N.M. Code R. § 8.139.510.10

Current through Register Vol. 35, No. 11, June 11, 2024

Section 8.139.510.10 - EXCLUSIONS

A. In determining the resources of a household, the following shall be excluded:

(1) home and surrounding property (Subsection C of 8.139.510.10 NMAC);

(2) household and personal goods (Subsection D of 8.139.510.10 NMAC);

(3) life insurance, deferred compensation and joint pension funds (Subsection D of 8.139.510.10 NMAC);

(4) all retirement accounts with federal tax-preferred status from the food stamp asset test as well as any tax-preferred retirement accounts that congress creates in the future;

(5) all tax-preferred education accounts, such as 529s;

(6) income-producing property (Subsection E of 8.139.510.10 NMAC);

(7) work-related equipment (Subsection F of 8.139.510.10 NMAC);

(8) inaccessible resources (Subsection G of 8.139.510.10 NMAC);

(9) resources excluded by federal law (8.139.527 NMAC);

(10) resources of non-household members (Subsection F of 8.139.510.8 NMAC);

(11) other exempt resources, such as those of an SSI or Title IV-A recipient;

(12) excluded monies kept in a separate account and not commingled with non-excluded funds; when commingled, the excluded monies retain their exclusion for a period of six months from the date they are commingled.

(13) vehicles: the entire value of a vehicle owned by a household member shall be excluded as a countable resource as set forth at Subsection E of 8.139.510.9 NMAC.

B. Exceptions:

(1) Educational loans and grants of students, commingled with non-excluded funds, retain the exemption for the period over which they are intended to be used.

(2) Operating funds of a self-employment enterprise commingled with non-excluded funds retain the exemption for the period over which they have been prorated as income.

C. Home and surrounding property: A household's home, and surrounding property which is not separated from the home by intervening property owned by others, shall be excluded. Public rights of way, such as roads that run through the surrounding property and separate it from the home, do not affect the exemption of the property. The home and surrounding property remain exempt when temporarily unoccupied for reasons of employment, training for future employment, illness, or uninhabitability caused by casualty or natural disaster, if the household intends to return. No specific time limit is imposed in determining that the absence is temporary. A household that currently does not own a home, but owns or is purchasing a lot on which it intends to build, or is building a permanent home, receives an exclusion for the value of the lot, and, if partially completed, for the home.

If part of the land surrounding a home is rented, the land retains this exclusion and the income-producing test in Subsection E of 8.139.510.10 NMAC does not apply. Any income received from renting part of the surrounding property shall be counted in determining income eligibility and food stamp benefit amount.

D. Personal effects:

(1) Households goods, livestock, and personal effects, including one burial plot per household member, and the cash value of life insurance policies shall be excluded. Any amount that can be withdrawn from a prepaid burial plan shall be counted as a resource and cannot be excluded under this provision.

(2) The cash value of pension plans or pension funds shall be excluded.

(3) IRAs and Keogh plans involving no contractual relationship with individuals who are not household members are not excluded.

E. Income-producing property:

(1) Exclusions: The following income-producing property shall be excluded:

(a) Property which annually produces income consistent with its fair market value, even if used on a seasonal basis. Such property includes rental and vacation homes. If the property cannot produce income consistent with its fair market value because of circumstances beyond the household's control, the exclusion remains in effect.

(b) Property, such as farm land, which is essential to the employment or self-employment of a household member. Property essential to the self-employment of a household member engaged in farming continues to be excluded for one year from the date that the household member ends self-employment farming.

(c) An installment contract for the sale of land or a building that is producing income consistent with its fair market value. The value of the property sold under an installment contract or held as security in exchange for the purchase price consistent with the fair market value of that property is also excluded. The value of personal property sold on installment contracts such as boats, automobiles, etc. is also treated in this manner as long as the property sold on contract is not part of a self-employment enterprise.

(2) Determining fair market value: The following guidelines shall be used to determine fair market value:

(a) If it is questionable that property is producing income consistent with its fair market value, the caseworker shall contact local realtors, tax assessors, the small business administration, farmer's home administration or other similar sources to determine the prevailing rate of return. If it is determined that property is not producing income consistent with its fair market value, such property is counted as a resource. If property is leased for a return that is comparable to that on other property in the area leased for similar purposes, it is considered income producing consistent with its fair market value and is not counted as a resource.

(b) Property exempt as essential to employment need not be producing income consistent with its fair market value. For example, the land of a farmer is essential to the farmer's employment; therefore, a good or bad crop year does not affect the exemption of such property as a resource.

F. Work-related equipment exclusion: Work-related equipment, such as the tools of a trades-person or the machinery of a farmer, which are essential to the employment or self-employment of a household member are excluded. The tools of a trades-person are excluded, and remain exempt, if the trades-person becomes disabled. Farm machinery retains this exclusion for one year if the farmer ends self-employment.

G. Inaccessible resources: Resources shall be excluded if their cash value is not accessible to the household, such as, but not limited to:

(1) security deposits on rental property or utilities;

(2) property in probate: when a decision is rendered by the court explaining how the property is to be divided, the property is no longer in probate, whether or not the household signs papers;

(3) real property that the household is making a good faith effort to sell at a reasonable price and which has not been sold; and

(4) irrevocable trust funds: any funds in a trust, or transferred to a trust, and the income produced by that trust to the extent it is not available to the household, is considered inaccessible to the household if:

(a) the trust arrangement is not likely to cease during the certification period and no household member has the power to revoke the trust arrangement or change the name of the beneficiary during the certification period;

(b) the trustee administering the funds is:

(i) a court;

(ii) an institution, corporation, or organization not under the direction or ownership of any household member;

(iii) an individual appointed by the court with court-imposed limitations placed on the use of the funds;

(c) the trust investments made on behalf of the trust do not directly involve or assist any business or corporation under the control, direction, or influence of a household member; and

(d) the funds held in an irrevocable trust are either:

(i) established from the household's own funds, if the trustee uses the funds solely to make investments on behalf of the trust, or to pay the educational or medical expenses of any person named by the household creating the trust; or

(ii) established from non-household funds by a non-household-member.

(5) Insignificant return: Any resource, that as a practical matter, the household is unable to sell for any significant return because the household's interest is relatively slight or because the cost of selling the household's interest would be relatively great.

(a) A resource shall be so identified if its sale or other disposition is unlikely to produce any significant amount of funds for the support of the household.

(b) This provision does not apply to financial instruments such as stocks, bonds, and negotiable financial instruments, nor to vehicles.

(c) The caseworker may require verification of the value of a resource to be considered inaccessible if the information provided by the household is questionable.

(d) The following definitions shall be used in determining whether a resource may be excluded under this provision:

(i) "significant return" is any return, after estimated costs of sale or disposition, and taking into account the ownership interest of the household, that is estimated to be one half or more of the applicable resource limit for the household;

(ii) "any significant amount of funds" are funds amounting to one-half or more of the applicable resource limit for the household.

H. Joint property:

(1) Joint resources: Resources owned jointly by separate households shall be considered available in their entirety to each household, unless it can be demonstrated by an applicant household that such resources are inaccessible to it. The household must verify that:

(a) it does not have the use of the resource;

(b) it did not make the purchase or down payment;

(c) it does not make the continuing loan payments, and

(d) the title is transferred to or retained by the other household;

(e) if a household can demonstrate that it has access to only a part of the resource, the value of that part is counted toward the household's resource level; a resource shall be considered totally inaccessible, if it cannot be practically subdivided and the household's access to the value of the resource is dependent on the agreement of a joint owner who refuses to comply; for purposes of this provision, ineligible aliens or disqualified individuals residing with a household are considered household members.

(2) Joint bank accounts: If signatories to a joint bank account are separate households, the funds in the account are considered available to each household to the extent that it has contributed to the account. If the participating household has not contributed to the account, the funds are considered available only if there is clear and convincing evidence that the other household intends that the participating household actually own the funds.

I. Residents of shelters for battered women and children: Resources shall be considered inaccessible to individuals residing in shelters for battered women and children if:

(1) resources are jointly owned by shelter residents and members of their former household, and

(2) shelter resident's access to the value of the resource(s) is dependent on the agreement of a joint owner residing in the former household.

J. Other exempt resources:

(1) Earmarked resources: Government payments designated for the restoration of a home damaged in a disaster shall be excluded, if the household is subject to a legal sanction if the funds are not used as intended. However government payments designed to bring homes "up to code" are not exempt and are counted as a resource.

(2) Prorated income: Resources, such as those of students or self-employed individuals which have been prorated as income, shall be excluded.

(3) Indian lands: Indian land held jointly by a participating household and the tribe, or land that can be sold only with the approval of the department of interior's bureau of Indian affairs, shall be excluded.

(4) Business loan collateral: Non liquid assets against which a lien has been placed as a result of taking out a business loan, when the household is prohibited by the security or loan agreement with the lien holder (creditor) from selling the assets, shall be excluded.

(5) Property for vehicle maintenance and use: Property, real or personal, is excluded to the extent that it is directly related to the maintenance or use of a vehicle excluded under Paragraph (1) of Subsection E of 8.139.510.9 NMAC. Only that part of real property determined necessary for actual maintenance or use is excludable under this provision.

(6) Title IV-A/SSI recipients: The resource of any household member who receives:

(a) supplemental security income (SSI) benefits under Title XVI of the Social Security Act; or

(b) aid to the aged, blind, or disabled under Titles I, X, XIV, or XVI of the Social Security Act; or

(c) benefits under part A of Title IV of the Social Security Act shall be considered exempt for food stamp purposes provided resources are also considered exempt under the applicable titles or parts of the Social Security Act.

N.M. Code R. § 8.139.510.10

02/01/95, 10/01/95, 02/01/96, 10/01/96, 07/01/97, 06/01/99; 8.139.510.10 NMAC - Rn, 8 NMAC 3.FSP513, 5/15/2001; A, 2/1/2002; A/E, 10/15/2008