TN 15 (02-12)

A. Policy for spend-down of cash

1. Spend-down which results in fair market value (FMV)

Spending-down cash can be a valid transfer of resources. Generally, when an individual purchases items or pays for services on the open market, he or she receives fair market value in return for the cash. The period of ineligibility does not apply to an individual who spends down cash resources and gets fair market value in return.

2. Spend-down which does not result in FMV

Giving away cash can be a valid transfer, but the transferor does not get fair market value in return. Using cash to buy something for another person is also a valid transfer, but the transferor does not get FMV in return. The period of ineligibility for transferring a resource for less than FMV may apply in these situations unless one of the exceptions in SI 01150.121 through SI 01150.125 applies.

B. Procedure for abbreviated development when financial institution records are received via e4641 or eAFI

In most cases, you must use the e4641 (electronic Authorization for the Social Security Administration to Obtain Account Records From A Financial Institution and Request) or eAFI (electronic Access to Financial Institutions) systems to verify financial account balances for the current month and the preceding 25 months. For additional instructions, see procedures in SI 01140.206D.

For initial claims, you must verify the financial account balances for up to 25-months prior to the filing date. Therefore, we routinely receive financial account data that precedes the filing date in initial claims. When we examine financial account records from 2 years prior to the Supplemental Security Income (SSI) application, we would expect to see the spend-down of cash from existing accounts to meet ordinary monthly expenses.

Use the following procedures to determine whether you can abbreviate development when we identify a spend-down of cash via e4641 or eAFI.

1. Initial claims and post-eligibility cases with Access to Financial Institutions (AFI) involvement

a. Consider the case facts

Examine the first of the month balances for all months included in the response from the financial institution. Determine whether the monthly balances show relatively consistent decreases. If the monthly balances appear to reflect a spend-down of cash, consider the individual’s financial circumstances. For example:

• Did the individual (or spouse) experience a loss or reduction of income during the period when the bank account balance began to drop?

• Was the individual (or spouse) responsible for paying household costs during the spend-down period (e.g. mortgage, rent, food, or other household costs)? Or, on the other hand, was the individual living in the household of another person and did not contribute to the household expenses?

• Did the individual (or spouse) have dependents in the household who did not have income of their own (e.g. minor children)?

b. When to abbreviate development

Abbreviate development of the spend-down and assume that the individual received FMV from the spend-down if his or her financial circumstances indicate that the spend-down appears reasonable and there is no evidence to the contrary in file.

c. When to follow the procedures for full development

Follow the procedures for full development in SI 01150.007C, in this section, if the spend-down is not explained by the individual’s (or spouse’s) financial circumstances or you have reason to believe that he or she did not receive FMV for a transaction.

IMPORTANT: Always follow the procedures for full development if the individual (or spouse) alleges that he or she transferred resources by spend-down and did not receive FMV.

2. How to document an abbreviated development determination

After following the procedures in SI 01150.007B.1. (in this section), document on an SSA-5002 (Report of Contact) or MSSICS Report of Contact (DROC) screen, that you considered the spend-down of cash and determined that the assumption in SI 01150.007B.1.b. (in this section) applies. On the same SSA-5002 or DROC screen, also document the beginning month of the spend-down period and the ending month of the spend-down period.

C. Procedure for full development when the case does not qualify for abbreviated development or the individual alleges a spend-down of cash

In order to determine whether the spend-down was a transfer of resources and fair market value was received in return, use the following procedures when:

• the procedures for abbreviated development do not apply; or,

• an individual alleges spend-down of cash not held in a financial institution.

If you determine that, a spend-down of cash may result in a period of ineligibility:

• Obtain the individual's statement either signed or recorded on a DROC (an application derived report of contact) to document how the individual spent the cash.

• Obtain available evidence to support the allegation if the allegation is questionable (e.g., sales receipts for purchases, bank statements showing withdrawals, etc.)

• Document your determination on the Property/Cash Given or Sold (RGIV) page, the DROC screen, or an SSA-5002 as appropriate.

• Document if an eligible individual is over the resource limit in any month(s) of the review period and alleges spending sufficient cash to fall below the resource limit. You must obtain evidence to support his or her allegation.

NOTE: An individual may not be able to provide an exact “to the penny” accounting for purchases. Therefore, the claims representative (CR) should accept any reasonable accounting. In addition, an individual may allege an expenditure that he or she cannot corroborate. Exercise great care in resolving the issue of transfer by spend-down before determining that the individual is ineligible due to excess resources or is subject to a period of ineligibility due to a transfer for less than fair market value.

D. Examples of allegation of cash spend-down.

Example 1- Allegation acceptable

During her redetermination, Ms. Barrett submitted bank records showing resources over the $2,000 limit for 03/10 and 04/10 followed by a $750 withdrawal in 05/10 that brought her total resources below the limit. Ms. Barrett provides a statement that she used $150 for utility bills, $170 for a dentist bill, $300 for car repairs, and $130 for plumbing repairs. Assuming there is no conflicting information in the file, there is no need to request receipts to verify these allegations.

Example 2 - Allegation questionable

Mr. Jones filed for SSI on 06/05/09 and he alleged liquid resources of $1,800 on 06/01/09. Mr. Jones alleged that he spent about $3,000 from savings in 05/09 just prior to filing for SSI. He said that he spent $2000 for a new furnace and spent the rest on a series of small purchases. Prior to spending this money, Mr. Jones was over the SSI resource limit. At the time of the interview, Mr. Jones could not explain how and when he spent the additional $1,000. Since he could not provide a reasonable accounting of how he spent the funds, his allegation is questionable. The CR requests additional evidence to support Mr. Jones' allegation of spend-down before making a determination.

Example 3 - Abbreviated development in AFI based determination

Ms. Fox filed for SSI on 10/01/11 and alleged the only resource she had was a checking account with a balance of $1400. The financial account information received via eAFI revealed that she had $6,000 in that account 7 months prior to her application and her monthly bank balances show a steady decline. The CR considers the information on the application, which shows a mortgage of $1000 a month, the spouse reports no income, and two minor children in the household who have no income. Based on these factors derived from the application and the financial account information, the CR determines that Ms. Fox spent the money to pay the family’s monthly bills. The CR has no cause to question the spend-down and curtails any development. The CR documents his decision on a DROC. Ms Fox received FMV for her cash spend-down, and therefore, no transfer of resource penalty exists.

E. References

SI 01150.005 Determining Fair Market Value

SI 01150.110 Period of Ineligibility for Transfers on or After 12-14-99