Tenn. Comp. R. & Regs. 1240-01-04-.05

Current through October 22, 2024

Section 1240-01-04-.05 - EXEMPT RESOURCES

In determining the resources of an HH/AG, only the following shall be exempt:

(1) Home and Lot.

(a) Food Stamps Only. The home and surrounding property which is not separated from the home by intervening property owned by others is exempt. Public right of way, such as roads which run through the surrounding property and separate it from the home, will not affect the exemption of the property. The home and surrounding property, (regardless of location), shall 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. If the household does not already own a home, the value of a lot purchased to build a home on is excluded. If the new home is partially completed, the value of it is excluded.

(b) AFDC Only. The home owned or being purchased and occupied by the AFDC aid group and the property surrounding the home which is not separated from the home by intervening property owned by others is exempt. Public rights of way (such as roads and/or other public easements) which run through the property surrounding the home do not affect its classification as homestead property. Temporary absences from the home do not affect the classification and/or exemption of the home if the aid group has not acquired another home and intends to return to the exempted home at a specified time. Proceeds from the sale of homestead property or from a recovery due to a casualty/disaster loss of same, will remain exempt for three months following receipt of said proceeds if the Aid Group expresses an intent to reinvest in the same homestead or in a substitute homestead.

(2) Other Property - AFDC Only.

(a) Basic Maintenance Items. Excluded are basic maintenance items essential to daily living such as clothing, furniture, appliances, and other similar essential household goods and equipment of limited value.

(b) Certain Real Property. Real property which is not exempted as a homestead pursuant to 1240-01-04-.05(1)(b) is exempt as a resource if the recipient is making a good faith effort to sell and signs an agreement to repay the AFDC grant received during the period of exemption. Exemption of the property, not to exceed nine (9) months, causes an overpayment except when the net proceeds plus other resources at the beginning of the exclusion period are within the resource limit.

Repayment of the grant is made from the sale proceeds not to exceed the total of the net proceeds. Any proceeds remaining after repayment of the grant is considered as a resource.

If assistance is terminated for any reason prior to the end of the nine-month exemption period, the assistance unit has an overpayment subject to the usual collection procedures.

(c) Burial Plots. One burial plot for each family member may be excluded from consideration as a resource.

(3) Household Goods and Personal Effects-Food Stamps Only. the value of household goods and personal effects, including one burial plot per household member per ineligible alien or disqualified household member.

(4) Insurance Policies - Food Stamps Only. Cash value of life insurance policies shall not be considered in determining eligibility or benefit level.

(5) Exempt Vehicles

(a) Food Stamps Only. See rule 1240-01-04-.10 regarding exempt vehicles.

(b) AFDC Only. One licensed and operable family motor vehicle in which the equity value is $1,500 or less. Equity is determined by deducting the amount of encumbrances from the fair market value. Fair market value is the value listed in the N.A.D.A. Used Car Guide. If a vehicle is not listed in the N.A.D.A., or if its value is claimed to be different from the value listed, its value may be taken as that stated by one reputable automobile dealer.

(6) Burial Policies, Burial Agreements, and Burial Plots. These shall be considered exempt for resource purposes.

(7) Pension Funds. The cash value of pension plans or funds shall be exempt. (Food Stamps Only): Excludes any funds in a plan, contract, or account described in sections 401(a), 403(a), 403(b), 408, 408A, 457(b), and 501(c)(18) of the Internal Revenue Code of 1986 and the value of funds in a Federal Thrift Savings Plan as provided for in 5 U.S.C. 8439. Also the exclusion of any successor retirement accounts that are exempt from Federal taxes.

(8) Income Producing Property - Food Stamps Only

(a) Income producing property is defined as:

1. Property which annually produces income consistent with the prevailing rate of return for similar property in the area, even if only used on a seasonal basis;

2. Property such as farm land and rental homes (except certain vacation homes) which is essential to the employment or the self-employment of an HH member;

3. Rental homes (including unattached trailers or mobile homes not being used as the homeplace) which are used by the HH for vacation purposes at some time during the year but which annually produce income consistent with the prevailing rate of return for similar property in the area, if not income producing, the equity value is counted;

4. Work related equipment, such as the tools of a tradesman or the machinery of a farmer, which is essential to the employment or self-employment of an HH member; and

5. Installment contracts for the sale of land or building if the contract or agreement is producing income consistent with the prevailing rate of return. The exclusion shall also apply to the value of the property sold under contract or held as security in exchange for a purchase price consistent with the selling price of similar property in the area.

(b) Determining prevailing rate of return:

1. When it is necessary to determine if property is producing income consistent with other similar property in the area, the worker may contact local realtors, county trustee's office, the Small Business Administration, Farmer's Home Administration, or similar sources to determine the prevailing rate of return in the area.

2. If the property is not producing income consistent with similar property in the area, such property would be counted as a resource.

3. Property exempt as essential to employment need not be producing income consistent with its fair market value.

(9) Inaccessible Resources - Food Stamps/AFDC. The cash value of resources which are not currently accessible to the aid group or which cannot reasonably be brought to a condition of current availability are exempted. Nonavailability of such resources must be determined prior to approval and at each redetermination of eligibility. Also, in both programs, resources whose cash value is not accessible to the HH are exempt, such as, but not limited to: Security deposits on rental property or utilities; Property in probate; Real property which the HH is making a good faith effort to sell at a reasonable price and which has not been sold; and jointly owned resources determined to be inaccessible. In both programs, the worker may verify that the property is for sale and that the household has not declined a reasonable offer. Verification may be obtained through a collateral contact or documentation, such as an advertisement or public sale in a newspaper of general circulation or a listing with a real estate broker.

(a) Irrevocable Trust Funds

1. Food Stamps Only

(i) Any funds in a trust or transferred to a trust, and the income produced by the trust to the extent it is not available to the household shall be considered inaccessible to the household if:

(I) 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;

(II) 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

(III) The funds held in irrevocable trusts 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; and the trustee administering the funds is either:

A. A court, or an institution, corporation, or organization which is not under the direction or ownership of any household member;

B. An individual appointed by the court who has court imposed limitations placed on his/her use of the funds which meet the requirements of the provisions above.

(ii) Reserved for future use

2. AFDC Only

(i) When a person applying for or receiving AFDC has a trust which is claimed as inaccessible, he/she (or in the case of a child, his/her parent or other relative caring for him/her) will have 60 days from the date of application/redetermination or from the time the trust is reported/discovered to attempt to have this resource made currently available. The following are exceptions:

(I) If the trust is established by a will, the terms of the trust will be followed as they stand.

(II) If a trust is producing regular income which is available to the beneficiary, the body of the trust will not be considered a currently available resource, but the income will be counted in the determination of eligibility/amount of payment.

(ii) As a condition of eligibility, the grantee/relative must be willing to seek to have the trust made currently available within 60 days. Failure to do so renders the grantee/relative ineligible to be included as a member of the aid group.

(iii) If the person has followed through, assistance may be continued pending further orders of the court. The court's decision, as written in a new or amended order, will be binding. If all or part of the funds in trust are made available at any time, they must be taken into account when received.

(b) Prepaid Burial Agreements or Burial Trusts.

1. Food Stamps Only. Prepaid burial agreements are a form of trust fund, and as such, their availability depends on whether they are revocable or irrevocable. Any "pre-need" burial agreement purchased 7/01/81 or later is excluded as a resource if the contract contains the following statement on its face:

"This contract is irrevocable and the funds paid hereunder are not nonrefundable."

In addition, contracts established before 7/02/81, which were previously required to be revocable under state law, may be exempted if a chancery, circuit, probate, or general sessions court declares them to be irrevocable. Verification of the court's declaration must be obtained.

2. AFDC Only. Exclude one burial agreement with equity value of $1500 or less (whether revocable or irrevocable) per family member as a resource.

(c) Equipment - AFDC Only. Equipment used in a self-employment enterprise used to produce income is considered as inaccessible resource.

(d) Food Stamps Only - Non-liquid assets against which a lien or security agreement has been placed for a business loan are considered inaccessible. Such assets are excludable only when the lien or security agreement with the creditor specifically prohibits the household from selling the asset(s).

(10) Resources Excluded by Law. The following types of payments are excluded by law from considerations as income or as resources in the determination of eligibility/level of benefit:

(a) Food Stamps and AFDC.

1. Relocation Assistance Payments. Relocation payments received under Title II of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 are excluded.

2. Alaska Native Claims Payments and Sac and Fox Indian Claim Payments. Payments received under the Alaska Native Claims Settlement Act, PL 92-203, §21 (a) and the Sac and Fox Indian Claims Agreement PL 94-189 are excluded.

3. Payments for Certain Indian Tribes. Payments derived from certain submarginal lands of the United States which are held in trust for certain Indian Tribes are excluded.

4. Jobs Training and Partnership Act. Payments received pursuant to the Jobs Training and Partnership Act (JTPA).

5. Payments from Disposition of Funds of Ottawa Indians. Payments made to the Grande River of Ottawa Indians under PL 94-540 are excluded.

6. Payments Under Title IV of the Higher Education Act.

Federal assistance provided by a program funded in whole or in part under Title IV of the Higher Education Act is excluded. Such payments include, but are not limited to, Pell grants, Supplemental Education Opportunity (SEOG) grants, the PLUS Program grants, the National Direct Student Loans (NDSL), the Byrd Honor Scholarships, and college work study funds.

7. Energy Assistance Payments.

(i) Food Stamps Only. Any payments made under federal law for the purpose of energy assistance are not counted. To be excluded, the payments must be clearly designated as energy assistance by the entity providing the funds. Payments for the purpose of energy assistance made through State and/or local funding are counted.

(ii) AFDC Only. Any payments or allowances made by any federal, state or local organization for the purpose of energy assistance are not counted.

(b) Food Stamps Only.

1. HUD retroactive tax and utility cost subside payments issued pursuant to settlement of Underwood vs. Harris (Civil No. 78-0469 D.D.C.) against HUD for the month in which payment was received and for the following month.

2. Payments of relocation assistance to member(s) of the Navajo and Hopi Indian Tribes under PL 93-531.

3. Benefits from Food Programs. The following benefits from food programs are excluded:

(i) WIC

(ii) Value of food stamps

(iii) Value of school lunches or other school fund programs

(c) AFDC Only

1. Domestic Volunteer Service Act. Payments received by volunteers for services performed in programs stipulated in the Domestic Volunteer Service Act of 1973 as amended are excluded.

2. Payments from Crisis Intervention Program. One-time payments to assist with utility costs from the Crisis Intervention Program are excluded.

(11) Benefits from Food Programs - AFDC Only

(a) WIC

(b) Value of food stamps

(c) Value of school lunches or other school food programs

(12) Resources of Non-Household Members - Food Stamps Only. The resources belonging to non-household members are excluded from consideration except for the following excluded household members:

(a) Ineligible Aliens/Individuals with Questionable Citizenship. Individuals who do not meet the citizenship or eligible alien status. The resources of these individuals shall be counted in their entirety to the remaining household members.

(b) SSN Disqualified. Individuals disqualified from participation in the program for failure to provide or apply for an SSN. The resources of these individuals shall be counted in their entirety to the remaining household members.

(c) Intentional Program Violation Disqualified. The resources of these individuals shall continue to count in their entirety to the remaining household members.

(13) Resources of Non-AG Members - Cash Assistance and Food Stamps. Resources of individuals disqualified because of an intentional program violation or an employment and training program sanction are counted in their entirety to the remaining AG members.

(14) Agent Orange Settlement Payments - Cash Assistance and Food Stamps. Agent Orange settlement payments are excluded as income and resources for both programs. Lump sum payments received by survivors of deceased veterans are also excluded.

(15) Allowances paid to children of Vietnam veterans born with Spina Bifida are excluded as resources in the Food Stamp and Cash Assistance programs.

(16) Individual Development Accounts (IDA). Up to five thousand dollars ($5,000) deposited in an Individual Development Account by a Families First recipient is excluded as a resource as long as the individual continues to receive Families First and maintains the funds in the IDA.

(17) Dedicated Accounts for SSI Children, set up in accordance with Section 213 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 are excluded as resources.

(18) Other Exempt Resources.

(a) Earmarked Resources. Exempt any governmental payments which are designated for the restoration of a home which has been damaged in a disaster if the household is subject to a legal sanction if the funds are not used as intended.

(b) Prorated Income. Resources, such as those of students or self-employed persons, which have been prorated and counted as income, are exempt.

(c) Indian Lands. Indian lands held jointly with the tribe, or land that can be sold only with the approval of the Bureau of Indian Affairs are exempt.

(d) Livestock and poultry consumed as home produce.

(19) Handling of Excluded Funds

(a) Excluded liquid assets that are kept in a separate account and that are not commingled in an account with non-excluded funds shall retain their exclusion as a resource for an unlimited period of time.

(b) Resources which have been excluded as prorated income that are commingled in an account with non-excluded funds shall retain their exclusion for the period of time over which they have been prorated as income (i.e., they will not be counted as both income and resources during the same period of time).

(c) All other excluded monies which are commingled with non-excluded funds shall retain their exemption for six (6) months from the date they are commingled. After six (6) months all funds in the commingled account other than those in (a) above are counted as a resource.

(20) Educational Savings Accounts - Food Stamps

(a) Educational savings accounts under Section 529 of the Internal Revenue Code of 1986 qualified tuition programs, shall be exempt.

(b) Coverdell Education Savings Accounts (Section 530 of the Internal Revenue Code) shall be exempt.

Tenn. Comp. R. & Regs. 1240-01-04-.05

Original rule filed August 15, 1980; effective September 29, 1980. Amendment filed November 6, 1980; effective December 22, 1980. Amendment filed March 16, 1981; effective June 29, 1981. Repeal and new rule filed December 10, 1981; effective January 25, 1982. Amendment filed August 17, 1982; effective September 16, 1982. Amendment filed July 20, 1982; effective October 13, 1982. Amendment filed March 28, 1983; effective April 27, 1983. Amendment filed May 17, 1983; effective June 16, 1983. Amendment filed March 12, 1984; effective June 12, 1984. Amendment filed January 7, 1985; effective February 6, 1985. Amendment filed April 30, 1985; effective July 14, 1985, Amendment filed November 6, 1987; effective February 28, 1988. Amendment filed February 12, 1988; effective May 29, 1988. Amendment filed September 18, 2001; effective December 2, 2001. Amendments filed December 30, 2008; effective March 15, 2009.

Authority: T.C.A. §§ 4-5-201 et seq., 4-5-202, 14-8-104, 14-8-106, 14-27-104, 14-27-106, 71-1-105, 71-5-304, 71-5-306, 71-3-165, 7 U.S.C.A § 2014(g); 7 CFR 273.8(c)(e)(14), 273.8(e)(15)(h)(1)(iv), 273.9, 273.9(b)(1)(v), 273.10, 273.11(c), 45 CFR 233.20, PL 98-369§2625, PL 98-369§2626, PL 97-35, and PL 110-246, Title IV § 4104(b).