Adult Medicaid Manual MA-2230 FINANCIAL RESOURCES

VIII. PERSONAL PROPERTY ASSETS

Personal property consists of an individual’s personal effects, household goods, motor vehicles and other property which is not classified as real property (e.g. mobile home, motor home, boat, etc.).

REISSUED 11/01/11 – CHANGE NO. 17-11

(VIII.)

A. Non-Countable Personal Property Excluded From Countable Resources

Do not count as an available resource:

1. Personal effects and household goods

Includes all clothing, jewelry, furniture, appliances, artwork and other decorative items, etc.

NOTE: Assets that are inventory of a discontinued business are a countable resource. These resources are not the personal property of the a/r.

2. Mobile home/motor home used as the home site

Exclude the principal residence, regardless of location.

3. Motor Vehicles used for transportation

a. Vehicle Exclusion

Exclude only one motor vehicle if the a/r lives:

(1) At home and the motor vehicle is used for transportation of the eligible a/r and/or a person living in the home with the a/r.

(2) In a nursing facility and the motor vehicle is used to transport the a/r, a community spouse or a dependent/disabled child.

Assume the motor vehicle is used for transportation unless there is evidence to the contrary. Evidence that may be used to show the vehicle is not used for transportation is that the vehicle is unlicensed or an individual cannot travel by car but must be transported by ambulance.

If there is doubt as to the use of the vehicle, obtain a statement regarding how the vehicle is used for transportation for the individual. For example, for a vehicle owned by an individual in a nursing facility to be excluded, it would have to be used to transport the applicant/recipient, a community spouse or a dependent/disabled child. Obtain a statement from the person who has the vehicle that the vehicle is used to transport the a/r, community spouse or dependent/disabled child and the nature of the transportation. If the statement appears questionable, count the vehicle as a resource.

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(VIII.A.3.)

b. Applying the Exclusion When More Than One Automobile That is Used for Transportation is Owned

Apply the exclusion in the manner most advantageous to the individual. If the eligible a/r owns more than one automobile used for transportation of the eligible a/r or a member of the eligible a/r’s household, the total exclusion applies to the automobile with the greater equity value.

Count the equity value of any automobile, other than the one excluded, as a resource when it is owned by an eligible a/r. See VIII.D.3. to determine the equity value.

c. Reduction of Resources

When the equity value of an unlicensed vehicle causes the a/r to be over the reserve limit and that vehicle then becomes licensed, evaluate for reduction of reserve. Reduction of resources occurs on the day a vehicle becomes licensed. Reduction of resources does not go back to the date of application.

4. Property Excluded Due to Usage

a. Business Property

Exclude personal property used in the operation of a trade or business, self-employment enterprise, or farm regardless of equity value or whether there is a net profit. Refer to VII.A.5.b.for further instructions to exclude business property.

(1) Property includes operating capital and fixed assets of the business such as equipment, livestock, vehicles, etc.

(2) Liquid assets – Exclude liquid assets of the business if not co-mingled with personal funds.

(3) Active involvement – The a/r or financially responsible person must be actively involved in the business on a day to day basis.

b. Income Producing Property

Exclude up to $6,000 in non-business, income producing personal property which meets the 6% net annual income test criteria in Item IX.

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(VIII.A.4.)

c. Property Which Produces Goods or Services for Home Consumption

Exclude up to $6,000 in total combined equity of all non-business personal and real property used to produce goods and services solely for home

consumption (i.e. a tractor and garden used to produce vegetables for home consumption).

d. If the property is not currently in use for one of the reasons for exclusion in a., b., or c. above, exclude it if:

(1) It has been in use within 12 months, and

(2) It will resume within 12 months.

B. Countable Personal Property

Count as an available resource property not otherwise excluded.

Count the value of property such as boats, motors, campers, trailers, farm and garden equipment, equipment from a discontinued business, mobile home, motor home, houseboat, unlicensed vehicle, etc. as an available resource if it cannot be excluded per VIII.A. above:

1. Based on usage

2. As the home site, or

3. As an essential vehicle.

C. Verify Ownership of Personal Property

1. Interview

During the interview, question the a/r about personal property. Use the Resource Interview Guide, located at, http://www.ncdhhs.gov/dma/county/medicaidtraining.htm. Accept the client’s statement of ownership unless questionable. Verify ownership if questionable.

2. Vehicle Licensed by DMV:

a. Primary verification source is DOT/DMV computer inquiry into vehicle valuation system.

(1) Check full names of all financially responsible adult members.

(2) The owner of a vehicle is the person whose name is on the title unless the parties involved can establish that a legally binding agreement/resulting trust exist. Refer to Item V. for information on resulting trusts/legally binding agreements.

REISSUED 11/01/11 – CHANGE NO. 17-11

(VIII.C.2.)

b. Alternative sources of verification of ownership to be used if ownership is questionable include:

(1) County tax records

(2) Vehicle registration

(3) Vehicle title

(4) Insurance policy on vehicle

(5) Records of firm that financed the purchase

(6) Evidence of a legally binding agreement such as records that indicate who has been making payments or maintaining insurance coverage on the vehicle.

3. Personal property valued by tax office and not licensed by DMV:

a. Accept as verification the a/r’s verbal statement of ownership.

b. Check full names of all financially responsible adult case members against county tax records.

c. List all items of personal property owned by the a/r and financially responsible spouse/parents.

D. Calculate and Establish the Value of Countable Personal Property

If the personal property cannot be excluded,

1. Verify the current market value:

a. Through Vehicle Valuation Inquiry (VVI) if licensed and valued by DMV.

b. Through the county tax office if valued by the tax office and not licensed by DMV.

c. Use the NADA book or internet site www.nadaguides.com for unlicensed vehicles not registered in the tax office. If the unlicensed vehicle is older than those listed, use the last value given in NADA. All vehicles licensed or unlicensed have a value.

2. Verify encumbrances (amount owed on a car loan) by either the written or verbal statement of the loan holder. Ask for the payoff as of the first day of the verification month, rather than the sum of the remaining payments; i.e., future interest payments are not an encumbrance.

REVISED 11/01/11 – CHANGE NO. 17-11

(VIII.D.)

3. Equity value is current market value minus encumbrances.

Subtract the payoff amount from Current Market Value. Current Market Value (CMV) is established by VVI or a/r’s rebuttal.

4. For all personal property, the amount of equity counted in resources is the total equity value of all countable personal property.

5. Rebuttal

If the a/r has excess resources, and owns non-exempt personal property, the a/r has the right to rebut the value of personal property by establishing a lesser value. It is the tax value that is rebutted, not equity or encumbrances. Follow procedures in E. below.

E. Rebuttal Procedures

The a/r has the right to rebut the equity value of any type of personal property counted in total countable resources. When the tax/DMV value of an excess motor vehicle or the equity value of any other personal property e.g., boats, trailers, unlicensed vehicles, campers, etc., results in excess resources:

1. Send the DMA-5157, Notice of Total Countable Resources; The Right to Rebut Value, to the a/r to be completed and signed by the a/r and returned by the deadline date. File the completed and signed form in the Medicaid case record.

2. Explain that the a/r has the right to disagree with (rebut) that value, and provide a signed and dated statement from a car dealer or dealer of item in question that verifies:

a. Make, model, year, color and general description of the vehicle/personal property, and

b. Market value of the vehicle/personal property (what it could reasonably be sold for, not what he would offer on a trade-in).

c. For applications, notification must be made on a DMA-5097, Request for Information (or DMA-5097S). Put information under “other”. For redeterminations or change in situation also use the DMA-5097/DMA-5097S, Request for Information.

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(VIII.E.2.c.)

EXAMPLE: “We have verified the value of your motor vehicle at $700 through the Department of Motor Vehicles. This $700 counts toward your resource limit of $2,000. If you disagree with the $700 value, you must provide a written statement from a car dealer, which shows the make, model, year, color, general description and value of the car. Statement must be received by (date).”

3. Notify a/r immediately if it becomes apparent during application or review process that the value will not result in ineligibility and verification of lesser value is no longer needed.

4. If a/r disagrees with the DMV/tax/CMV:

a. Applications

See MA-2303, Verification Requirements for Applications and MA-2304 Processing the Application, for processing time frames and requirements for rebuttal.

b. Redeterminations

Allow a recipient twelve calendar days to provide evidence. If at the end of the twelve calendar days, evidence has not been provided, send a timely notice proposing termination.

5. Proceed with denial of application or termination using the DMV/tax/CMV if a/r:

a. Fails or refuses to provide rebuttal evidence by deadline; or

b. Fails to respond at all to notification of assigned value; or

c. Agrees with the assigned value.

6. Document in the eligibility record:

a. Date and how the a/r was contacted about value of the personal property; and

b. A/R’s response and the date he responded. If no response, indicate this also.

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(VIII.E.)

7. File a copy of the appraisal/verification of rebutted value from the dealer in the case record.

8. When the tax/CMV of personal property has been successfully rebutted, do not re-verify the rebuttal value at redetermination unless the DMV/tax/CMV has increased, or there is some indication of a change in the value of the property.