WAG 07-02-17

Annuities, pension plans and other retirement accounts that can be accessed are countable as income or as a Revised textresource.

  • If the client is drawing benefits from their plan, budget the income. The principle is exempt.
  • If the client is not drawing benefits, determine their ability to access the plan.  If they can access their benefits without a penalty (but choose not to), count the principle as a Revised textresource. If there is a penalty for accessing, count the principle minus the penalty as a Revised textresource.

If the client cannot access the annuity, pension plan or other retirement account, the Revised textresource is exempt.

Annuities

An annuity is a contract to receive fixed, periodic payments, either for life or for a specified number of years. When an annuity is purchased, the person usually pays a lump sum premium in exchange for the guaranteed payments.

New textRefer long term care cases with annuities to HFS Long Term Care - Asset Discovery Investigation (LTC-ADI).  For community cases, refer to the Bureau of Collections. 

NH, SLF, and Medical Only Cases with DoA HCBS Waiver Services

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The purchase of an annuity is a transfer of Revised textresources or income that is subject to the transfer policy (see PM 07-02-20). To decide if the client received fair market value, determine if the annuity pays benefits in approximately equal periodic payments over the term of the annuity.

If the annuity pays benefits in approximately equal periodic payments over the term of the annuity, compare the lump sum premium amount to the expected return on the annuity. The expected return is the expected amount the client will receive based on the amount of periodic payments along with the life expectancy of the client.

If the annuity does not pay benefits in approximately equal periodic payments over the term of the annuity, fair market value is not received. The expected return is the expected amount the client will receive based on the amount of approximately equal periodic payments along with the life expectancy of the client. Do not consider any other payments as part of the expected return.