For the purpose of Medicaid, automobile is defined as any registered or unregistered vehicle used for transportation.

One vehicle may be excluded under Section 20310.5.

Only one vehicle may be excluded per married couple/household.

If one vehicle can not be excluded under Section 20310.5, or there is more than one vehicle, the equity value is a non-liquid resource if it:

• Is owned by an eligible individual/spouse; or

• Cannot be excluded under another provision (e.g. property essential to self support - DSSM 20320.5; co-owner refuses to sell) or conditional benefits do not apply (DSSM 20360).

The equity value is the price it can reasonably sell for on the open market in Delaware minus any encumbrances.

11 DE Reg. 1479 (05/01/08)

Financial institution accounts which include savings accounts, checking accounts, certificates of deposit, etc., are an individual's resource if the individual owns the account and can use the funds for his or her support and maintenance. We determine whether an individual owns the account and can access the funds by looking at how the account is titled.

If an individual is designated as sole owner by the account title, all of the funds are that individual's resource unless legal restrictions preclude the owner from using the funds for his or her support and maintenance. We do not provide an opportunity for the owner of an individually-held account to rebut the presumption of 100% ownership.

If the account is in the name of a Medicaid applicant/recipient and another Medicaid applicant/recipient, assume all account funds belong to each individual in equal shares. If the account is in the name of a Medicaid applicant/recipient and another individual who is not applying for Medicaid or who is not a Medicaid recipient, then assume all of the funds belong to the Medicaid applicant/recipient.

If the applicant or recipient disagrees with the ownership presumption on jointly-held accounts, we give the individual the opportunity to rebut the presumption. Rebuttal is a procedure which permits an individual to furnish evidence and establish that some or all of the funds in a jointly-held account do not belong to him or her. Obtain the individual's statement on a form containing the penalty clause regarding who owns the funds, why there is a joint account, who has made deposits to and withdrawals from the account, and how withdrawals have been spent. Inform the individual that he or she must submit the following evidence within 30 days:

- a corroborating statement from the other account holder(s). If the other account holder is incompetent or a minor, have the individual submit a corroborating statement from anyone aware of the circumstances surrounding establishment of the account; account records showing deposits, withdrawals and interest paid for the months that ownership is an issue; if the individual owns none of the funds, evidence showing that he or she can no longer withdraw funds from the account; if the individual owns only a portion of the funds, evidence showing removal from the account of the individual's funds or removal of the funds owned by the other account holder(s) and redesignation of the account.

Any funds that the evidence establishes were owned by the other account holder(s) are not and were not the individual's resources. The effect of a successful rebuttal is retroactive as well as prospective.

A loan is an advance from a lender to a borrower that the borrower must repay, with or without interest. DMMA does not count loan proceeds as income to a borrower because of the borrower's obligation to repay. Any portion of the borrowed funds that the borrower does not spend is a countable resource if it is retained into the month following the month of receipt.

If a Medicaid applicant is the owner of a promissory note, loan, or property agreement (mortgage), DMMA will assume that the value of the agreement is its outstanding principal balance.

If the outstanding principal balance plus other countable resources exceeds the resource limit, we will inform the individual that DMMA will use the outstanding principal balance to determine the value of resources unless the individual successfully rebuts the value. See 20330.3.1.

DMMA will consider the value of a promissory note, loan, or mortgage as a transfer for less than fair market value unless:

• The repayment term is actuarially sound;

• Payments are made in equal amounts during the term of the loan with no deferral of payments and no balloon payments; and

• The promissory note, loan or mortgage prohibits the cancellation of the balance upon the death of the lender.

In determining the amount of the asset transferred, DMMA looks at the value of the outstanding balance of the note, loan or mortgage at the date of the individual's application for Medicaid coverage of services listed in section 1917(c)(1)(C)of the Act.

Payments received against the principal balance are not income. They are conversion of a resource. The portion of the payment which represents interest is unearned income.

The SSA Life Expectancy Table can be found at

www.ssa.gov/OACT/STATS/table4c6.html.

10 DE Reg. 1596 (04/01/07)

11 DE Reg. 314 (09/01/07)

DMMA will give the applicant an opportunity to rebut the value placed on the promissory note, loan or mortgage. The rebuttal must include a written estimate from a disinterested, knowledgeable source (such as a broker or appraiser) showing that the value is less than our determined value. An applicant may also assert that there is a legal bar to the sale of the instrument by offering documentary or other evidence of a bar or impediment to the sale of the instrument.

10 DE Reg. 1596 (04/01/07)

11 DE Reg. 314 (09/01/07)

Retirement funds are annuities or work-related plans for providing income when employment ends, such as pensions, individual retirement accounts (IRA), disability, Keogh plans and some profit sharing plans.

The value of a retirement fund is the amount of money that an individual can currently withdraw. Pension plans that allow withdrawals are known as Defined Contribution Plans. If there is a penalty for early withdrawal, the fund's value is the amount available after the penalty deduction. Any taxes due are not deductible in determining the fund's value. A retirement fund is not a resource if an individual must terminate employment in order to obtain any payment.

If an individual is eligible for periodic retirement benefits, the individual must apply and accept the periodic benefit. If the individual has a choice between periodic benefits and a lump sum, the individual must choose the periodic benefits.

Defined Benefit Plans are retirement funds that are not accessible until the recipient meets eligibility criteria outlined in the retirement plan contract (e.g. actual retirement and reaching a predetermined age). These plans are not considered a countable resource until the individual is eligible to begin receiving benefits as outlined in the retirement plan. Defined Contribution Plans and Defined Benefit Plans are not considered countable resources when owned by an ineligible spouse. An ineligible spouse is a legally married husband or wife who is not eligible for Medicaid benefits.

10 DE Reg. 1436 (03/01/07)

Shares of stock represent ownership in a business corporation. Their value shifts with demand and may fluctuate widely. If the stock has co-owners, assume that each owner owns an equal share of the value of the stock and that the owner can sell them at current value. Broker fees do not reduce the value that stocks have as resources. Obtain a copy of the stock certificate or most recent statement of account from the firm that issued or is holding the stock.

The value of a stock as a resource is its current market value. The current market value of a stock is its closing price on any given day and can usually be found in a regular or financial newspaper. A closing price of 22 3/4 equals $22.75. The values of over-the-counter stocks are shown on a "bid" and "asked" basis. For example, "18, bid, 19 asked." Use the bid price as the current market value. The "par value" or "stated value" shown on some stock certificates is not the market value.

The stock of some corporations is held within close groups and traded very infrequently. The sale of such stock is often handled privately and is subject to restrictions. The evidence for this kind of stock can be a written statement from the firm's accountants giving their best estimate of the stock's value and the basis for the estimate, such as most recent sale, most recent offer from outsiders, current market value of assets less any debts on them, etc.

A stock option is the right to sell or buy stock at a specified price by a specified date. A stock option controls 100 shares of stock, but options are quoted on the price per share. Options come due and are quoted for each January, April, July and October. A closing price of 1/4 equals $25.00.

"Mutual Fund" is a term that encompasses a wide range of investments. It is a pool of assets (stocks, bonds, etc.) managed by an investment company. A mutual fund share represents ownership interest in this pool as opposed to a particular stock or bond. The documentation guidelines for stocks also apply to mutual funds. Many newspapers contain a separate table showing the values of funds not traded on an exchange.

U.S. Savings Bonds are obligations of the Federal Government. They are not transferable and can only be sold back to the Federal Government. Normally, they cannot be redeemed for six months after the issue date specified on the face of the bond. For Series EE, and I Savings Bonds, the redemption period has been extended to 12 months. They become resources (not income) as of the 7^th or 13th month. A bond may not roll over or renew in order to prolong the minimum retention period. Actual redemption (converting to cash) of one bond is required before purchasing a new bond. However, the U.S. Treasury regulation authorizes the Commission of Public Debt to waive the regulatory provisions pertaining to U.S. Savings bonds including the redemption period in order to “relieve any person or persons of unnecessary hardship”. A request for a refund because the person now requires Nursing Home care and so needs the funds used to purchase the bonds may constitute hardship. A written request to the Commissioner of Public Debt requesting a waiver to the redemption period is all that is required. The bondholder may simultaneously tender the bond(s) for redemption. If the Treasury receives the bond(s) and grants the waiver, it will issue the individual a check. Since bonds are redeemable due to hardship, the redemption value is treated as an available resource.

The individual in whose name a U.S. Savings Bond is registered owns it. The Social Security Number shown on a bond is not proof of ownership. The co-owners of a bond (bond titled AND/OR) own equal (50%) shares of the redemption value of the bond. The bond may show an owner followed by POD (proof of death) and another name. This is a survivorship type of bond. The name of the first individual owns 100% of the bond. The second individual will own 100% of the bond upon the death of the first individual.

Physical possession of a U.S. Savings Bond is a requirement for redeeming it. This is true for sole or joint ownership. If an individual alleges that he or she cannot submit a bond because a co-owner or other individual will not relinquish physical possession of the bond, obtain a signed statement from the co-owner or the other individual that he or she: has physical possession of the bond; will not allow the applicant to cash the bond; and if co-owner, will not cash the bond and give the applicant his or her share.

The Table of Redemption Values for U.S. Savings Bonds is used to determine the value of a bond. These are available from a local bank. The bank will need the series, denomination, date of purchase or issue date. After the mandatory 6-month retention period, the value of a series H or HH bond is its face value.

Office of Public Debt

Buffalo Branch, FRB of NY

Fiscal Services Division

P.O. Box 961

Buffalo, NY 14240-0961

www.publicdebt.reas.gov

8 DE Reg. 1313 (03/01/05)

10 DE Reg. 1601 (04/01/07)

A bond is a written obligation to pay a sum of money at a specified future date.

A municipal bond is the obligation of a State or a locality (county, city, town, village, or special purpose authority such as a school district).

A corporate bond is the obligation of a private corporation. Corporations sell corporate bonds to raise capital. Corporate bonds are issued in two forms: registered, which pay interest to their registered owner; and bearer or coupon bonds, which pay interest to whomever holds the bond. Zero coupon bonds do not pay current interest. The accrued interest is paid at maturity.

A government bond, distinct from a U.S. Savings Bond, is a transferable obligation issued or backed by the Federal Government. They include Treasury bills, notes and bonds, and Federal agency securities, such as Federal Home Loan Mortgage Corporation (FREDDIE MAC) and Government National Mortgage Association (GINNIE MAC).

Bonds are negotiable and transferable. Their value as a resource is their current market value. The redemption value, which is available only at maturity, is immaterial. The documentation for these bonds is similar to stocks.

Delaware has adopted the Uniform Gifts to Minors Act (UGMA) which permits making gifts to minors that are free of tax burdens. The UGMA is sometimes called the Uniform Transfers to Minors Act (UTMA).

Under Delaware UGMA law:

• An individual may make an irrevocable gift of money or other property to a minor. If such a gift is made, then;

• The gift, plus any earnings it generates, is under the control of a custodian until the child reaches the age of majority established by State law;

• The custodian has discretion to provide to the minor or spend for the minor’s support, maintenance, benefit or education as much of the assets as he/she deems equitable; and

• The child automatically receives control of the assets upon reaching the age of majority (his/her 18^th birthday). At this time, the UGMA property becomes a countable asset for the purpose of program eligibility.

UGMA property including any additions or earnings is not income to the minor. However, any disbursements from the UGMA account to the minor will be considered income to the minor.

Verification

DSS will verify all allegations of existence of a UGMA gift by obtaining a copy of the document of ownership (e.g., deed, certificate of deposit, savings account, etc.) or other written document from the issuing source. If there is no document designating a UGMA gift, then the asset will be considered a countable resource.

8 DE Reg. 1712 (6/1/05)

For Medicaid purposes, an annuity is a financial device between an individual and a commercial company that conveys a right to receive periodic payments for life or a fixed number of months or years.

1. Any interest an applicant or community spouse has in a revocable or irrevocable annuity must be disclosed at the time of application.

2. Failure to disclose interest in an annuity may result in denial of payment for long term care services or denial of Medicaid eligibility.

1. The equity value of a revocable annuity is a countable resource.

2. An assignable annuity (the owner or payee may be changed) is a countable resource. The resource value is the amount the assignable annuity can be sold for on the secondary market.

3. An annuity purchased by a third party, e.g. applicant’s employer, as a retirement benefit to the applicant will not be counted as an available resource. (DSSM 20330.4)

4. The stream of income generated by an annuity, whether a countable resource or not, is countable income.

1. The DMMA will notify, in writing, the issuer of an annuity owned by an applicant that the State is the preferred remainder beneficiary.

This notice will require the issuer to notify the State of any changes in the amount of income, principal or beneficiary to the annuity.

This notice will require the issuer to notify the State of any changes in the amount of income, principal or beneficiary to the annuity.

2. Certain transactions that occur on or after February 8, 2006 will subject an annuity purchased prior to this date to the DRA provisions. (DSSM 20330.10.E., DSSM 20330.10.F.)

These transactions include such things as an addition to the principal, elective withdrawal, requests to change beneficiary, or elections to annuitize the contract.

1. The State of Delaware must be named as a beneficiary in the correct position.

The State must be named beneficiary in the first position for the total amount of medical assistance paid on behalf or the institutionalized spouse, unless there is a community spouse, minor child, or disabled child who resides in the applicant’s home.

In such a case, the State must be named in a secondary or remainder position.

2. If the State is not named as a remainder beneficiary the purchase of the annuity will be considered a transfer for less than fair market value.

3. The full purchase value of the annuity will be considered the amount transferred.

1. The transfer of assets provisions should be applied to all annuities purchased on or after February 8, 2006 unless:

A. The annuity is considered either:

An individual retirement annuity (according to Sec. 408 (b) of the Internal Revenue Code of 1986); or

A deemed Individual Retirement Account under a qualified employer plan (according to Sec. 408 (q) of the Internal Revenue Code of 1986).

OR

B. The annuity is purchased with proceeds from one of the following:

A traditional IRA (IRC Sec. 408a); or

Certain accounts or trusts which are treated as traditional IRAs (IRC Sec. 408 §(c)); or

A simplified retirement account (IRC Sec. 408 §(p)); or

A simplified employee pension (IRC Sec. 408 §(k)); or

A Roth IRA (IRC Sec. 408A).

OR

C. The annuity meets all of the following requirements:

The annuity is irrevocable and non-assignable; and

The annuity is actuarially sound; and

The annuity provides payments in approximately equal amounts, with no deferred or balloon payments.

11 DE Reg. 676 (11/01/07)