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Transfers of Resources

As of December 14, 1999, giving away or transferring a resource for less than fair market value can result in a period of ineligibility for SSI for up to 36 months. The number of months of ineligibility depends on the value of the resource that was given away, but cannot exceed 36 months.

For initial claims, SSA will ask all SSI applicants if any resources were transferred within 36 months before the date of filing for SSI. In SSI re-determinations, the SSA will ask SSI recipients if any resources were transferred since the last SSA review.

In some states transfer of resources is also known as divestment. Invalid transfers occur when property or cash is given away, or is sold below market value. The effect of transfers on SSI and Medicaid eligibility has changed in the last 20 years due to changes in the law. As of 12/14/99, if an individual gives away or sells a resource for less than it is worth, the person may be ineligible for SSI for up to 36 months. SSA refers to this transfer as an “invalid transfer” and the property is counted as a resource for SSI purposes. The length ineligibility depends on the value of the resource transferred.

Valid Transfers

A valid transfer is based on a legally binding agreement. When there is a valid transfer, the individual no longer owns the resource. Both selling a resource and giving away a resource are valid transfers. If an individual sells a resource for what it is worth (fair market value), the 36-month period of ineligibility does not apply. However, what the individual or eligible couple receives for the sale may be countable as a resource in the month following the transfer. For example, the individual owns a parcel of land worth $5,000 that is not an excludable resource so he or she is not eligible for SSI. If he or she sells the real estate in April and receives $5,000, this money, if retained, will count as a resource as of May. And the individual would be ineligible for SSI if he or she is over the $2,000 limit.

Conditional Benefit Agreements

An individual who meets all other SSI eligibility requirements but is over the resource limit because he or she owns excess nonliquid resources can receive conditional SSI benefits for up to 9 months. The individual must agree in writing to sell the excess resources and reimburse SSA for the SSI benefits paid with the proceeds of the resources when sold. Nonliquid resources are any resources which are not in the form of cash or which cannot be converted to cash within 20 workdays.

Conditional benefits are payable for up to 9 months while trying to sell real property. Real property is land and/or buildings. While trying to sell personal property (cash, jewelry, household goods, automobiles), an individual can receive conditional SSI benefits for up to 3 months.

Conditional benefits cannot begin until a “conditional benefits agreement” is developed, signed, and accepted by SSA. To be eligible for a “conditional” exclusion of excess property, the following circumstances need to be met:

Note: SSA will permit one 3-month extension for disposal of personal property for good cause. Good cause exists when circumstances beyond an individual’s control prevent them from taking the required actions to accomplish the reasonable efforts to sell. Examples might be the person not receiving an offer to buy the property, or being incapacitated by illness.

Invalid Transfers

Invalid Transfers may cause ineligibility for SSI. The SSA will compute the period of ineligibility using the following rules:

The result of this calculation represents the number of months the person will be ineligible to receive an SSI payment, up to a maximum of 36 months. The calculation is more complex for eligible couples or when spouse-to-spouse deeming is involved.

Retirement Funds

Retirement funds are annuities or work-related plans for providing income when employment ends. They include pensions, disability or retirement plans of an employer or union, and funds held in an individual retirement account (IRA) and Keogh plans.

SSA makes resource determinations for retirement funds based on the ability to receive funds from the account. A retirement fund owned by an eligible individual is a resource if the individual has the option of withdrawing a lump sum even though he/she is not yet eligible for periodic payments. However, a retirement fund is not a resource if the individual must terminate employment in order to obtain any payment. Periodic retirement benefits are payments made to an individual at a regular interval, (like monthly retirement payments), that result from entitlement under a retirement fund. If the individual is eligible to retire, or to otherwise receive periodic payments, the fund may not be a countable resource. In this case, the periodic payments would count as income for SSI purposes. The individual is required by law to apply for those benefits to be eligible for SSI. If the individual has a choice between periodic benefits and a lump sum, the person would be ineligible for SSI unless they choose to take periodic benefits. If a person is required to apply for these types of benefits, SSA will send them a notice.

Different retirement accounts, regardless of their title, may have different effects. This will depend on whether or not the person may access the funds. As with trusts, it is NOT the Benefits Specialists job to make that determination. If there is any question at all, ask the SSA to render a determination.

FAQ Disclaimer: The VCU-BARC FAQ Pages are general information provided as a public service. The contents do not necessarily represent the policy, interpretations or opinion of the Social Security Administration (SSA). The information contained here is intended to inform readers of issues that may affect Social Security and/or other public assistance benefits. Because individual circumstances differ, the reader should not rely on any information here as being specifically applicable to an individual's situation.