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

(Revised 1/1/08 ML #3120)

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IM 5054

 

 

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 and the penalty period is not finished (if the penalty period is finished and the applicant or recipient still owns the annuity, the annuity may be considered an available asset);

2. The annuity has been annuitized and constitutes an employee benefit annuity that cannot be surrendered; 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 $2610 effective January 2008 ($2541 for 2007).

3. 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 unless the annuity is considered a disqualifying transfer and the penalty period is not finished, or the annuity is a qualified employee benefit that cannot be surrendered. 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.

4. 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;

3. The annuity meets all of the requirements in (2)(c) above; or

4. The annuity is a third party annuity.

5. The uncompensated value of an annuity that is considered a disqualifying transfer is an amount equal to the remaining payments due from the annuity (or the applicant or recipient can show the outstanding principal amounts due, if that information can be attained).

6. The date of the disqualifying transfer is the date the payment option was selected on the annuity, or if later, the date the annuity was changed so the annuity could no longer be surrendered.