Annuities Purchased Before August 1, 2005 510-05-70-45-20

(Revised 1/1/07 ML #3056)

View Archives

 

 

  1. Any payment received from the annuity is income, regardless whether the annuity itself is countable as an asset or is considered a disqualifying transfer.
  2. An annuity in which a payment option was selected before August 1, 2005 is counted as an available asset in the asset test unless:
  1. The annuity must be considered a disqualifying transfer;
  2. The annuity constitutes an employee benefit that is an individual retirement annuity or is an annuity that was purchased with the proceeds from an individual retirement account (IRA), a Roth IRA, a simplified employee pension, an employer or employee association retirement account, or an employer simple retirement account, as described in section 408 of the Internal Revenue code of 1986 (These annuities are considered "qualified" annuities); or
  3. The annuity meets all of the following conditions:
  1. The annuity is irrevocable and cannot be assigned to another person;
  2. The issuing entity is an insurance company or other commercial company that sells annuities as part of the normal course of business;
  3. The annuity provides for level monthly payments;
  4. The annuity will return the full purchase price and interest within the purchaser's life expectancy; and
  5. Unless specifically ordered otherwise by a court of competent jurisdiction acting to increase the amount of spousal support paid on behalf of a community spouse by an institutionalized spouse or a home and community based services (HCBS) spouse, the monthly payments from the annuity do not exceed $2541 effective January 2007 ($2488 for 2006).
  1. An annuity purchased before August 1, 2005, but for which the payment option is selected from August 1 2005, through February 7, 2006, is counted as an available asset. State law considers any  annuity in which a payment option is selected on or after August 1, 2005, as assignable unless it meets the requirements in 05-70-45-25(2)(c). To meet those requirements, the annuity would have to have been purchased on or after August  1, 2005.
  2. The annuity is considered a disqualifying transfer unless:
  1. The payment option was selected prior to the individual's, or the individual’s spouse’s look back date;
  2. The annuity is a qualified employee benefit annuity, as described in (2)(b);
  3. The annuity meets all of the requirements in (2)(c) above; or
  4. The annuity is a third party annuity.
  1. The uncompensated value of an annuity that is considered a disqualifying transfer is an amount equal to the remaining payments due from the annuity.