Determining eligibility. Asset restrictions.

(a) Definitions. As used in this section, the following terms shall have the following meanings, unless a provision expressly provides otherwise: (1) "Available asset" or "asset that is available" means any item of value that is actually available to a person or that such person has the legal right, authority or power to obtain or to have applied for such person's general or medical support; (2) "Beneficiary" means a person who is entitled to receive funds, property or other benefits from an insurance policy, will, trust, contract or settlement; (3) "Burial plot" means the contractual right to a grave site, opening and closing of a grave site, cremation urn, casket, outer burial container and a headstone or marker; (4) "Cash surrender value" means the amount of money the owner of a life insurance policy, annuity or similar instrument may obtain by surrendering such instrument; (5) "Corrective payment" means assistance paid to a person by the department as a refund or an adjustment for a previous underpayment of any cash, medical or other benefit provided by the department; (6) "Equity value" means an amount calculated by subtracting the amount of all encumbrances on an asset from the fair market value of such asset; (7) "Essential household item" means all furniture, furnishings and equipment found in or about a home that are used in connection with the operation, maintenance and occupancy of such home, and any other item used in the daily functions and activities of home or family life or for comfort or accommodation, but does not include items purchased as an investment to be sold for a profit in the future, such as, but not limited to, antiques, art or jewelry, other than a wedding or engagement ring; (8) "Fair market value" means an amount for which an asset would commonly be sold on the open market in the geographic area where such asset is located if the owner of such asset made a reasonable, bona fide effort to gain the highest possible price for such asset in an arm's-length transaction; (9) "Irrevocable burial fund" means funds held by a licensed funeral director pursuant to a contractual arrangement that authorizes the release of such funds for funeral arrangements only upon the death of the beneficiary of such contract, but that permits the transfer of such funds to another licensed funeral director; (10) "Legal owner" means the person who is legally entitled to enjoy the benefit and use of an asset and who is therefore treated as the person to whom an asset is considered available; (11) "Motor vehicle" means any vehicle propelled or drawn by any nonmuscular power that is intended and used for the transportation of persons or goods on public roads; (12) "Personal effect" means clothing, jewelry or any other item that is used for personal care or education; (13) "Record owner" means the person who has apparent ownership of an asset as verified by a title, registration or other documentation; and (14) "Settlor" means the person whose funds are used to establish a trust. (b) Asset limits. No person who belongs to a needs group consisting solely of such person shall be eligible for assistance pursuant to SAGA if the counted assets of such person's needs group exceed two hundred fifty dollars. No person who belongs to a needs group consisting of such person and his or her spouse shall be eligible for assistance pursuant to SAGA if the counted assets of such person's needs group exceed five hundred dollars. (c) Counted assets. Subject to the provisions of subsections (e) to (p), inclusive, of this section, the equity value of each available asset that is not excluded under subsection (d) of this section shall be included among the counted assets of such person and the needs group to which he or she belongs. An assistance unit member shall, as a condition of eligibility for assistance pursuant to SAGA, cooperate with the department in verifying all counted assets of the needs group to which he or she belongs, the equity value of such assets and any reduction in such assets. (d) Excluded assets. In addition to any other assets excluded pursuant to this section, the following assets shall be excluded from the counted assets of a person and the needs group to which he or she belongs if the circumstances concerning such asset are not in question or are verified by such person: (1) Any of the following forms of government assistance or payments, if such forms are maintained or can be identified separate from counted assets: (A) Any payment received under Title II of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended from time to time; (B) Any federally insured grant, loan or work-study payment intended for books, tuition, or fees that is made to an undergraduate student; (C) Any payment received as a volunteer under Title I of the Domestic Volunteer Service Act of 1973, Public Law 93-113, as amended from time to time; (D) Any supplemental food assistance received under the Child Nutrition Act of 1966, Public Law 89-642, as amended by Public Law 92-433, or assistance provided pursuant to the special food service program for children under the National School Lunch Act of 1946, Public Law 79-396, as amended by Public Law 93-150; (E) Any food received from a donation of a surplus commodity by the United States Department of Agriculture; (F) Any nutritional assistance provided pursuant to the Older Americans Act of 1965, as amended from time to time; (G) Any disaster assistance paid under the Disaster Relief Act of 1974, Public Law 93-288, as amended from time to time, including the individual and family grant program administered by the Federal Emergency Management Agency, and comparable disaster assistance provided by states, local governments and private organizations; or (H) Any payment received pursuant to a federal, state or local law that provides energy assistance; (2) Any essential household item; (3) Any personal effect; (4) Not more than one burial plot; (5) Irrevocable burial funds; (6) Real property that such person uses as his or her principal residence, including a house, trailer, camper or mobile home used by such person as a residence or an entire multi-family dwelling if it contains at least one unit occupied by such person as a principal residence, and any surrounding property and buildings or structures on such surrounding property if such principal residence and surrounding property are contiguous and not separated by intervening property owned by another person; (7) Any real property described in subdivision (6) of this subsection that is not currently used as a principal residence due to employment, training for future employment, illness or uninhabitability caused by a catastrophic event, provided such person intends to return to such real property and use it as his or her principal residence when possible; (8) Any real property not used by such person as his or her principal residence that, if treated as a counted asset, would result in such person's ineligibility for assistance, provided such property shall be excluded only if such person (A) signs a written agreement with a realtor to dispose of such property, (B) immediately lists such property for sale, (C) makes a bona fide effort to sell such property, (D) does not reject any offer that is approximately equal to the fair market value of such property, and (E) if such property is situated outside the state, grants the department a security mortgage on such property; (9) Any tangible business asset, other than land and buildings, including, but not limited to, equipment, supplies, inventory, cash on hand and accounts receivable, provided such business produces income sufficient to justify possession of such business asset; (10) Any asset, other than a tangible business asset, money, stocks, bonds or other similar liquid asset, that is essential to self-support, including any asset used for the sole purpose of producing items for such person's consumption, any item such person is required to own as a condition of his or her employment, including tools, equipment and uniforms; (11) Any life insurance policy, including, but not limited to, a term insurance policy, that provides temporary coverage and has no cash surrender value; (12) Any corrective payment for the month in which such payment is received and the ensuing month; (13) Any funds deposited into, held in, credited to or withdrawn from an individual development account for a purpose consistent with an approved plan, as defined in section 31-51ww of the Connecticut General Statutes; (14) Any portion of a lump sum payment that is paid to such person for the purpose of paying outstanding expenses incurred through no fault of such person, such as, but not limited to, settlement of outstanding medical bills or compensation for resources lost due to theft or a catastrophic event, provided such portion is maintained or can be identified separate from other funds; (15) Any amount received by a person as beneficiary of a life insurance policy if such person intends to and does use such amount to pay for the burial expenses of the deceased insured; (16) Any rental security deposit while held by a landlord, provided that such deposit shall be treated as a counted asset in the month that it is returned to such person; (17) Any asset included in a decedent's estate that is in probate court if: (A) The decedent's estate is undergoing administration; (B) Such person does not have the legal right to make use of such asset until the probate court completes its administration of the estate; (C) Such person takes reasonable steps to ensure that the administration of the decedent's estate is not unduly prolonged; and (D) Such person assigns his or her interest in such asset to the department; and (18) Any asset such person verifies cannot be converted to cash. (e) Determining ownership. (1) For purposes of applying the provisions of this section, the record owner of an asset shall be treated as its legal owner unless the record owner submits evidence to the department verifying that he or she is not the legal owner. Whenever evidence submitted by the record owner of an asset verifies that he or she is not the legal owner of such asset, and treating such asset as a counted asset would cause such person to be ineligible for assistance pursuant to SAGA, such person shall, as a condition of eligibility for assistance, transfer such asset to the legal owner and provide evidence to the department verifying such transfer. (2) Except as provided in subdivision (3) of this subsection, whenever an asset, including, but not limited to, a bank account, is jointly owned by two legal owners, one of whom is in a needs group and one of whom is outside such needs group, the full value of such asset shall be treated as a counted asset of such needs group, unless evidence is submitted to the department verifying that such needs group member is merely a record owner of all or a portion of such asset and the transfer provisions of subdivision (1) of this subsection are satisfied, in which case the department shall only include as a counted asset any portion of such asset that is legally owned by such needs group member. (3) When real property is jointly owned by two or more record owners, at least one of whom is in a needs group and at least one of whom is outside such needs group, and there is no dispute that such record owners are the legal owners of such real property, the department shall consider such real property to be shared equally on a pro-rata basis by such record owners, unless the deed for such real property specifies otherwise. (4) The insured shall be treated as the owner of any life insurance policy having a cash surrender value, unless such policy provides otherwise or the insurer verifies to the department that (A) a person other than the insured is entitled to cash in such policy and (B) the insured may not cash in such policy. (f) Bank accounts. Money received on a recurring basis that, in the month of receipt, is deposited into a bank account shall be treated as income in the month of receipt. Said money shall be treated as a counted asset, unless excluded pursuant to this section or subsection (d) of section 17b-198-9 of the Regulations of Connecticut State Agencies, each following month if retained, except that any income derived from an income tax refund, an earned income tax credit payment, the transfer or sale of personal or real property or the return of a security deposit or the liquidation of a counted asset shall be treated as a counted asset during the month it is received and deposited. (g) Money not deposited into bank account. Money received on a recurring basis by a person who is a member of a needs group shall be treated as counted income in the month of receipt, and as a counted asset, unless otherwise excluded pursuant to this section, each following month to the extent retained. (h) Borrowed money. Any borrowed money derived from a loan that is received in one lump sum shall be treated as a counted asset of the person receiving such lump sum and the needs group to which he or she belongs. Any borrowed money derived from a loan that is received in regular installments, including money derived from a reverse mortgage, shall be treated as income during the month in which it is received, but shall be treated as a counted asset each following month to the extent retained. (i) Stocks and bonds. The equity value of any share of stock or bond held by a person shall be treated as a counted asset of such person and the needs group to which he or she belongs. The equity value shall be the amount that such person will receive when he or she cashes such bond or would receive if he or she were to sell such stock. (j) Lump-sum payments. Any lump-sum payment shall be treated as a counted asset of the person receiving such payment and the needs group to which he or she belongs. For purposes of this subsection, "lump-sum payment" means a one-time payment of money that is not expected to recur and includes, but is not limited to, any of the following if received as a one-time payment: a settlement from a personal injury or property claim, money received pursuant to a claim under an insurance policy, lottery winnings, an earned income tax credit payment, a tax refund, an arrearage of child support and a retroactive benefit payment from unemployment compensation or the Social Security Administration. (k) Mortgage notes, loan documents and installment contracts. (1) Except as described in subdivision (2) of this subsection, the equity in any mortgage note, loan document, installment contract or similar financial instrument held by a person shall be treated as a counted asset of such person and the needs group to which he or she belongs if such person is entitled to sell or otherwise obtain the entire amount of equity in such instrument. (2) Whenever a person who holds a financial instrument described in subdivision (1) of this subsection believes that the equity in such instrument does not accurately reflect its fair market value, such person may submit evidence concerning the true fair market value of such instrument. If, in the department's judgment, the evidence submitted more accurately approximates the true value of such instrument, the department shall value such instrument accordingly. (l) Trusts. (1) Any trust payment received by or used to benefit the beneficiary of such trust shall be treated as the income of such beneficiary and the needs group to which he or she belongs in the month in which such payment is received or used, and as a counted asset of such beneficiary and needs group in each following month to the extent retained. (2) The corpus of a trust shall be treated as a counted asset of a person and the needs group to which he or she belongs if the terms of the trust permit such person to revoke the trust and receive the corpus of the trust upon revocation. (3) (A) With respect to a testamentary trust or an inter vivos trust that (i) was not established or funded by the beneficiary of such a trust or such beneficiary's spouse, and (ii) has terms that expressly entitle such beneficiary to receive distributions from the corpus of the trust for his or her general or medical support, the entire corpus or the maximum amount of the corpus that the trustee has authority or discretion to distribute for such beneficiary's general or medical support, if less than the entire corpus, shall be treated as a counted asset of such beneficiary and the needs group to which he or she belongs, regardless of whether the trustee actually makes the maximum allowable distribution. (B) If the terms of a trust described in subparagraph (A)(i) of this subdivision do not expressly entitle the beneficiary to receive distributions from the corpus of such trust for his or her general or medical support, the department shall treat the entire corpus or the maximum amount of the corpus that the trustee has authority or discretion to distribute to the beneficiary, if less than the entire corpus, as a counted asset if the department concludes that the trustee's failure to make the maximum allowable distribution constitutes an abuse of discretion. In making this determination, the department shall consider the following factors: (i) The clarity of the settlor's intention to provide for the general or medical support of such beneficiary; (ii) The degree of discretion afforded to the trustee under the terms of the trust; (iii) The value of the trust created, with a large value indicating that the settlor intended to provide for general or medical support for such beneficiary; and (iv) The history of expenditures from such trust prior to the filing of an application seeking assistance for the beneficiary. (4) When an assistance unit member residing in or admitted to a rated housing facility or a licensed residential care home, or such member's spouse, transfers assets to an irrevocable trust, such transfer shall be examined by the department to determine whether a penalty should be imposed under the provisions of subsection (f) of section 17b-198-5 of the Regulations of Connecticut State Agencies. (5) Notwithstanding any other provision of this subsection, whenever the department determines that a beneficiary of a trust is not receiving payments from a trust to which he or she is entitled, the portion of the trust to which he or she is entitled shall be treated as an excluded asset, provided such beneficiary cooperates with the department in attempting to obtain such portion of the trust, as described in subsection (e) of section 17b-198-6 of the Regulations of Connecticut State Agencies. (6) The provisions of this subsection shall apply to trusts and any other legal instrument similar to a trust, such as, but not limited to, an annuity. (m) Life insurance policies. The cash surrender value of any life insurance policy owned by a person who is a member of a needs group shall be treated as a counted asset of such person and the needs group to which he or she belongs. (n) Motor vehicles. (1) The department shall exclude (A) not more than four thousand five hundred dollars of the equity value of one motor vehicle per needs group, or (B) if such motor vehicle has been modified to enable operation by or transportation of any person with a disability who lives in a needs group member's household, the department shall exclude the entire equity value of such motor vehicle. (2) If the members of a needs group own multiple motor vehicles, the department shall apply the provisions of subdivision (1) of this subsection in a manner that provides the greatest exemption allowable. (3) For purposes of calculating the equity value of a motor vehicle, the fair market value of such vehicle shall be the average trade-in value for such vehicle, as listed in the National Automobile Dealers Association used car guide or, for older motor vehicle models, such association's appraisal guide. The department shall not increase the fair market value of any motor vehicle due to such vehicle being specially equipped with apparatus for persons with disabilities, the low mileage of such vehicle or any other factor. Any needs group member who disagrees with the fair market value adopted by the department may contest such fair market value by submitting to the department documentation from a reliable source that sets forth the actual fair market value of such vehicle. If the department is satisfied that such documentation more accurately approximates the true fair market value of such vehicle, the department shall use such fair market value to compute such vehicle's equity value. (o) Liquidation of asset. Any money received from the liquidation of an asset shall be treated as the counted asset of the person receiving such money and the needs group to which he or she belongs. (p) Effect of life use. (1) As used in this subsection "life use" means an alienable property interest in an asset that is measured by a life in being. (2) Except as described in subdivisions (3) and (4) of this subsection, any asset to which a person is entitled to life use shall be treated as a counted asset of such person and the needs group to which he or she belongs. Any proceeds received by such person for the sale of such an interest shall be treated as a counted asset of such person and the needs group to which he or she belongs for the month such sale takes place and each ensuing month to the extent such proceeds are retained. Any income collected from renting an asset to which a person is entitled to life use shall be treated as the counted income of such person in the month received and as a counted asset each following month to the extent retained. (3) If an asset described in subdivision (2) of this subsection is real property that such person (A) uses as his or her principal residence, or (B) is currently unable to use as his or her principal residence due to employment, training for future employment, illness or uninhabitability caused by a catastrophic event, but intends to use as his or her principal residence when possible, then such real property shall be treated as an excluded asset to the same extent that real property is excluded pursuant to subdivisions (6) and (7) of subsection (d) of this section. (4) If an asset described in subdivision (2) of this subsection is real property that such person previously used, but no longer uses, as his or her principal residence, such property shall be treated as an excluded asset during any month in which such person attempts to sell his or her interest in such property but is unable to sell such interest because he or she cannot find a willing and able buyer. (5) The department shall determine the equity value of a person's right to life use of an asset by considering: (A) Whether such person is a sole or joint owner of such interest; (B) The equity value of the asset; and (C) Such person's life expectancy based upon his or her age and gender. (q) Placement of lien on certain excluded real property. Whenever real property situated in Connecticut is excluded from the counted assets of a needs group or member thereof, the department shall place a lien on such property on the first day on which an assistance payment is made to any member of such needs group. (r) Period of ineligibility. A person whose application for assistance pursuant to SAGA is pending and who belongs to a needs group that owns assets in excess of the limits established under subsection (b) of this section shall remain ineligible for assistance until such assets are reduced below such limits. A person receiving assistance pursuant to SAGA who belongs to a needs group that acquires assets in excess of such limits shall become ineligible for assistance on the first day of the month following the month in which such assets are acquired, unless such assets are reduced below such limits prior to such time. No transfer of assets for less than their fair market value shall be considered a reduction in such assets unless the person making such transfer verifies that the transfer was made for a purpose other than establishing eligibility for assistance. The transfer of an asset by a resident of or person admitted to a rated housing facility or a licensed residential care home for less than fair market value for the purpose of establishing eligibility for assistance pursuant to SAGA may result in the imposition of a penalty under the provisions of subsection (f) of section 17b-198-5 of the Regulations of Connecticut State Agencies.