If the irrevocable election was made prior to July 1, 1986, and the client received assistance on July 1, 1986, the full amount of the irrevocable contract is excluded as a countable resource. This exclusion applies only if the client does not add to the amount. of the contract. Interest accrued on the contract is not considered as added by the client. Any break in assistance will require that the contract be evaluated at the time of reapplication.
    • (ii) If the effective date for the irrevocable election or application for assistance is July 1, 1986 or later, the amount in any combination of an irrevocable contract, revocable prepaid burial contract or trust and the cash value of unassigned life insurance policies cannot exceed $6000. When the principal amount exceeds $6000, the client is ineligible for assistance. Accrued interest is not counted as a part of the $6000 limit, regardless of when it is accrued.
    • (iii) For an irrevocable contract to be valid, the election to make it irrevocable must be made by the purchaser (owner) or the purchaser's guardian or an individual with power of attorney for the purchaser (owner).
    • (iv) When Appendix D of Chapter 35 is on file in the long-term care facility, the form serves as a power of attorney for the administrator to purchase or elect to make irrevocable the burial funds of the client.
  • (E) Medical insurance. When a client has medical insurance (directly purchased or available in conjunction with employment) the available benefits are applied toward the medical expense for which the benefits are paid. If an assignment of the insurance is not made to the vendor and payment is made directly to the client, the client must apply the payment to the cost of medical services. Any amount remaining after payment for medical services is considered in relation to the reserve.
• (5) Stocks, bonds, mortgages and notes. The client's equity in stocks and bonds (including U.S. Savings Bonds, Series A through EE) is considered in relation to the reserve. The current market value less encumbrances is the equity. In general, determination of current market value can be obtained from daily newspaper quotations, brokerage houses, banks, etc. Except for a bond which has been held beyond the maturity date, the current value is the redemption value listed in the table on the back of the bond for the anniversary date most recently reached. If the bond has been held beyond maturity date, it has continued to draw interest. An acceptable determination of the value may be made by checking against a client at the bank.
  • (A) The amount which can be realized from notes and mortgages and similar instruments, if offered for immediate sale constitutes a reserve.
  • (B) Appraisals obtained from bankers, realtors, loan companies and others qualified to make such estimates are obtained in determining current market value. When a total reserve approaches the maximum, it is desirable to get two or more estimates.
• (6) Non-negotiable resources. Installment payments received on a note, mortgage. etc., for which a buyer cannot be found is considered as monthly income.
• (7) Automobiles, pickups and trucks. The market value of each year's make and model is established on the basis of the "av'g. Trade In value" as shown in the current National Automobile Dealers Association (NADA) on "Cars, Trucks and Imports" which is provided monthly to each county office by the State Office. If a vehicle is not listed in the NADA Book, the household's estimate of the value of the vehicle is accepted unless the worker has reason to believe the estimate is incorrect. In the event the client and worker cannot agree on the value of the vehicle, the client will secure written appraisal by two persons who are familiar with current values. If there is substantial unexplained divergence between these appraisals between the book value and one or more of these appraisals, the worker and the client will jointly arrange for the market value to be established by an appraisal made by a third person who is familiar with current values and who is acceptable to both the client and the worker.
  • (A) Exempt automobiles. Exempt one automobile, pickup, truck or other vehicle used for the primary source of transportation per family not to exceed an equity of $1500.00. The amount of the equity in excess of $1500.00 is considered against the resource limit.
  • (B) Other vehicles. The equity in other automobiles, pickups and trucks as well as other personal property including boats, travel trailers, motorcycles, motor homes, campers, etc. is considered in relation to the reserve. The current market value, less encumbrances on the vehicle, is the equity. Only encumbrances that can be verified are considered in computing equity.
• (8) Lump sum payments. A lump sum settlement which compensates for the loss of a resource such as an automobile may be disregarded in the amount used to replace the loss. The client is given a reasonable time to replace the loss not to exceed a 30-day period. Extension beyond the 30 days may be justified in special instances when completion of the transaction is beyond the client's control. Any amount remaining after the replacement of the loss is considered as income. Income Tax refunds, except for the portion that represents an earned income tax credit (EITC), must be treated as a resource and considered available to the recipient upon receipt. Retirement benefits received as a lump sum payment at termination of employment are considered a resource. These benefits would not be treated as income because the retirement contribution was regarded as income in the month earned and withheld by the employer.
• (9) Resource disregards. In determining need, the following are not considered as resources:
  • (A) The coupon allotment under the Food Stamp Act of 1977;
  • (B) Any payment received under Title II of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970;
  • (C) Education grants (including work study), scholarships, etc., if receipt is contingent upon the student regularly attending school. The student's classification (graduate or undergraduate) is not a factor.
  • (D) Loans (regardless of use) if a bona fide debt or obligation to pay can be established. Criteria to establish a loan as bona fide includes an acknowledgment of obligation to repay or evidence that the loan was from an individual or financial institution in the loan business. The borrower's acknowledgment of obligation to repay (with or without interest) is considered to indicate that the loan is bona fide. If the loan agreement is not written, Form Adm-103, Loan Verification, should be completed by the borrower attesting that the loan is bona fide and signed by the lender verifying the date and amount of loan. If copies of written agreements or Form Adm-103 are not available, detailed case documentation must include information that the loan is bona fide and how the debt amount and date of receipt was verified;
  • (E) Indian payments (including judgment funds or funds held in trust) distributed per capita by the Secretary of the Interior (BIA) or distributed per capita by the tribe subject to approval by the Secretary of the Interior. Also, any interest or investment income accrued on such funds while held in trust or any purchases made with judgment funds, trust funds, interest or investment income accrued on such funds. Any income from mineral leases, from tribal business investments, etc., as long as the payments are paid per capita. For purposes of this paragraph, per capita, defined as each tribal member receiving an equal amount. However, any interest or income derived from the principal or produced by purchases made with the funds after distribution is considered as any other income;
  • (F) Special Allowance for school expenses made available upon petitions (in writing) from funds held in trust for the student;
  • (G) Benefits from State and Community Programs on Aging (Title III) are disregarded. Income from the Older American Community Service Employment Act (Title V), including AARP and Green Thumb organizations as well as employment positions allocated at the discretion of the Governor of Oklahoma, is counted as earned income. Both Title III and Title V are under the Older Americans Act of 1965 amended by P.L. 100-175 to become the Older Americans Act amendments of 1987;
  • (H) Unearned income received by an AFDC child, such as a needs based payment, cash assistance, compensation in lieu of wages, allowances, etc., from a program funded by the Job Training and Partnership Act (JTPA), including Job Corps income. Also, JTPA earned income received as wages, not to exceed six months in any calendar year;
  • (I) Payments for supportive services or reimbursement of out-of-pocket expenses made to individual volunteers serving as foster grandparents, senior health aides, or senior companions and to persons serving in the Service Corps of Retired Executives (SCORE) and Active Corps of Executives (ACE) and any other programs pursuant to the Domestic Volunteer Service Act of 1973;
  • (J) Payments to volunteers under the Domestic Volunteer Service Act of 1973, (VISTA), unless the gross amount of VISTA payments equals or exceeds the state or federal minimum wage, whichever is greater;
  • (K) The value of supplemental food assistance received under the Child Nutrition Act or the special food service program for children under the National School Lunch Act:
  • (L) Any portion of payments, made under the Alaska Native Claims Settlement Act to an Alaska Native, which are exempt from taxation under the Settlement Act;
  • (M) Experimental Housing Allowance Program (EHAP) payments made under Annual Contributions Contracts entered into prior to January 1,1975, under Section 23 of the U.S. Housing Act of 1937, as amended;
  • (N) Advance payments of Earned Income Tax Credit (EITC) or refunds of EITC (as a result of filing a federal income tax return) in the month received and the following month;
  • (0) Payments from the Agent Orange Settlement Fund or any other fund established pursuant to the settlement in the In Re Agent Orange product liability litigation, M.D.L. No. 381 (E.D.N.Y.);
  • (P) Payments made from the Radiation Exposure Compensation Trust Fund as compensation for injuries or deaths resulting from the exposure to radiation from nuclear testing and uranium mining;
  • (Q) Federal major disaster and emergency assistance provided under the Disaster Relief Act of 1974, and comparable disaster assistance provided by state, local governments and disaster assistance organizations;
  • (R) Interests of individual Indians in trust or restricted lands. However, any disbursements from the trust or restricted lands are considered as income;
  • (S) A migratory farm worker's out-of-state homestead is disregarded if the farm worker's intent is to return to the homestead after the temporary absence; and
  • (T) A non-recurring lump sum SSI retroactive payment, made to an AFDC recipient, shall not be counted as income or a resource for AFDC purposes in the month paid and the next following month. The amount remaining in the second month after the month of receipt is a countable resource.