SPED Income and Assets, SFN 820 525-05-60-20

(Revised 8/1/17 ML #3515)

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Purpose: In order for individuals to access the SPED program, information regarding assets, income, and deductions must be obtained in order to determine SPED program financial eligibility.

The SFN 820 must be completed (at a minimum) at the time of application and annually thereafter. If there is a significant change to the individual’s financial resources or documented deductions, a new SFN 820 must be completed and signed by the individual if the individual remains eligible for SPED program services.

If a question arises on how to count a particular asset or income that is not covered in this section the HCBS Program Administrator will consult with State Medicaid Eligibility staff for guidance. Medicaid financial eligibility criteria may be used to make decisions involving SPED eligibility not covered in policy.

The information obtained on the SFN 820 must correlate with the SAMS Income and Asset worksheet.

CLIENT INFORMATION – record the individual’s name, Client identification number, individual’s address, whether or not they are covered members of health insurance, and whether or not they are recipients of Medical Assistance (if they are QMB or SLMB only – do not record “yes”. Only record yes if they are receiving Medicaid State Plan medical and/or personal care services.

ASSETS

The total amount of funds held in any type of joint account is considered an available asset to the applicant/client unless the applicant/client can verify that the funds are, in fact, the sole possession of only one owner that has the generally recognized authority to direct disbursement. When the applicant/client claims that he/she is NOT in possession of the funds AND CANNOT direct their disbursement, substantiating documentation must be included in the case file. The applicant's/client's oral statement alone is not sufficient. This statement applies to all types of assets.

Just as the income of the spouse must be considered in completion of SFN 820 SPED Income and Asset form, all liquid assets of the spouse must be considered in determining SPED Program eligibility even if the applicant/spouse’s name is not on the statements or accounts. See N.D.C.C. 14-07. This applies also to applicants who have pre-nuptial or ante-nuptial agreements. The statutory obligation to support and care for a spouse is not negated by such agreements nor whether the spouse’s name is included on financial documents. However, you do not need to count the income or assets of the spouse if the applicant or recipient states that there has been a marital separation, with or without court order, and the spouses are currently living in separate households and have not separated for the purpose of securing HCBS benefits.


A1	Crop inventory: Non-contract crops held in storage at the discretion of the owner, who is the applicant/client, is considered a liquid asset for purposes of the SPED Program. However, crops being held for feed or for planting would not be included as an available asset. The cash value is based on the market price on the date of application or annual review.
A2	Cash – includes: Coins, currency, checking, savings accounts, money market accounts, and/or Certificates of Deposit. Include all accounts the individual has access. Any income or dividends received are reported as income, not in the asset section.
A3	Bonds – savings bonds, treasury bonds, others. Record the face value of the bond. The earnings are reported in the income section of this form.
A3	Mutual Funds - A type of mutual fund that allows investors to write checks against their account in established increments. The earnings are reported in the income section.
A3	Stocks – the current value of the stock is reported in the asset section, the dividends are reported in the income section.
A3	Trusts - All trusts must be submitted to Medical Services HCBS Program Administrator to coordinate review with the Legal Advisory Unit to determine how the trust will affect financial eligibility.
A4	Retirement programs: Earnings on retirement programs are tax deferred until taking payouts. At that time the income is reflected on their federal income tax form. If the individual will realize a penalty for an early withdrawal from the retirement account, the retirement account would be exempt.
A5	Residence other than Primary residence – individuals owning more than one residence, must report residence other than the primary residence as a liquid asset. If the individual owns more than one residence, the value of the other property, less the secured debt owed for the property, that is not the primary residence is counted in determining the financial eligibility. In order to obtain the value, you may use a recently completed appraisal, or verify documentation from the county assessor showing the assessed value. If this documentation cannot be obtained, the fair market value can be obtained by contacting real estate or lending institution personnel.
A6	Other Liquid Assets - The face value of loans that the applicant/client has made to others (money owed to the applicant/client) is also a liquid asset. Common loans are notes, and mortgages. Contracts for Deed and Limited Partnerships are excluded due to the difficulty of establishing a current market value for such instruments on the open market.
A7	Total Assets – if using the electronic (e-forms) SFN 820, the amounts entered for assets will automatically sum and be recorded on this line. If using the paper copy of the SFN 820, add the amounts from the asset types and record the sum on this line.
A8	Disqualifying transfers – If a current SPED client has transferred or assigned assets for the purpose of continuing to make themselves eligible for SPED services, or to reduce the amount of their service payment or if an applicant has transferred or assigned assets within five years of the date they initially applied for SPED to make themselves eligible for services check yes, this is considered a disqualifying transfer. If you check yes, please describe the nature of the disqualifying transfer.
A9	Money and assets in a North Dakota Achieving a Better Life Experience (ABLE) Plan are not considered for the purpose of determining eligibility in order to receive SPED services. Total annual contributions into an ABLE account may not exceed the federal gift tax limit of $14,000. ABLE accounts up to $100,000 do not affect asset limits for SPED financial eligibility.

Verifying Assets

The individual must provide their most recent federal income tax form 1040 AND the most recent monthly, quarterly or annual statement from the company(s) holding such liquid assets. If the individual does not make the documents available, eligibility cannot be established. Therefore, eligibility is denied or terminated. If the individual did not file a tax return for the previous year, other documentation must be obtained. Such documentation may include, but may not be limited to:

Bank statements,
Monthly/Quarterly/Annual financial statements from the investment/financial institution(s);
Employer reporting statements;
Contracts or other legal documentation

By reviewing these documents, the HCBS case manager can confirm the value of the liquid assets as well as the income derived from accounts or arrangements.

Exempt (Liquid) Resources

Excluded when calculating the value of the applicant's/client's resources are:

Cash surrender of life insurance policy(s).
Annuities or other pension plans IF a penalty would be imposed for withdrawal at the time of application or redetermination of eligibility. (e.g. There would be a penalty for withdrawal of funds from an IRA if the applicant/client is under 59 years.)
Any amount necessary for the fulfillment of a Plan for Achieving Self-Support (PASS) under Title XVI of the Social Security Act (SSI) will NOT be counted as an asset.
Contracts for deed or limited partnerships. Contracts for deed and limited partnerships are excluded due to the difficulty of establishing a current market value for such instruments on the open market.
Limited Partnerships.

Funds held or prepaid for funeral accounts cannot be deducted for the purposes of determining SPED eligibility.

Front Page

Asset Detail – record the Asset Type, Institution/Organization, Invoice/Statement Date, and Statement Amt or Balance. Examples:

Individual has $342 in checking, $200 in savings, $23 in cash, and $12,475 in a retirement account.


Asset Type	Instit/Organ	Invoice/St. Date	St. Amt or Balance
Cash	Smith Credit Union	July 8, 2005	$342, $200
Cash	On-hand		$23
Retirement Prog.	NP Railroad	July 1, 2005	$12,475

Back Page

Section 1, HOUSEHOLD INCOME SECTION

If the primary income comes from self-employment, or a combination of salaries and self-employment, add the monthly amounts from the income sources.

If a client has self employment income but does not have a tax return reflecting this income, disregard the first $65 of the monthly self employment income and one-half of the remaining self-employment income.

Some farmers report not having enough income to file federal income tax. Federal farm program payments are reported to IRS (Internal Revenue Service) on a 1099. Therefore, an IRS representative advises that farmers would file an IRS 1040 so that IRS knows why no tax was due for the year. The farmer or rancher may have a negative taxable income after personal exemptions and other deductions are made. The figure required on the SFN 820 is the “Adjusted Gross Income,” the last line on the first page of the IRS 1040; not the taxable income shown on the back. The farmer or rancher, as operator or as renter, must have federal tax forms.

For an applicant/client having rental farm property, the net income on IRS form 4835 is entered on the front page of the 1040. That is the amount reported on the SFN 820 divided by 12 months.

For the applicant/recipient reporting income or loss as operators of their farm or ranch, the amount is determined by use of IRS Schedule F. That is the amount entered on SFN 820 after dividing by 12 months.

If a family member is paying room and board for the recipient who resides in an Adult Foster Care home you do not need to count the amount of room and board paid as income if the payment is made directly to the provider. If the money is paid or deposited directly to the recipient it must be counted as income.

Payment from reverse mortgages is not counted if it is a type of reverse mortgage that needs to be repaid unless, the amount of the reverse mortgage results in a profit for the recipient and or the recipients spouse. If they receive a payment in excess of the value of the home it would be counted as income.

Income received by the recipient or the recipients spouse as the result of a community benefit, go fund me account etc. will be considered countable income unless the money is deposited in to an account that is managed by a 3rd party. Countable income may be calculated by dividing the total amount received /12 months to get a monthly average.

In addition to completed IRS tax forms, include the following:


B	Wages, Salaries – record the wages and salaries found from income tax documentation, federal tax form 1099, and/or federal tax form W2. If the individual does not file taxes or has limited wages or salaries and tax documentation is not required, copies of checks or receipts may be used.
B3	Veterans Benefits – include all benefits including Aid & Attendance unless counting Aid and Attendance as income will have a negative effect on an individual’s eligibility for SPED. In that case, you can deduct the amount of Aid and Attendance the individual receives from the amount of SPED services being authorized. If a veteran is unsure of the amount of Aid and Attendance payment included in their veteran’s pension, contact the county veteran’s office to obtain the information.
B4	Social Security, SSI, Disability Income
B5	Dividends, Interest – found from financial accounts from financial institutions or could include interest paid to the applicant/client from a loan or sale of property/goods.
B6	Estates, Trusts, Net Rentals, Royalties
B7	Pensions, Annuities
B8	Temporary Aid for Needy Families
B9	County General Assistance
B12/B13	Self-Employment Income
B2/B10/B11/B14	Combine alimony/child support/unemployment compensation/Workers Compensation/ and other

Disregards to Income

Compensation or stipends received by volunteers participating in Experience Works (formerly known as the Green Thumb project) or Senior Companion;
Income earned or unearned by dependent children;
Income earned of adult children caring for parent(s);
The family home care payment if the spouse is the family home care provider;
The conversion of one asset form to another form may not be considered income.

Example 1: A house is sold for cash. The cash would not be considered income but would be considered additional liquid assets.

Example 2: Cash is converted to a CD. The CD is considered as a liquid asset, but now the interest generated from the CD would be income. If a client has made the choice to reinvest the interest by having the interest increase the value of the CD or saving account, the interest is to be considered as income in the month in which the client could have accessed the dividend or interest.

Any amount of funds held in a restricted or unrestricted IIM account.

Section 2: DEDUCTIONS TO INCOME

Deduct the following monthly expenses to determine the family adjusted gross monthly income:


C1	Child Support Payment For Child(ren) Not Claimed As Dependent(s)
C2	Medical Deductions, a medical deduction of up to $700 for a family or $350 for an individual is allowable for any medical/accident insurance paid by the individual AND any regular payment (out of pocket) for medical expenses. Medical expenses do not include prescription drugs. If the individual is a recipient of Medicaid or Economic Assistance programs, the information has already been verified and is on file with the Eligibility Specialist. In these cases, the case manager can cross reference those files.

Child Support Payment For Child(ren) Not Claimed As Dependent(s)

Medical Deductions, a medical deduction of up to $700 for a family or $350 for an individual is allowable for any medical/accident insurance paid by the individual AND any regular payment (out of pocket) for medical expenses. Medical expenses do not include prescription drugs. If the individual is a recipient of Medicaid or Economic Assistance programs, the information has already been verified and is on file with the Eligibility Specialist. In these cases, the case manager can cross reference those files.

Medical expenses include, but are not limited to, the following items, which must be paid for either in part or full by the client:

Health/accident insurance: insurance premium, Medicare Part B payment, coinsurance, and deductibles on health plans.
Medical services by a licensed medical facility or professional
Supplies for incontinence (e.g. Depends, Chux, et cetera)
Adaptive Devices such as wheelchairs, crutches, eyewear
Medical Transportation costs: bus, taxi, train, or plane fares; actual care expenses such as gas and oil or 50 cents a mile; and parking fees and tolls.
Long term care premiums
Private pay personal care services (would not include SPED service fee).


C3	Child Care Expenses paid Because Of Employment
C4	Alimony (Paid)
C5	Prescription Drugs -- For out of pocket prescription drugs deductions, the drugs must be verified and the information recorded in the Deduction Detail section (unless can cross reference with eligibility specialist).

Upon completion of the document, the client will sign signifying they have provided the county with all information required to meet SPED financial eligibility. The individual should not sign the document until the verification process has been completed.

The For Office Use Only section is for case managers to assess the client service fees based on the sliding fee schedules, sign, date, and designate documentation is on file in the County office.

Also in this section, the case manager will record the "Number of Individuals" in the household. This number should only contain those persons counted in the official household count.

The form, SFN 820, is not available from the Department. County social service boards are required to make sufficient copies for their use. The form is available electronically through the state e-forms system and is available through SAMS financial assessment.

Overpayment

If there are credible allegations that an individual or their legal representative concealed or misrepresented financial or functional information with the purpose of obtaining eligibility for HCBS, the Department may recoup the overpayment.