Transfer of Property for Cash and Basic Food

Revised May 11, 2017

Purpose:

This category describes how to compute the period of disqualification when a client transfers property to qualify for cash and food assistance benefits and when the disqualification may shorten for cash assistance programs.

WAC 388-488-0005 Transfer of property to qualify for cash assistance. 

WAC 388-488-0010 Transfer of property to qualify for food assistance. 


Clarifying Information - WAC 388-488-0005 

  1. Adequate consideration exists when the reasonable value of the goods or services received in exchange for the transferred property is equal to the value of the property transferred.
  2. The market value of the transferred item acts as the guide to the value.
  3. Acceptable reasons a client may transfer property for less than its market value include, but not limited to:
    1. They were a victim of fraud, misrepresentation or coercion.  (Note:  The client must attempt and continue to attempt to recover the property or its equivalent value in these situations.)
    2. They weren’t receiving cash assistance and didn’t plan using assistance at the time of the transfer.
    3. They transferred the property to a spouse because of a divorce or legal separation settlement approved by or ordered by a court.
    4. They held the title only as a trustee for the use and benefit of another person and the client did not have beneficial interest.
    5. The transfer was to clear title to the property in which the client didn’t have beneficial enforceable interest.
    6. They show the transfer wouldn’t affect their eligibility for benefits if they retained the property.
    7. The child(ren) in the assistance unit transferred their income or resources, up to $4,000, into an irrevocable educational trust, designated for that child's future educational use.
    8. Their attorney suggested the client accept the amount to finalize the settlement.
    9. They have little or no business knowledge or experience.
    10. They had to move to accept employment/training or retain a cohesive family unit.

 

Worker Responsibilities - WAC 388-488-0005 

  1. Determine the number of disqualifying months for the assistance unit if the client's explanation is unacceptable.  To calculate the number of disqualification months:
    1. Determine the uncompensated value of the transferred property. The uncompensated value is equal to the value of the transferred property minus:
      1. Encumbrances (amount owed); and
      2. The amount received.
    2. Determine the state median income for a family of the same size as the assistance unit for the month and year they transferred the property. Adjust the state median income for those months the assistance unit size changed.
    3. Divide the uncompensated value of the transferred property by the state gross median income and round down the result to obtain the number of full months in the disqualification period. If the result is less than one month, there is no disqualification period.
  2. Document the calculation of disqualification months in ACES 3G.

See the State Median Income Chart for more information.

 

EXAMPLE

A client and her child received TANF on 9-1-97. The client owned a second home when she first received assistance but never declared it to the department. The client paid $30,000 for the home and owed $20,000 on the mortgage.

On 12-20-97 the department discovers the client owned the home and proposes a 12-31-97 termination.

The client responds by 12-30-97 and provides evidence that she quit-claimed the home to her sister, free and clear, on 11-30-97. The sister make all future mortgage payments on the home. The quick-sale value of the home on 11-30-97 was $40,000.

Result: The client gave the home to her sister to maintain eligibility for benefits.

  • Determine the Uncompensated Value

    In this example; the reasonable value of the transferred home is $40,000, minus the encumbrances, $20,000, and minus the amount the client received, $0. The transferred property’s uncompensated value is $20,000.

  • Determine the State Gross Median Income

    For a two-person assistance unit, the state gross median income was $2,801 in 1997.

  • Determine the Number of Months in the Disqualification Period

    Divide the uncompensated value of the transferred home, $20,000, by the state gross median income of $2,801 for 12-97. This equals’ 7.14. Round 7.14 down to 7. The disqualification period in this example lasts 7 months.

  • Determine the Beginning and Ending Month of the Disqualification Period.

    This disqualification period starts 12-1-97 and ends 7 months later on 6-30-98 because this client was a recipient at the time of the transfer.

    If the client had applied for benefits on 12-2-97 and told the department she transferred the home on 11/30/97, the disqualification period would begin on 11-1-97.  The assistance unit would be ineligible for 7 months, through 5-31-98.

  • Determine if an Overpayment Exists
    1. If a recipient transfers a non-exempt resource that would make the recipient ineligible for cash assistance, establish an overpayment for the period of time the client received assistance while owning the resource.
    2. If the client received cash assistance after transferring the resource, establish an overpayment for assistance received during the disqualification period.

    In the example above, the client was ineligible for benefits from 9-1-97 through 11-30-97 due to excess resources and for the month of 12-97, as 12-97 was a disqualification month.


Clarifying Information - WAC 388-488-0010

  1. Reasons that substantiate intent of transfer was not to qualify for food assistance:
    1. See 3.  "Acceptable reasons"under Clarifying Information for WAC 388-488-0005.
  2. Examples of resources that do not affect eligibility include, but are not limited to:
    1. Excluded resources; and
    2. Resources with a value, in addition to the household's other countable resources, which is below the assistance unit's resource limit.
  3. A recipient's period of disqualification begins the first month after the advance notice period expires.  See LETTERS
  4. Clients that were categorically eligible (CE) for food assistance benefits due to receipt of cash assistance benefits remain CE for those months.  If  a transfer of property makes a client ineligible for cash assistance in a previous month the CE status is not affected.

 

Worker Responsibilities - WAC 388-488-0010

  1. When a property transfer has been discovered, determine the date of transfer.
  2. Assess whether the transfer occurred to qualify or remain eligible for benefits.
  3. Give the client the opportunity to respond by sending a V01G or a V04G if the evidence provided appears to substantiate a transfer to qualify for benefits, or more information is needed to make a determination.  See LETTERS
  4. After the response has been received, determine whether the client had a valid reason to accept less than the Fair Market Value of the resource.
  5. Document the transfer of property and any disqualification on the Remarks screen.
Example

On 3/26/98 a single parent and child apply and are interviewed for TANF and food assistance.  The client owns a second car discovered by the department at the time of the interview.  There are no encumbrances on the second vehicle.  The FMV of the car is $10,000 and the department denies the application because the client is over the resource limit.

The next day the client responds by selling the car to her brother for $6,000 and reports this change to the department.  The client requests a review of her application.  At this point, the department establishes a period of disqualification.  For applicants, the period of disqualification starts during the month of transfer (March).

The State Median Income for a two-person household in 1998 is $2,849.  Thus $2,849 is the NUNCL for the client.

Divide the uncompensated value of the transferred property by the monthly NUNCL.  $4,000 / $2,849 = 1.404 months.

Round down to obtain the number of full months in the period of disqualification.  Round 1.404 down to 1.  The period of disqualification will last one month and will from March 26 to March 31.

Look at eligibility for the months of April and May.

Because the client is still an applicant, determine whether the client's remaining countable resource ($6,000) is within the cash and food assistance resource limits.

If the applicant's remaining resources are over the resource limits, deny the application, and take no further action on the property transfer.

If the applicant's remaining resources are under the limits, continue with the transfer of property assessment.

Example

A single parent and child and a child approved for TANF and food assistance on 6/2/97.

During the eligibility review recertification on 5/15/98 the department discovers that the client owns a second car and has owned the car since the date of application. The FMV of the car is $10,000. There are no encumbrances on the second car.

On 5/20/98 the client responds to the worker inquiry by selling the car to his sister for $6,000. The client admits to the department that he sold the car to remain eligible for assistance.

At this point, the department establishes a period of disqualification. For a recipient, it is the 1st of the month following the date of transfer.

The state median income for a two-person household in 1998 is $2,849. Thus, $2,849 is the NUNCL for the client.

Divide the uncompensated value of the transferred property by the monthly NUNCL. $4,000 / $2,849 = 1.404 months.

Round down to obtain the number of full months in the period of ineligibility.  Round 1.404 down to 1.  The period of ineligibility will be from June 1 through June 30.

If the client sold the car for $8,000 then the uncompensated value would be $2,000. $2,000 / $2,849 = .702 months. The period of ineligibility is less than one month. There is no period of ineligibility for the transfer of property. However, the $8,000 should be considered a nonexempt resource and applied toward the resource ceiling for all programs when determining eligibility.

Regardless of whether a period of ineligibility is established or is not, reconstruct eligibility and determine if the second car made household resource ineligible. If so, establish the overpayment during the period cash assistance was received.  See FRAUD and BENEFIT ERRORS.


ACES Procedures

See Resources - Resource Transfer

See Interview - (TRAN) Transfer of Resources Screen

Top of Page