The blind person’s income and resources must be within certain limits.
The combined value of the blind person’s real and personal property must not be greater than $7,500.
When a blind person jointly owns real or personal property, the CAO considers each person to own an equal share unless the ownership papers show otherwise.
If a blind person disposes of any real or personal property within two years of the date he applies for SBP and this reduces his property value to $7,500 or less, he does not qualify for SBP unless he received fair consideration for the value of the property above the $7,500.
Example: On April 9 Mr. A gave his sister his house, assessed at $8,700. There were no encumbrances against the house. He has no other resources. On December 12, Mr. A applied for SBP. He will not qualify until he can show the CAO that he received benefits equal in value to $1,200 ($8,700 - $7,500), or until two years from the date the property changed hands (April 9).
If a person disposes of real or personal property while getting SBP and this reduces his property value to $7,500 or less, he does not qualify for two years after the disposition date unless he received fair consideration for the value of the property above the $7,500.
NOTE: Explore fair consideration only if the blind person’s real and personal property value combined is more than $7,500 before disposition.
Property may be disposed of by:
Title exchange
Reducing the value by placing an encumbrance (mortgage or judgment)
Selling it or giving it to someone else
To decide if the blind person received fair consideration, compare the money and/or benefits he received for the property with the market value at the time of disposition, subtracting any encumbrances.
The blind person received fair consideration if he got at least the approximate net market value. If the blind person did not get at least the approximate net market value, the CAO must find if the person purposely defrauded the state by disposing of the property in order to qualify for SBP.
In making the "intent to defraud" finding, the CAO must consider both:
1. The transfer circumstances
Example: The blind person was forced to dispose of property to settle a divorce action
2. The blind person’s age, education, health and financial condition
Examples:
There is no intent to defraud if there is a valid reason for disposing of the property.
The blind person qualifies for benefits even though he did not receive fair consideration. If the CAO suspects intent to defraud, the blind person must give information proving that he did not dispose of the property to qualify for SBP.
If the CAO denies or ends SBP payments because the blind person did not receive fair consideration for the disposition of real or personal property, and the CAO found intent to defraud, the blind person may ask for a review by the Area Manager.
The CAO will send the Area Manager a summary of the facts. The Area Manager will tell the CAO whether the decision was correct. The blind person may appeal. See Chapter 870, Appeal and Fair Hearing.
Real property is:
Residential real estate
Non-residential real estate
Houses on leased land
Mineral or subsurface rights
Life interests
When finding the value of a blind person’s real property, the CAO must use the assessed value subtracting any encumbrances, as long as the assessed value is not more than 30% of the official market value.
Example: The blind person owns a life interest in property. The CAO must refer the matter to OIG to find the value using the Revenue Department's mortality tables. The CAO must send OIG the document describing the life interest, the age of the owner, the assessed value, and the encumbrance amount(s).
If the county rate of assessment is more than 30%, the CAO must use these steps to find the value of the property:
1. Divide the county assessed value by the county percentage rate of assessment
2. Multiply the results by 30%
3. Subtract any encumbrances
If the blind person improves or enlarges his property and the tax assessment increases, the CAO must review the value of the resource.
NOTE: The assessed value may not be more than 30% of the official market value.
If the taxing authority reassesses the property and no improvements or enlargements have been made, the CAO uses the original assessed value to find the value of the resource.
Personal property is any resource other than real property and income. This includes:
Money on hand, in a financial institution or any place where it is readily available
Stocks, bonds, mortgages or notes
Life insurance
NOTE: Use the cash value as the market value for life insurance.
Burial reserves except irrevocable burial
Trust funds
NOTE: Trust funds are considered a resource only if the trustee has the right to use the principal for the blind person’s benefit.
Lump sum death benefits, inheritances or insurance received because of the death of someone else
Proceeds from the sale or conversion of property
Compensation form the loss or destruction of property
The CAO finds personal property value by subtracting encumbrances from market value.
Do not count this personal property when finding the value of a blind person's resources:
The value of such property as equipment and stock, other than securities
Household furnishings
Personal effects
The blind person's annual net income, including SBP, may not be more than $4,260.
The CAO counts all earned and unearned income the blind person actually gets. The person may get the income regularly, irregularly, or as a one-time payment.
Income includes:
Wages, commissions and bonuses
Sick benefits from an employer
Gross receipts from a business, farm profession, renting rooms or providing board
Dividends from stocks
Interest on bank deposits, bonds, mortgages and notes
Periodic payments from trust funds
Rents, royalties or other payments received because of ownership of real or personal property
Veteran’s benefits, UMWA benefits, Social Security benefits, Unemployment Compensation, Worker’s Compensation, Railroad Retirement, pensions
Disability and annuity payments
Damage awards for personal injuries
Lottery winnings
Contributions or gifts
NOTE: Do not count small contributions or gifts that are not expected to happen again.
Do not count money spent by relatives, friends, or others for the benefit of the blind person, as long as the money is not given to the blind person directly.
If the blind person has a right or claim to a benefit, award, or pension that is not immediately available, he qualifies only if he agrees to make the resource available. The CAO must accept any sound and reasonable plan for developing the resource.
Earned income is income a blind person gets from operating a business or farm, practicing a profession, or working for someone else.
Every SBP recipient is allowed certain income deductions for employment related expenses. The earned income deductions are:
1. From earned income from gross wages, commissions and bonuses:
Expenses for the job not paid by the employer, such as tools, materials, uniforms, telephone, etc.
Actual cost of transportation to and from the job
Actual cost of guide service or maintenance of a dog guide needed for employment
2. From gross income from operating a business or farm or practicing a profession:
Actual expenses needed to produce, protect and continue the income
3. From gross income from renting rooms or apartments, or furnishing meals when the blind person also provides an additional service:
$10 per month for each tenant or tenant group,
$20 per month for each boarder,
$30 per month for each separate tenant-boarder (persons not included above),
$30 per month for the first person and $20 per month for each additional person in a tenant-boarder group, persons not included above,
and 50% of the remainder
NOTE: There are no deductions for personal expenses, such as income taxes, Social Security taxes, and occupational taxes.
For SBP, a tenant or a tenant-boarder is a person whose rent or room and board arrangements are with the blind person independent of others.
A tenant group or a tenant-boarder group is two or more people who live together as a family and jointly pay rent or room and board to the blind person.
These are always considered a tenant group or a tenant-boarder group:
A husband and wife
Parents and their children
Any others who rent a place to live as a group
Unearned income is income the blind person gets for which he does not provide a service.
Every SBP recipient is allowed certain deductions from unearned income. The unearned income deductions are:
1. From unearned income from renting space or equipment where the blind person does not provide a service:
The expenses needed to continue getting the income
2. From unearned income from Social Security (SS) benefit:
The first $4 and any increase received since the date SS benefits began or since January 1, 1971, whichever is later
Any future increases under the Social Security Act due to a change from dependent’s SS to widow’s benefits
3. From unearned income from Railroad Retirement (RR) and veterans (VA) benefits:
Any increases received since the date RR or VA began or since January 1,1976, whichever is later
4. From earned income from any other sources:
Actual expenses needed to keep getting the income
NOTE: Deduct only those increases in SS, Railroad Retirement, and Veterans' benefits given periodically to all beneficiaries. Disregard any increase in SS benefits that is not a cost-of-living adjustment (COLA) available to all recipients. For example, disregard the increase for a widow who was getting dependent's benefits and begins getting benefits on her husband's work record after he dies.
Reviewed July 30, 2013