2300 NEED

2301 General Principles Regarding Determination of Need

The purpose of AFDC assistance is to supplement the income and resources of dependent children and eligible adult relatives when they are not sufficient to provide a minimum standard of living. AFDC assistance is limited by State and Federal law to persons found to be needy. In order to insure equitable treatment for all applicants the Division has established standard procedures for determining an applicant's basic needs and comparing these needs to the income and resources available.

The eligibility requirement of need is established by:

1. Determining the value of resources available to persons in the AFDC assistance unit and determining whether these resources fall within allowable limits;
2. Determining the income available to persons in the AFDC assistance unit and comparing this income to the standard of need, as established by the Division.

The income, except as otherwise disregarded under FA 2351, of all persons included in the AFDC needs standard must be considered in determining eligibility for assistance. The income and resources of a natural or adoptive parent living in the home with the child are considered whether or not his needs are included unless the parent receives SSI. The income of certain other persons living with the assistance unit, as specified below, is also considered.

The income and resources of the following persons will be determined as specified:

1. All dependent children whose needs are included in the standard of need;
2. The natural or adoptive parent of any of the dependent children, if living in the home, unless the parent receives SSI;
3. A relative other than a parent, if his needs are to be included in the needs standard for the assistance unit. If such relative has a spouse living in the home, then the spouse's income, minus all allowable deductions specified in FA 2377.3, must also be considered unless the spouse receives SSI. Any resources which are available only to the spouse are not considered.
4. The step-parent living in the home with the dependent child unless the step-parent receives SSI. Only the income of a step-parent must be determined. Any resources which are available only to the step-parent are not considered. (Refer to FA 2377.1)

5. The parent(s) of an un-emancipated minor parent who is living in the home with such minor and the dependent child unless the minor's parent receives SSI. Any resources which are available only to the minor's parent(s) are not considered. (Refer to FA 2377.2)
6. The sponsor, if an individual, of certain aliens. Both the income and resources of the sponsor must be determined. (Refer to FA 2377.4 and 2313.3)

A resource is any real or personal property available to an individual to meet his needs. Only those resources currently available, or for which the individual has the legal ability to make available, will be considered. Accumulations in trust funds, retirement and profit-sharing plans, or other arrangements which preclude the use of the property for meeting current needs will not be considered until such time as the property is actually available to the individual.

All or any portion of a payment which is considered as income in the month of receipt cannot be considered as a resource in the same month.

EXAMPLE: Ms. Smith has a checking account with a balance of $750. On March 5, she deposits her regular monthly $100 Social Security check into it. Since the $100 she deposited is income for March, it cannot be included as part of the resource (the checking account) for March. Any of the March $100 remaining in the account as of April 1, however, would then be considered as a resource.

The equity value of all resources available to the assistance unit, except those specifically disregarded in FA 2312, must be determined. Equity value is the fair market value of the property less any liens or encumbrances.

The total equity value of all countable resources available to the assistance unit except for that amount specifically disregarded from the equity of certain resources specified in FA 2313-2313.3 cannot exceed $1000.

The equity value of all resources available to the assistance unit, except those specifically disregarded in FA 2312, must be determined. Equity value is the fair market value of the property less any liens or encumbrances.

The total equity value of all countable resources available to the assistance unit except for that amount specifically disregarded from the equity of certain resources specified in FA 2313-2313.3 cannot exceed $1000.

The following resources are not considered in determining family Medicaid eligibility:

1. The homestead (Refer to FA 2312.1);
2. Household furniture, appliances, and personal effects;
3. Farm or other equipment used to produce income;
4. The stock and inventory of a self-employment enterprise;
5. Livestock used for subsistence;
6. Loan obtained under Title 111 - EOA;

   7. a. Grants or loans to an undergraduate student for educational purposes
            made or incurred under any program administered by the
            Commissioner of Education.

        b. Educational assistance provided for attendance costs under 
            programs in the Carl D. Perkins Vocational and Applied Technology
            Education Act.

8. That portion of a grant, scholarship, payment under the Veterans' Educational Assistance Program (GI Bill), or unearned income paid to or for an individual conditioned upon school attendance which is used for items necessary for school attendance, such as tuition, books, fees, equipment, special clothing needs, transportation, and child care services.
9. Bona fide loans from any source (e.g., bank, any other establishment engaged in the business of making loans, or an individual). Refer to FA 2351. (Interest received on loans and retained in the months following the month the interest was received is considered a resource.)
10. Relocation allowances and adjustment payments made by Federal agencies under any Federally financed relocation assistance program.
11. That portion of payments received as a settlement (insurance, law suit, etc.) which is intended and used for a purpose which precludes its use for current living costs. (Refer to FA 2379, #5)
12. Funds distributed to members of the Red Lake Band of Chippewa Indian pursuant to Public Law 98-123, enacted October 13, 1983, and funds distributed to members of the Assiniboine Tribe of the Fort Belknap Indian Community and the Assiniboine Tribe of the Fort Peck Indian Reservation pursuant to Public Law 98-124, enacted October 13, 1983.
13. One burial plot per assistance unit member.
14. For a specified period of time, excess real property which the individual is making a good faith effort to sell (Refer to FA 2322).
15. Earned Income Credit (EIC) refunds or advance payments in the month of receipt and the following month.
16. Payments made from the Agent Orange Settlement Fund or any other fund established pursuant to the settlement in the In Re Agent Orange product liability litigation retroactive to January 1, 1989.
17. Payments made under the Radiation Exposure Act (Public Law 101-426) retroactive to October 15, 1990. These payments may be made to individuals in which injury or death resulted from the exposure to radiation from nuclear testing and uranium mining.
18. Payments made under the Civil Liberties Act of 1988 (Title I of Public Law 100-383) and under the Aleutian and Pribilof Islands Restitution Act (Title II of Public Law 100-383) to Aleuts. These Acts provide for the federal government to make restitution payments to individuals or if deceased, the individual's spouse, children or parents, who were interned during World War II.

19. Payments made under the Maine Indian Claims Settlement Act of 1980. These payments are made to members of the Passamaquoddy Indian Tribe, the Penobscot Nation and the Houlton Band of Maliseet Indians for the settlement of land claims.
20. Payments made under the Aroostook Band of Micmacs Settlement Act. These payments are made to members of the Aroostook Band of Micmacs for the settlement of land claims.
21. Major disaster and emergency payments made to individuals and families under the Disaster Relief Act of 1974 and comparable disaster assistance provided by States, local governments, and disaster assistance organizations.
22. Section 4735 of the Balanced Budget Act of 1997 (Public Law 105-33) states that payments made from any fund established as a result of a class settlement in the case of Susan Walker vs. Bayer Corporation are excluded from countable resources. This case involved hemophiliacs who contracted the HIV virus from contaminated blood products. Also excluded from countable resources are payments made pursuant to a release of all claims in a case that is entered into in lieu of the Walker vs. Bayer class settlement and that is signed by all affected parties on or before the later of December 31, 1997, or 270 days after the date on which the release is first sent to the persons to whom the payment is to be made.

NOTE: Interest earned by these lump sum funds and allowed to accrue is not excluded from countable resources.

The value of real property used by the assistance unit as a homestead is totally disregarded in determining AFDC eligibility.

A homestead is a house and tract of land which a person considers his home. A mobile home or trailer used as a home will be considered as a homestead, regardless of whether the person also owns the property on which the mobile home is situated.

Only one such tract will be considered a homestead. However, there is no limit to the acreage or number of lots so long as the property is contiguous. Any other dwelling units or apartments on the property will be considered a part of the homestead.

The family must be presently residing on the property or intend to move on to it within a period of six months from the date of application or date of purchase, whichever is later.

If the family ceases to live on the property, it will continue to be regarded as a homestead for a period of six months from the date they left the home or the date of application, whichever was later, provided they intend to return to it. The recipient will be advised that the homestead becomes excess property after six months.

If the homestead is sold, the net proceeds received from the sale will be disregarded for a period of six months provided the casehead intends to apply such proceeds towards the purchase of another homestead. When the conditions of the sale of the homestead are such that the proceeds will be received through installment payments, then such proceeds will be disregarded as they are received provided they are applied to the payment of another homestead.

Only that portion of the proceeds, whether received in full or through installment payments, which are actually applied towards the purchase of the new homestead may be disregarded. Any remaining amount will be considered according to FA 2315, Items 3 or 4, as appropriate.

Example #1: A client receives $10,000 for his homestead. He re-invests only $8000 into a new home. Therefore, the remaining $2000 will be considered a resource.

Example #2: A client sells his homestead through an installment payment contract for which the entire balance is not payable upon demand. The monthly payment from the sale is $200. He uses $150 from that payment to make the payment on his new home. Therefore, the remaining $50 will be considered as unearned income.

The casehead will be advised that if another homestead is not purchased within the six month period, then at the end of the six months the proceeds will be considered a resource if received in full, or as unearned income if received in installment payments (Refer to FA 2315). If a client who is receiving installment payments later purchases another homestead and applies the installment payment to the new home, then that portion applied may be disregarded.

2313.1 Motor Vehicles

Each assistance unit will be allowed a disregard of $1500 of the equity in one motor vehicle. Equity is the vehicle's wholesale market value less any liens or encumbrances. The full equity value of any other vehicles owned by the persons whose resources must be considered (Refer to FA 2303), plus any equity in the first vehicle in excess of the $1500 disregard, is considered a resource.

Value determinations for vehicles listed in the NADA Used Car Guide, issued to County Offices semi-annually, will be made by obtaining the current trade-in value from the NADA Guide. Do not add or subtract the value of optional equipment. If the vehicle is too new to be listed in the NADA Guide, then the purchase price of the vehicle will be verified and used to determine the equity.

If a vehicle is too old to be listed in the NADA Guide, it will usually be assumed to have a value of $1500 or less. If only one vehicle is owned and it is too old to be listed, or it has a trade-in value of $1500 or less, it may be excluded without a determination of equity.

EXCEPTION: The value of a vehicle of "obvious value" in the worker's judgment will be determined even if it is too old to be listed. Such vehicles may include Jaguar, Mercedes-Benz, Rolls Royce, Cadillac, Lincoln, Corvette, Datsun 240-Z, customized auto or antique auto. An auto twenty-five years or older may be considered an antique auto, depending on its condition.

If more than one vehicle is owned, then the equity in each vehicle will be determined. Since the $1500 disregard can be applied to only one vehicle, it will be applied to the vehicle with the greatest equity value. No amount can be disregarded from the equity value of the remaining vehicles even if the value of the first vehicle was less than the $1500 disregard.

Value determinations for vehicles too old to be listed and for other types of personal transportation such as boats, buses, motorcycles, etc., which are not listed in the NADA Guide should be obtained by the Service Representative through contact with a knowledgeable source such as a local dealer, automobile insurance company or the county personal property tax office. Complete information should be given to the contact regarding the particular make, model, and year of the motor vehicle. The case narrative should be documented as to the source of the valuation and the valuation given. If the casehead disagrees with the value determination, he or she may obtain at least two written appraisals of the value from knowledgeable sources. If the appraisals appear to be questionable, the Service Representative should verify their accuracy with the knowledgeable sources. If the Service Representative determines the appraisals are accurate, the equity in the vehicle(s) will be re-determined.

Jointly Owned Vehicles

When a vehicle is jointly owned by an AFDC client and another person whose needs are not included in the same AFDC assistance unit, only the AFDC client's prorata share of the vehicle's equity value will be considered. The $1500 disregard will be applied to the AFDC client's share of the equity value (if not already applied to another vehicle).

EXAMPLE: Mr. and Mrs. Smith jointly own a car. Both their names are on the title as "John or Jane Smith." Mrs. Smith receives AFDC for a child from a previous marriage. Their total net equity in the car is determined to be $2000 of which Mrs. Smith's prorata share (1/2) is $1000. Since Mr. Smith is a stepparent, his resources are not considered. Therefore, only Mrs. Smith's $1000 equity will be considered. The $1500 disregard is applied to her $1000 share of the equity resulting in zero equity to consider as a resource.

This applies equally to situations in which the co-owner is, or is not, an SSI recipient. In either case, the AFDC client's prorata share of the equity value will be considered in determining his/her AFDC eligibility.

NOTE: If an AFDC client is the sole owner of a vehicle which was purchased with an SSI child's funds, then the full equity value is considered as belonging to the AFDC client.

Determining New Equity

To determine the amount of equity to be considered, the following procedure will be followed:

1. Determine the amount of net equity in each vehicle owned by:

1. Making a value determination for the vehicle as described above.
2. Subtracting from the determination the amounts of any liens or encumbrances.

2. If the vehicle is jointly owned, determine the AFDC client's prorata share of the net equity.
3. Subtract up to $1,500 from the client's net equity of the vehicle with the highest equity value. Any amount remaining of the $1500 disregard may not be applied to other vehicles.
4. Add the client's full net equity of any other vehicles to the amount remaining after the $1500 disregard. The total will be considered as a resource.

Each assistance unit member will be allowed a disregard of $1500 of the current equity value in funeral agreements. Any equity value in excess of $1500 is considered a resource.

The term "funeral agreements" includes burial insurance, pre-paid funeral arrangement contracts, and life insurance policies issued by funeral homes. The term "current equity value" is defined as the value of the agreement which can legally be converted to cash by the client.

If a funeral agreement has no current equity value, then it is not considered as an available resource. For example, a burial insurance policy with no cash surrender value or an irrevocable pre-paid funeral contract have no current equity value to the client.

2313.3 Resources of an Alien's Sponsor

A portion of the available resources of the sponsor of certain aliens must be deemed available to the alien in determining AFDC eligibility for a period of three years following the alien's entry into the United States. Under this provision, a sponsor is defined as an individual who executed an affidavit(s) of support or similar agreement on behalf of an alien as a condition of the alien's entry into the United States. This provision does not apply to any alien exempted from the sponsor-to-alien income deeming provision outlined in FA 2377.4.

If a non-exempted alien has an individual sponsor who is not an AFDC or SSI recipient, then it will be the alien's responsibility to provide information and verification of the sponsor's resources and obtain any cooperation necessary from the sponsor.

To determine the amount of the sponsor's or his/her spouse's resources which will be deemed available to the alien, the Service Representative will:

1. Determine the total amount of the sponsor's countable resources according to the same policies for determining an AFDC applicant/recipient's countable resources.
2. Deduct $1500 from the total countable resources amount.
3. The amount remaining is considered an available resource to the alien.

Any resource amount deemed to a sponsored alien will not be considered in determining the eligibility of other unsponsored members of the alien's family. When a person is the sponsor of two or more aliens, the amount of deemed resources will be divided equally among the sponsored aliens.

Except for property specifically disregarded in FA 2312 or considered according to FA 2313, the equity value of any other real or personal property available to the assistance unit will be considered in full.

When an AFDC client has joint ownership of a resource, the client's ownership interest and the availability of the resource to the assistance unit must be determined. If the resource is available to the unit, the net equity must then be determined.

Refer to FA 2320 and 2330 for more detailed discussion of real and personal property.

2314.1 Requesting A Legal Opinion on Resource Ownership or Availability

There are situations in which the client's ownership interest or ability to access the resource are not clearly evident. In such situations, it may be necessary to request a legal opinion from the Office of Chief Counsel (OCC).

To request an OCC opinion regarding a resource owned or jointly owned by a member of an AFDC assistance unit, the following procedure will be followed:

1. The County Office will submit a memorandum to the Assistant Director, Office of Program Planning and Development (OPPD).
2. The memo will specify that the request is for an AFDC case and will include a complete description of the circumstances surrounding the resource with copies of all documentation (deeds, titles, etc.) attached.
3. OPPD staff will screen the request to determine if all necessary information has been provided and will research the files to determine if an opinion on the issue has been obtained previously. If information is missing, contact with the requesting office will be made. Once all necessary information is obtained, the request will be forwarded to the Office of Chief Counsel if it is determined no previously obtained opinions address the issue.
4. Upon receipt of the OCC opinion or upon the determination that a prior opinion addresses the issue, a written interpretation, via memorandum from the Assistant Director, OPPD, will be provided to the requesting county office with a copy to the Office of Field Operations. This memo will be filed in the AFDC case record.

2315 Sale of a Resource

The sale of a resource, including disregarded resources, is considered a conversion of one type of resource (property) to another type (cash) except when the terms and conditions of the sale preclude the seller's ability to obtain full payment on demand. When an individual sells either real or personal property, the Service Representative will determine the amount the individual received for the property and any terms or conditions of the sale.

The net proceeds from the sale (sale price less any outstanding liens or encumbrances and costs related to the sale) will be considered as follows:

1. If the homestead was sold, refer to FA 2312.1.
2. If the sold resource was excess real property which was disregarded while the individual was attempting to sell it, refer to FA 2322.2.
3. If the individual received full payment for the property, apply the amount received to the resource limit. (Do not apply the lump sum provision.)
4. If the individual entered into a legal agreement or contract with the buyer by which payment is made through installment payments, then the Service Representative will determine whether the individual can require full payment on demand.

If the entire balance is payable on demand, then the individual's equity in such balance will be applied to the resource limit. If such amount, combined with other countable resources, does not exceed the resource limit and the case remains eligible, then only the interest portion of the installment payment will be considered as unearned income. The individual's equity in the balance will continue to be applied to the resource limit.

If the entire balance is not payable on demand, then the entire installment payment, less any amount for which the seller is obligated to pay on the sold property, will be considered as unearned income.

If an individual sells for less than market value a resource which would have otherwise made the family ineligible for assistance, then the reason for the sale must be determined and, if appropriate, the transfer of property policy applied (Refer to FA 2340 - 2344).

The equity value of any real property not used as a homestead (excess property) will be considered a resource in determining AFDC eligibility.

Ownership will be verified by deeds, wills, contract of purchase or other documentary evidence. When two or more persons own an interest in the property, the client's ownership interest and the availability of the property as a resource to the assistance unit must be determined (Refer to FA 2320.3).

Questions of title, ownership, and property interest which cannot be resolved by the County Office will be submitted by memorandum to the Central Office Program Development and Support Section who will request a legal opinion from the Office of Chief Counsel if necessary. The memorandum will present the question involved and any relevant facts. Originals or copies of wills, deeds, contracts of purchase, or other documents affecting the property must be attached. If the client does not have the necessary documents, he will be advised of his responsibility to obtain them.

2320.2 Forms of Ownership

1. Fee Simple Ownership - When property is held in fee simple, the owner has sole ownership interests. He alone (or his legal guardian if mentally incompetent) may sell or transfer ownership interest without conditions imposed by others.
2. Shared Ownership - Shared ownership means that ownership interest in property is vested with more than one person. Shared ownership may be by "joint tenancy", "tenancy in common" or, for a married couple, "tenancy by the entirety".

1. Joint Tenancy - In joint tenancy, each of two or more joint tenants has an equal interest in the whole property for the duration of the tenancy. On the death of one of two joint tenants, the survivor becomes sole owner.
2. Tenancy-in-Common - In tenancy-in-common, two or more persons have an undivided fractional interest in the whole property for the duration of the tenancy. There is no right to survivorship to a tenancy-in-common.
3. Tenancy-by-the-Entirety - Tenancy-by-the-entirety results when a conveyance is made to a husband and wife, whereupon each becomes possessed of the entire estate, and after death of one, the survivor takes the whole. Real estate owned by a married couple by the entirety is marketable only by consent of both parties. When a marriage has been legally dissolved, former spouses become tenants-in-common of the property, and either person can market his half share, unless conditions in the divorce decree specify otherwise.

3.  Life Estates

1. Life Estates - A life estate conveys upon an individual or individuals for his lifetime, certain rights in property. Its duration is measured by the lifetime of the tenant or of another person. The owner of a life estate has the right of possession, the right to use the property, the right to obtain profits from the property and the right to sell his life estate interest. (However, the document establishing the life estate may restrain one or more of the individual's rights.) He does not have title to the property or the right to sell the property.
2. Remainder Interest - When an individual conveys property to another for life (life estate) and to a second person(s) (remainder man) upon the death of the life estate holder, both a life estate interest and a remainder interest have been created in the property. Upon death of the life estate holder, the remainder man will own full title. Several individuals may be designated as remainder men who would hold ownership jointly or in common, as specified by will or deed.

4. Ownership Interest in Un-probated Estate

An individual may have ownership interest in an un-probated estate if he is an heir or relative of the deceased, or has acquired rights on the property due to the death of the deceased, in accordance with a will or State intestacy laws.

5. Dower/Curtesy

State law for Dower and Curtesy gives a spouse an interest in the other spouse's property. When the deceased leaves no will, Dower or Curtesy may be claimed. When the deceased leaves a valid will, a widowed spouse can elect to take against the will when he would have a greater right by Dower or Curtesy than the will provides.

If there are questions regarding the Dower or Curtesy interest, the Office of Chief Counsel will be contacted. A memorandum will be submitted to the Administrator, Program Development and Support, Central Office, Slot 1220. The memo will be from the EMS County Supervisor and will contain a complete description of the circumstances and copies of all pertinent documents. When requesting an opinion, indicate whether or not there are direct descendents (children, grandchildren, etc.)

6. Rights to Use

An individual may have ownership of certain property rights such as:

1. Mineral Rights - A mineral right is an ownership interest in certain natural resources which are usually obtained from the ground such as coal, sulfur, petroleum, sand, natural gas, etc.
2. Timber Rights - Timber rights permit an individual to cut and remove freestanding trees from property owned by another. A life tenant also has certain timber rights in keeping with good husbandry.
3. Easement - An easement is a property right whereby one has the right to use of the land of another for a special purpose.
4. Leasehold - A leasehold conveys to an individual, at the owner's will and usually for an agreed rent, the control of property for a definite period of time. It does not designate rights of ownership. Leaseholds may be carved out of life estates.

In determining the equity value (i.e., current market value less encumbrances) of real excess property, the type of ownership, the number of additional owners, and the individual's actual ownership interest must all be taken into consideration.

1. Fee Simple Ownership (Sole Ownership) - If the individual is the sole owner of excess property and has the right to dispose of it, the equity value of the property is a countable resource.
2. Shared Ownership - If the excess property is jointly owned by two or more individuals, the equity value of the property is charged to the individual in proportion to his ownership interest.

1. Joint Tenancy - The property's equity value is divided by the number of owners in proportion to the ownership interest of each to determine the individual's ownership interest. When the individual's ownership interest plus other countable resources exceed the resource limit, determine if the individual is free to sell his interest.


When consent to sell joint tenancy property can be obtained from the other owner(s), the property will be considered a countable resource.

When it is established (in writing) that consent to sell joint tenancy property cannot be obtained from the other owner(s), the property will not be considered a countable resource.

2. Tenancy-in-Common - The property's equity value is divided by the number of owners in proportion to the ownership interest of each to determine the individual's ownership interest. The value of the individual's interest will be considered a countable resource, regardless of the other owners' desire to sell.
3. Tenancy-by-the-Entirety - The property's equity value is divided by 1/2 to determine the individual's ownership interest. If the individual's spouse is willing to sell the property, then it will be considered a countable resource.

When it is established (in writing) that consent to sell the property cannot be obtained from the individual's spouse, the property will not be considered a countable resource.

3. Life Estate or Remainder Interest Held in Non-home Property

The values must be determined in accordance with State Law and the State Actuary Tables. The county will determine the value of the property in which the person has the life estate/remainder interest and route all the information to the Central Office for a determination on the value of the interest. A memorandum from the EMS County Supervisor and all information gathered will be sent to the Administrator, Program Development and Support, Central Office, Slot 1220.

4. Ownership Interest Held In Un-probated Estate

An individual's ownership interest in an un-probated estate is considered to be a resource. Ownership interest will be determined by dividing the equity value of the property by the number of heirs.

The costs of settling the estate including funeral expenses, payment of mortgages and other debts, attorney fees, etc. will be deducted from the value of the whole estate before determining the individual net interest. A knowledgeable source estimate of these costs will also be used in making this determination, if the actual costs are not known.

Once probate proceedings are initiated (must be verified), the property will be considered inaccessible until probate is completed.

5. Rights To Use

Mineral rights, timber rights, easements or leaseholds may all be countable resources if they have a cash value available to the individual on disposition. However, in many cases, none of the above are saleable and, therefore, would not be a countable resource.

2321 Determining Market Value and Net Equity

The market value of real property is determined by obtaining an estimate of current market value from a knowledgeable source. Knowledgeable sources include:

1. Real estate brokers.
2. Local office of the Farmer's Home Administration (for rural land).
3. Local office of the Agricultural Stabilization and Conservation Service (for rural land).
4. Banks, savings and loan associations, mortgage companies, and similar lending institutions.
5. County Agricultural Extension Service (for rural land).

The estimate must be written, signed and dated, and have enough information so the source can be identified.

The client will be primarily responsible for obtaining the estimate. However, if requested, the Service Representative will assist the client or attempt to obtain a free estimate. If an estimate cannot be obtained from any other knowledgeable source, then the assessed value from the tax assessor of the county in which the property is located, multiplied by the county multiplier, 5, will be used. If this method is used, the case record will be documented that no other knowledgeable source estimate could be obtained.

Only the net equity in the property will be considered. Net equity is determined by subtracting the value of any liens, mortgages, or other encumbrances from the market value. If the market value of the property exceeds the maximum limitation, the amount of any encumbrances will be verified.

When an individual owns excess real property with an equity value which, when combined with all other countable resources, exceeds the resource limit, such real property may be disregarded for a period of six months if the individual is making a good faith effort to dispose of the property. In addition, the individual must agree to repay any assistance he receives during the period to which he would not have been entitled had disposal of the property occurred at the beginning of the period. This provision applies only to excess real property. Personal property with an equity value in excess of the resource limit cannot be disregarded pending its disposal.

Prior to allowing the six-month disregard period, the individual must provide evidence of a good faith effort to sell the property. Acceptable types of evidence include a written statement from a realtor stating the property is currently listed for sale, current newspaper advertisements of the property, etc.

If the individual establishes that he is making a good faith effort to sell the property and he agrees to repay any overpaid assistance he may receive during the six month period, then Form EMS-731, Agreement to Sell Property, will be completed. Prior to the client signing the EMS-731, the Service Representative will explain fully the Conditions of Agreement paragraph. In addition, it will be explained that if the property is not sold within the six month period, then all payments the client received during the period will be considered overpayments subject to recovery. Recovery will not be made until the property is actually sold. However, the property will be considered a countable resource at the end of the six month period.

If the client signs the EMS-731, then the six month period will begin with the first payment month following the month in which the EMS-731 is signed. If the client does not sign the form, then assistance will be terminated or denied.

A copy of the completed and signed EMS-731 will be sent to Accounts Receivable, Overpayments Unit, Slot 3005.

The client will be advised that he must notify the county office within 5 working days of the date disposal of the property is completed. If the client has not notified the county office by the sixth month, the Service Representative will initiate action to close the case for the following month due to the excess property.

If the client notifies the County Office during the sixth month that a bona fide offer to buy the property has been made and the client has accepted such offer but completion of the sale will not actually be accomplished during the sixth month, then a three month extension may be granted. The bona fide offer and acceptance must be verified prior to allowing the extension. Acceptable verification will be either the Offer and Acceptance document or other written statement signed by both the client and the buyer which specifies the offer and acceptance.

If an extension is granted, the new expiration date for disposal will be indicated on the EMS-731. A copy of the EMS-731 with the new expiration date shown will be sent to Accounts Receivable, Overpayment Unit, Slot 3005 with a cover memorandum explaining that a three month extension has been granted. The client will be notified that he must notify the county office within 5 working days of the date the sale is completed.

When the client notifies the county office that the property has been sold, the Service Representative will obtain verification of the client's net proceeds from the sale. The net proceeds is the amount the client actually received from the sale after paying all costs related to the sale, e.g. loan pay-off, closing costs, realtor's commission, etc.

The repayment amount will be determined as follows:

1. Add the net proceeds amount to the amount of all other countable resources which were available at the beginning of the disregard period.
2. If the total resources (net proceeds plus other countable resources) are less than the resource limit, then the client was entitled to the benefits received during the period and no repayment is required. In this situation, Accounts Receivable, Overpayments Unit will be notified that the property has been sold but that repayment is not required.
3. If the total resources (net proceeds plus other countable resources) exceed the resource limit, then the repayment amount will equal the total grant amount paid during the period not to exceed the amount of net proceeds of the sale.

Example: The client received net proceeds of $700 from the sale of his property. At the beginning of the disregard period, he had other countable resources of $500. Therefore, his total resources amount is $1200. He received six AFDC checks during the disregard period of $242 each for a total of $1452. Since the total AFDC amount exceeds the net proceeds amount of $700, he will be required to repay $700.

Once the repayment amount has been determined, recovery will be initiated immediately. The client will be advised that repayment is required within 5 working days of the date the client receives the net proceeds. If the conditions of the sale are such that the client will receive his proceeds through installment payments, then the AFDC repayment may be made through installment payments. Otherwise, full repayment will be required.

Repayment will be made to the county office by cashier's check or money order payable to the Department of Human Services. The county office will transmit the payment to Accounts Receivable, Overpayments Unit, Slot 3005, with a copy of the EMS-731 and an explanatory memo attached. The memo must contain the following information: (1) the client's full name; (2) the 7 digit case number or SSN; (3) the total repayment amount; and (4) whether the transmitted payment is a full or installment payment. If repayment is made by installments, the memo will also include the number of months and the amount each installment will be. The EMS Supervisor or designee will be responsible for monitoring installment payments to insure that future payments are received.

If the client fails to make repayment or otherwise fails to comply with the repayment requirement, the county office will refer the case to the Office of Chief Counsel. The Accounts Receivable, Overpayments Unit will be notified by the county office of the referral.

Continuing eligibility following disposal of the excess property will be determined as follows:

1. Determine the total countable resources, including the net proceeds from the sale, which are currently available to the assistance unit.
2. Deduct the repayment amount from the total countable resources.
3. If the remainder is in excess of the resource limit, the unit is ineligible on a continuing basis. Action to close the case will be initiated.
4. If the remainder is less than the resource limit, the unit is eligible on a continuing basis provided repayment is made within 10 working days. If repayment is not made, then the case will be closed. The unit will remain ineligible until either repayment is made or the total resources amount, without regard to the repayment amount, is within the resource limit.

If the client does not dispose of the property during the disregard period, then all benefits paid during the period will be considered overpayments and will be subject to recovery once the property is actually sold. The overpayment amount will not be determined and the recovery process will not begin until that time.

The unit will be ineligible for continued assistance due to excess resources at the end of the disregard period. However, the client may rebut the determination of ineligibility if the reason for non-disposal is that there is no market for the property at the determined market value. The client's rebuttal must be substantiated by a knowledgeable source stating that the property either has no market value or has a current market value which would lower the client's equity to within the resource limit.

In addition, if during the disregard period the unit becomes AFDC ineligible for a reason other than the excess property, then all payments made during the period will be considered overpayments subject to recovery. The overpayment determination and recovery process will not begin until the property has been sold.

All such overpayments will be reported to the Overpayments Unit, Central Office via Form EMS-50. A copy of the EMS-731 will be attached to the EMS-50.

If a client cancels the agreement to sell the property or refuses a bona fide offer, all payments made during the period will be considered overpayments subject to recovery. The overpayment will be completed based on the fair market value determined at the beginning of the disregard period. The overpayment and recovery process will begin at the time of cancellation or refusal.

Personal property is property other than real property and consisting primarily of liquid assets. Ownership of personal property can be in the same form as real property. The following sections describe more commonly held types.

2330.1 Cash and Money on Deposit

Cash on hand includes amounts that the individual has on his person and amounts that he has at home. This amount, less any received during the month and counted as income, is a countable resource.

Money on deposit in a bank, savings and loan, credit union, or other financial institution must be considered a countable resource. Money on deposit includes checking accounts, savings accounts, certificates of deposit, Individual Retirement Accounts, etc.

Jointly Held Bank Accounts With Non-SSI Recipients

When an AFDC client has a bank account with a non-SSI person, ownership of the jointly held bank account must be determined prior to determining whether it is a resource to the client. This applies equally to all situations in which at least one of the persons named on the account, including the client's spouse, is a non-AFDC person whose resources would not be considered in determining eligibility. (If one of the persons named on the account is an SSI recipient, see the Section below.) A person is considered as the owner of funds in a bank account if that person earned, received, or was given the funds in the account.

As this relates to married couples, for AFDC purposes, it is normally presumed that both husband and wife are joint owners of funds in a jointly held bank account. However, this presumption does not preclude ownership by just one. When there is written documentation, clearly establishing that joint ownership is not intended, then ownership by just one will be determined to exist.

Ownership will be verified by written statements from the persons whose names are on the account, if at all possible, or if not, through collateral contacts. If it is determined that the AFDC client does not actually own the funds in the account, then none will be considered a resource to the client. If joint ownership does actually exist, then the amount considered to be owned by each of the joint owners will be a prorata amount rather than the full amount.

Example: Mr. and Mrs. Jones have a joint savings account with a balance of $1,500. Joint ownership does exist, so one half, or $750, will be considered to be owned by each one. Since Mr. Jones is the AFDC child's stepfather, his resources are not considered. Therefore, $750, Mrs. Jones' share, will be considered a countable resource in determining eligibility.

Jointly Held Bank Accounts With SSI Recipients

Any funds in a jointly held bank account which are being considered in determining an SSI recipient's eligibility cannot be considered in determining AFDC eligibility. This applies to all situations in which an AFDC client's name is on a bank account with an SSI recipient, including situations in which the SSI recipient is the AFDC client's child or spouse.

SSI policy presumes that all funds in a bank account which is jointly owned by an SSI recipient and another person belong to the SSI recipient. The SSI recipient may rebut this presumption if some or all of the funds belong to the other person. However, unless the SSI recipient successfully rebuts the presumption, then SSI will consider all of the funds in the account for SSI purposes. In that case, none of the funds can be considered for AFDC purposes even if the AFDC client's name is on the bank account.

When an AFDC client's name is on any type of bank account with an SSI recipient, it will be presumed that all of the funds in the account are being considered for SSI purposes. It will not be necessary to verify with SSI whether the bank account funds are being considered for SSI purposes unless the AFDC client advises that SSI is not considering all of the funds, or the amount in the account would appear to cause SSI ineligibility if considered. In either of those situations, the AFDC caseworker will verify with SSI whether the funds are being considered in determining the SSI recipient's eligibility. Any funds not being considered for SSI purposes will be subject to AFDC consideration as described in the above section. That is, if the AFDC client is the only other owner, then the funds not considered for SSI will be considered for AFDC. If, though, there are other owners besides the AFDC client and SSI recipient, then ownership and prorata shares will be determined.

Except in the above two situations, though, it will not be necessary to verify with SSI whether the bank account funds are being considered for SSI purposes. It will be presumed that they are being considered for SSI and therefore, will not be considered for AFDC eligibility purposes.

The total cash surrender value (CSV) of all life insurance policies, except those issued by a funeral home and considered as a funeral agreement, will be considered when determining the resources available to the assistance unit. The cash surrender value of any life insurance policy which is accessible to any of the persons whose resources must be considered will be included regardless of whether the insured person is a member of the assistance unit.

Tax refunds, excluding any portion due to the Earned Income Credit (EIC), are considered as a resource in the month of receipt. EIC refunds are disregarded as resources.

Joint Refunds (Client and Spouse)

When the client receives a joint tax refund with his/her spouse whose resources are not considered in determining eligibility (e.g. stepparent, SSI parent, spouse not living in the home, etc.), it must first be determined how the refund check is converted to available cash.

If the check is deposited in the client and spouse's joint bank account, then the client's pro rata share (one-half) will be considered a resource to the client. However, if the check is cashed, and the client receives all, a portion, or none of it, then the amount actually received will be considered a resource to the AFDC assistance unit.

A U.S. Savings Bond is an obligation of the Federal government which is nontransferable. These bonds are normally owned by the owner(s) shown on the front of the bond. If bond ownership is shared, each person's share as a resource is equal, even though any one of the owner's listed on the bond may dispose of it. Value determination should be secured by contact with a bank.

2330.5 Stocks and Bonds

Shares of stock represent ownership in a corporation. Stock value is determined by the closing price at the time of application or re-determination. Verification of stock value may be made by consulting the financial section of a newspaper for stock that is listed in either the New York or American stock exchange. For prices not listed on either exchange, that is "over the counter" the bid price is used to determine market value. If these bids are not listed in the newspaper, contact will be made with a local securities firm for verification.

Any other available property, including livestock not used for subsistence and farming or other self-employment tools and equipment which are no longer used to produce income, will be counted as a resource.

A transfer of property is the conveyance of right, title, or interest in real or personal property from one individual to another. Any transfer of full ownership, partial ownership, life estate, or partial life estate is a transfer of property.

If a person relinquishes his/her right to access a resource jointly owned by one or more persons, such relinquishment will not be considered a transfer of property provided (1) the person and the remaining owner(s) agree that the resource had never been intended for use by the person or the assistance unit and (2) the person had not, in fact, been accessing the resource in his/her own behalf or the assistance unit's behalf.

Arkansas Act 229 of 1951 specifies that assistance will not be granted to a family in which an individual has assigned or transferred real or personal property within the last five years for the purpose of rendering the family eligible for assistance. This provision applies equally to families applying for and receiving assistance.

For purposes of this section, the effective date of a transfer of real property will be considered to be the date the deed is recorded. It should be noted, however, that there may be situations in which the transfer actually occurred prior to the recording of the deed or in which the deed has not been recorded. In such situations, the case will be referred to the Office of Chief Counsel for a determination of the date of transfer.

A transfer of personal property occurs when the title is transferred, or if there is no title, as in the case of a bank account, when the individual no longer has access to the property. The casehead's statement as to the date of the transfer will be considered the effective date. If the County Office believes the casehead's statement is questionable, then verification of the date of transfer should be obtained.

If real or personal property has been transferred within the last five years, the reason for the transfer must be established. The casehead has the responsibility to provide accurate information regarding any such transfer.

A transfer of property will not be considered as having been made for the purpose of rendering the family eligible for assistance in the following situations:

1. The individual received full value for his equity in the transferred property.

The value of the property, the value given for it, and the amount of any liens or encumbrances on the property owed by the casehead must be clearly established. Cash or other monetary assets are considered to have been transferred for value if the assets were expended for living expenses, the purchase of clothing, appliances, or furniture, or any other expenditure which was for the benefit of the family.

2. The transfer was made by repossession, foreclosure, or other legal compulsion unless there is evidence that the individual voluntarily waived his right to his equity in the property for the purpose of becoming eligible for assistance.
3. The equity value of the transferred property, when considered with all other resources, would not have made the family ineligible if the property had been retained.
4. After having made a good faith effort to dispose of excess real property for its determined market value, the individual sold such property for less than that value because he had no higher bona fide offers.

If the transfer of property was made under conditions other than those described above, it is the casehead's responsibility to establish that the transfer was not for the purpose of becoming eligible for assistance.

Decisions to deny an application or to close a case due to an individual transferring property must be approved by the EMS County Supervisor or his/her designated representative.

A family in which an individual has assigned or transferred property for the purpose of becoming eligible for assistance will be ineligible for a specified period of time as described in this section. The period of ineligibility will be for such period of time as the transferred property, combined with all other countable resources, would have provided subsistence to the family.

The length of the period will be determined according to the following procedure:

1. Determine the total amount of countable resources available to the assistance unit, including the equity the individual had in the transferred property.
2. Determine the amount in excess of the resource limit by subtracting the allowable resource limit from the amount of total countable resources.
3. Determine the 100% standard of need for the assistance unit. For applications which are being denied due to a property transfer, the assistance unit will include the persons who would have been included if the application had been approved. Other eligibility requirements will be verified only if questionable.
4. Divide the amount in excess of the resource limit by the appropriate 100% standard of need for the assistance unit to arrive at the number of months for which the family will be ineligible. Fractions will be rounded up to the next whole number.
5. The period of ineligibility will begin with the month following the month in which the transfer occurred and continue for the number of months for which the family was determined to be ineligible up to a maximum of 60 months (5 years). Once a period of ineligibility has elapsed, the family may reapply and, if all other eligibility requirements are currently met, be certified for assistance without regard to the previously transferred property.

If an individual rendered ineligible by a property transfer so desires, he may be referred to the Office of Chief Counsel to determine if the property can be restored to him. If the property is restored to him within the established period of ineligibility and re-application for AFDC is made, then eligibility will be determined without regard to the previous transfer of property.

Income is classified as earned or unearned. Voluntary deductions from income are considered to have been received by the individual (e.g., Medicare premiums, credit union shares, etc.)

The following sources of income are not considered in determining eligibility or grant amount:

1. Home Energy Assistance Program (HEAP) payments.
2. The incentive for WORK Experience Worksite assignment and the $4.00 per day incentive for Job Club paid by Project SUCCESS.
3. Supplemental Security Income (SSI) benefits and other income of SSI recipients/eligibles (refer to FA 2382).
4. Assistance, including educational assistance, from other agencies and organizations to the extent that such payments are complementary to the assistance payment and therefore not a duplication of assistance. Such payments are considered nonduplicative and are disregarded if they meet any of the following conditions:

1. The payment from an agency or organization is for a different purpose than any item in the Standard of Need (e.g., educational costs.)
2. The payment from an agency or organization is for the provision of goods and services not included in the Standard of Need (e.g., money for special training for a child, moving expenses, etc.); or
3. The grant or payment from an agency or organization (though for an item included in the Standard of Need) supplements the Reduced Standard of Need up to the Full Standard. That portion of such grant or payment, if any, which exceeds the difference between the Full and Reduced Standards of Need shall be counted as income in the budget.

NOTE: Grants or payments (for items included in the Standard of Need) from agencies or organizations received directly by the applicant shall be counted in full in the pretest for earned income since the Full Standard of Need is utilized in the pretest budget. Also, such grants or payments received by a person whose income must be deemed to the assistance unit will be considered in full since the Full Standard of Need is utilized in the deeming procedure.

All or a portion of the payment may be disregarded under one or more of these disregards; e.g., part of the payment may be disregarded under Item A and another portion disregarded under Item C. Caution should be used when more than one disregard applies to ensure that the disregard under Item C is applied last.

Example: Ms. Smith receives AFDC for herself and one child. She also receives a $500 monthly payment from Rehab to cover monthly expenses related to training and to help meet her normal living expenses. The training expenses, e.g. supplies, transportation, etc., amount to $100/month. Therefore, $100 of the $500 payment is disregarded under Items a. and/or b. The remaining $400 is then available for normal living expenses and Item c. will be applied to it. Assuming Full and Reduced Standards of Need of $560 and $162 respectively, Item c. would be applied as follows: $560 - 162 = $398 which may be disregarded from the remaining $400. $400 - 398 = $2 to be included in the AFDC budget as unearned income.

5. a. Financial assistance provided to any undergraduate or graduate assistant for educational purposes made or insured under Title IV of the Higher Education Act except those under the Carl D. Perkins Vocational and Applied Technology Education Act, is considered as complementary assistance for an item not included in the Standard of Need and therefore, totally disregarded. Refer to #4 (a) above. Programs providing this assistance include:

1) Basic Education Opportunity Grant (BEOG or PELL)
2) Supplemental Educational Opportunity Grants (SEOG)
3) College Work Study
4) Supplemental State Income Grant (SSIG)

b. Educational assistance provided for attendance costs under programs in the Carl D. Perkins Vocational and Applied Technology Education Act will be disregarded. Any remaining assistance will be treated as complementary assistance under #4(c) above.

6. That portion of other educational grants or scholarships obtained and used by an individual under conditions which precludes its use for current living costs (monies for tuition, books, fees, special clothing or equipment, transportation to and from school, and child care if required in order for the applicant/recipient to attend class, etc.).
7. The Food Stamp bonus coupon allotment.
8. The value of U.S. Department of Agriculture Donated Foods.
9. Items of food produced and consumed by the applicant or other persons in the household.
10. Benefits received under Title VII, Nutrition Program for the Elderly, of the Older Americans Act of 1965, as amended.
11. Payments for supporting 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 under Titles II and III, pursuant to Section 418 of Public Law 93-113.
12. Payments to VISTA volunteers under Title I of Public Law 93-113, pursuant to Section 404 (g) of Public Law 93-113.

This income will not be disregarded if the Director of Action determines that the value of all such payments, adjusted to reflect the number of hours such volunteers are serving, is equivalent to or greater than the minimum wage then in effect under the Fair Labor Standards Act of 1938, or the minimum wage under the laws of the States where the volunteers are serving, whichever is greater. The County Office will be notified by the Central Office if any portion of these payments will be considered.

13. Any funds distributed per capita to or held in trust for members of any Indian tribe under Public Laws 92-254, 93-134, or 94-540.
14. The value of supplemental food stamp assistance received under the Child Nutrition Act of 1966, as amended, and the special food service program for children under the National School Lunch Act, as amended. (P. L. 92- 443 and P. L. 93-150)
15. Of payments made under the Alaska Native Claims Settlement Act, a maximum of $2000 per individual per calendar year.
16. Any payment received under Title II of the Uniform Relocation Assistance and Real Properties Acquisition Policies Act of 1970.
17. Experimental Housing Allowance 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.
18. Receipts distributed to members of certain Indian tribes which are from specific lands held in trust by the United States and are referred to in section 5 of Public Law 94-114 which became effective October 17, 1975. This disregard applies to receipts derived from lands of the following Indian tribes:
    

Tribe, Reservation, and State

1. Bad River Bank of the Lake Superior Tribe of Chippewa Indians of Wisconsin, Bad River, Wisconsin.
2. Blackfeet Tribe, Blackfeet, Montana.
3. Cherokee Nation of Oklahoma, Oklahoma.
4. Cheyenne River Sioux Tribe, Cheyenne River, South Dakota.
5. Lower Brule Sioux Tribe, Lower Brule, South Dakota.
6. Devil's Lake Sioux Tribe, Fort Totten, North Dakota.
7. Fort Belknap Indian Community, Fort Belknap, Montana.
8. Assiniboine and Sioux Tribes, Fort Peck, Montana.
9. Lac Courte Oreilles Band of Lake Superior Chippewa Indians, Lac Courte and Oreilles, Wisconsin.
10. Keweena Bay Indian Community, L'Anse, Michigan.
11. Minnesota Chippewa Tribe, White Earth, Minnesota.
12. Navajo Tribe, Navajo, New Mexico.
13. Oglala Sioux Tribe, Pine Ridge, South Dakota.
14. Rosebud Sioux Tribe, Rosebud, South Dakota.
15. Shoshone-Lannock Tribe Fort Hall, Idaho.
16. Standing Rock Sioux Tribe, Standing Rock, North and South Dakota.
17. Seminole Indians, Florida.
18. Pueblos of Zia and Jemez, New Mexico.
19. Stockbridge Munsee Indian Community, Wisconsin.
20. Burns Indian Colony, Oregon.
21. Crow Creek Sioux Tribe, Crow Creek, South Dakota.

19. Payments made directly to landlords and other vendors.
20. Small cash gifts made for a specific occasion (e.g. birthday, Christmas, graduation, etc.) provided the following conditions are met.

1. The amount given to an individual from any one source for any one specific occasion does not exceed $30. Example: A child receives for his birthday the following cash gifts: $10 from his uncle, $15 from his aunt, and $40 from his grandmother. The $10 and $15 gifts meet this condition since each one does not exceed $30. However since the $40 gift does exceed $30, it does not meet this condition and therefore, no portion of it may be disregarded as a small gift.
2. A maximum of $30 in gifts may be disregarded per individual per calendar quarter (i.e. January - March, April - June, July - September, and October - December). Any amount in excess of the $30 maximum must be included as unearned income. Example: For the calendar quarter of October - December, a child receives two $10 birthday gifts from different sources in October. Since each of these meet the $30 criteria, each one may be disregarded for a total gift disregard of $20. In December, the child receives a $15 Christmas gift. This gift also meets the $30 criteria and therefore, may be disregarded. However, $20 in gifts has already been disregarded in the quarter leaving only $10 of the quarter's maximum gift disregard ($30 - 20 = 10). Therefore, $10 of the $15 Christmas gift may be disregarded resulting in $5 to be included in the budget.

A gift which is intended for more than one member of the assistance unit will be divided among the members for whom it is intended and in the manner which results in the largest disregard. The client's statement that the gift was intended for more than one individual will be accepted. Example: A client with two children reports her mother gave her $100 as a Christmas present for herself and the children. This is the first gift received in the quarter by any of the members. If the $100 is divided equally among the members of the unit, the full $100 would have to be counted since each member's amount would exceed $30 ($100 - 3 = $33.33). However, if it is divided so that each child's amount is $30 and the client's amount is $40, then only the client's $40 would be counted since the disregard could be applied to each child's $30 gift.

21. Income tax refunds. That portion of a tax refund due to an Earned Income Credit is totally disregarded as income or resources. All other tax refunds are considered as a resource.
22. Funds distributed to members of the Red Lake Band of Chippewa Indian pursuant to Public Law 98-123, enacted October 13, 1983, and funds distributed to members of the Assiniboine Tribe of the Fort Belknap Indian Community and the Assiniboine Tribe of the Fort Peck Indian Reservation pursuant to Public Law 98-124, enacted October 13, 1983.
23. For purposes of determining eligibility, the first $50 of the total child support paid directly to the assistance unit and/or collected by the CSEU.
24. For purposes of determining grant amount, the first $50 of the total child support received in a month including refunds paid by the CSEU from collected support payments and direct support payments received and retained by the client. NOTE: Direct child support payments retained by the client are considered in determining the grant amount only for the initial payment month(s) prior to the date the assignment becomes effective (Refer to FA 2411) and when the sanction for non-cooperation with the CSEU has been imposed (Refer to FA 2247.2).
25. Child support refunds paid by the Child Support Enforcement Unit which represent several months of the $50 disregard (e.g. $150 refund for 3 past months of collections).
26. Payments made from the Agent Orange Settlement Fund or any other fund established pursuant to the settlement in the In Re Agent Orange product liability litigation retroactive to January 1, 1989.
27. Governmental (federal, state, or local) rent and housing subsidies, including payments made directly to the applicant/recipient for housing or utility costs, e.g. HUD utility allowances.
28. Payments made under the Radiation Exposure Act (Public Law 101-426) retroactive to October 15, 1990. These payments may be made to individuals in which injury or death resulted from the exposure to radiation from nuclear testing and uranium mining.
29. Payments made under the Civil Liberties Act of 1988 (Title I of Public Law 100-383) and under the Aleution and Pribilof Islands Restitution Act (Title II of Public Law 100-383) to Aleuts. These Acts provide for the federal government to make restitution payments to individuals or if deceased, the individual's spouse, children or parents, who were interned during World War II.

30. Bona fide loans from any source (e.g. bank, any other establishment engaged in the business of making loans, or an individual).

A loan is considered bona fide if it meets any of the following conditions.

1. There is a written agreement to repay the money within a specified time, or it was obtained from an individual or establishment engaged in the business of making loans, or
2. The borrower acknowledges the obligation to repay (with or without interest); or
3. The borrower expresses intent to repay either by pledging real or personal property or anticipated income. It is not necessary that the loan be secured solely by specific items of collateral such as real or personal property. It is only necessary that the borrower express the intent to repay the loan when funds become available in the future and indicate that repayment of the loan will begin when future anticipated income is received.

(NOTE: Interest earned on the proceeds of a loan will be counted as unearned income in the month of receipt.)

31. Payments made under the Maine Indian Claims Settlement Act of 1980. These payments are made to members of the Passamaquoddy Indian Tribe, the Penobscot Nation and the Houlton Band of Maliseet Indians for the settlement of land claims.
32. Payments made under the Aroostook Band of Micmacs Settlement Act. These payments are made to members of the Aroostook Band of Micmacs for the settlement of land claims.
33. A maximum of $2,000 per individual American Indian per calendar year of income derived from leases or other uses of individually-owned trust or restricted lands. (Any amount retained in the month following the month of receipt will be a resource.)
34. Major disaster and emergency payments made to individuals and families under the Disaster Relief Act of 1974 and comparable disaster assistance provided by States, local governments, and disaster assistance organizations.

1. *35.Section 4735 of the Balanced Budget Act of 1997 (Public Law 105-33) states that payments made from any fund established as a result of a class settlement in the case of Susan Walker vs. Bayer Corporation are not considered income in determining Medicaid eligibility. This case involved hemophiliacs who contracted the HIV virus from contaminated blood products. Also, payments made pursuant to a release of all claims in a case that is entered into in lieu of the Walker vs. Bayer class settlement and that is signed by all affected parties on or before the later of December 31, 1997, or 270 days after the date on which the release is first sent to the persons to whom the payment is to be made are not income in determining Medicaid eligibility.

NOTE: Any interest earned by these funds is countable unearned income in the month in which it is added to the account.

2351.1 Income Disregards of a Dependent Child

NOTE: The following disregards apply only to income received by a person under 18 years of age who is included in the AFDC grant as a dependent child.

1. Any unearned income received by a dependent child which is derived from a program carried out under the Job Training Partnership Act of 1982 (JTPA) Such income includes need-based payments, cash payments for supportive services such as transportation, child care, etc., payments made to participants in tryout employment in lieu of wages, and payments to Jobs Corps participants.
2. For a maximum of six months per calendar year, the earnings of a dependent child which are derived from a program carried out under the Job Training Partnership Act of 1982 (JTPA). Included under JTPA is the Summer Youth Employment Program. Once JTPA earnings have been disregarded for six months in a calendar year, then such earnings must be considered in determining eligibility for the remainder of the year and, unless the child is a student as defined in #4 below, in determining grant amount.
3. For a maximum of six months per calendar year, the non-JTPA related earnings of a dependent child who is a full-time student. Once the earnings have been disregarded for 6 months in a calendar year then such earnings will be considered according to Item #4 below. Any month in which the earnings would not affect the unit's eligibility if such earnings were considered will not be counted as one of the 6 disregard months.
   

The following income is considered in determining eligibility against the 185% income limit (See FA 2364) and earned income pretest (See FA 2365) but is disregarded in determining the grant amounts:

4. The earned income of a child who is:

1. A full-time student as defined by the school after such income has been disregarded for 6 months under Items #2 or #3 above, or
2. A part-time student but not a full-time employee (less than 30 hours per week)

A child planning to return to school in the fall is considered to be a full-time student during the summer vacation months. The term "student" includes participants in the Job Corps Program under the Job Training Partnership Act of 1982.

Earned income includes wages, salaries, tips, commissions, and any other payment, including in-kind earned income, resulting from labor or personal service.

Earned Income Credit (EIC) payments are totally disregarded as income or resources. This disregard applies equally to advance EIC payments which are paid with an employee's regular earnings and to EIC refunds received as lump sum payments.

In-kind Earned Income

In-kind earned income exists when a person is employed by an individual or business but is paid an in-kind benefit rather than wages (e.g. free rent, groceries, etc.). The value of the in-kind benefit will be considered gross earned income.