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Conversion of Property
Conversion of Property occurs when the property is changed from one form to another without changing ownership. The following are examples of conversions of property:
Example 1
A client withdraws $300.00 from their savings account and purchases a television. The client was eligible prior to converting cash into an household item and remains eligible after the purchase.
Example 2
A client cashes in her life insurance policy and receives $489 on 4/8/18. The client deposits the money in her savings account and does not plan on spending it prior to May 1. With the inclusion of this money in the client's property reserve she will exceed the property limit May 1.
As client received payment after 4/1/18, she did not exceed the property limit for the entire month therefore, she remains eligible for April. The EW must explain the “Spend down” rules to the client. Discontinue 4/30/18 with a 10-day notice for excess property. Advise the client on the NOA that she will have to spend down the excess property before MC can be restored.
Note: Insurance or other 3rd party payments for the loss or damage of property is treated as converted property rather than income.
Example 3
A client experiences a house fire. He receives a check on 5/2 for $5,000.00 to replace damaged items. In the month he receives the insurance payment, the payment is treated as property rather than income. In the month following receipt, any remaining money must be treated as property. Payments that do not cover loss/damage of property are treated as income.
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