WAG 07-02-17
Annuities, pension plans and other retirement accounts that can be accessed are countable as income or as a resource.
- If the
customer is drawing benefits from the plan, budget the income. The principle is exempt.
- If the customer is not drawing benefits, determine his or her ability to access the plan. If he or she can access the benefits without a penalty (but chooses not to), count the principle as a resource. If there is a penalty for accessing, count the principle minus the penalty as a resource.
If the customer cannot access the annuity, pension plan or other retirement account, the resource 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.
Refer 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
The purchase of an annuity is a transfer of resources or income that is subject to the transfer policy (see PM 07-02-20). To decide if the customer 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 customer will receive based on the amount of periodic payments along with the life expectancy of the customer.
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 customer will receive based on the amount of approximately equal periodic payments along with the life expectancy of the customer. Do not consider any other payments as part of the expected return.
