What Happens To My Benefits If I Get a Bunch of Money? TANF Here is what happens if you are on the TANF program when you get lump-sum income:

Transcription

1 126 Sewall Street Augusta, Maine TTY/Vice: (207) Fax: (207) What Happens T My Benefits If I Get a Bunch f Mney? Each prgram, (TANF, SSI, MaineCare, etc.) has its wn rules fr what happens if yu get what is called "lump-sum incme." We will explain the rules fr each prgram. Here are sme types f "lump-sum" incme that may cunt: SSI r Scial Security retractive awards Veteran s retractive awards Insurance settlements Wrkers cmpensatin awards Inheritances Divrce settlements Mney yu get when yu sell a huse, land r ther things Unemplyment Gifts Lttery Winnings Incme Tax Refunds TANF Here is what happens if yu are n the TANF prgram when yu get lump-sum incme: TANF will nt cunt the fllwing parts f lump sum awards: Amunts paid ut fr attrneys fees Amunts earmarked in the award t pay fr certain items, such as medical expenses. The mney must be actually used t pay fr that earmarked cst. Up t $10,000, if within 30 days f getting the mney, yu depsit the mney in a separate accunt. DHHS must first apprve the accunt. The mney may nly be withdrawn frm the accunt t pay fr certain expenses, such as: Educatin r jb training Purchase r repair f the family s hme Purchase r repair f a vehicle used fr wrk r educatin r training Starting a small business Mney used within the first 30 days t pay health care csts fr a member f yur husehld Mney used within the first 30 days t pay fr an emergency, such as t stp an evictin, freclsure, utility terminatin, car/truck repair s yu dn t lse a jb What happens t my benefits if I get a bunch f mney March

2 Mney used within the first 30 days t pay fr ther "essential family needs apprved by DHHS." Mney used t pay fr unexpected expenses. Examples are: funeral expenses, travel csts related t illness, repair f a vehicle; payment f day t day living csts, medical needs, clthing, and husing needs. It is nt enugh t put aside mney fr these expenses. Yu must actually spend the mney. Here is what happens with what is left ver frm the lump sum. Basically there is a penalty perid during which yu will nt get TANF. The length f the penalty perid depends n hw much mney yu have and hw much TANF yu usually get. Fr example, if yu usually get $486 per mnth and yu have $12,000 left ver then DHHS divides $486 int the $12,000 and puts yu ff the TANF prgram fr abut 25 mnths. Yu can smetimes shrten the penalty perid if yu can shw that sme unexpected emergency came up and yu had t spend yur mney. Yu shuld check with DHHS befre yu spend the mney. Here are sme examples f things that yu culd spend the mney n and shrten the penalty: funeral expenses travel csts related t illness repair f a vehicle; payment f day t day living csts medical needs clthing husing needs, including payment t prevent an evictin r freclsure payment f utility bills t prevent a discnnectin. It is nt enugh t put aside mney fr these expenses. Yu must actually spend the mney. Yu can als nt pay bills ahead f time. Yu must wait until it becmes an emergency. Here are a cuple f ways t avid the lump-sum penalty. Stp yur TANF the mnth befre yu expect t get the lump-sum mney. Fr example, if yu expect t get the lump sum in July, then in June drp ut f the TANF prgram. Yu need t d this as early as yu can in June. If yu d get TANF in July, even after yu have drpped ut f TANF, d nt spend the TANF and cntact yur DHHS eligibility specialist right away t return the mney. This will nt wrk after the fact. Yu can nt get the mney in July and call DHHS in July and say: take back my TANF fr July. Once yu spend yur lump-sum belw the TANF limit f $2000, re- apply fr TANF the mnth after yu get belw the $2000 liquid asset limit.. Keep receipts n hw yu spend the mney, s yu can prve that yu n lnger have it, when yu g back in t re-apply. What happens t my benefits if I get a bunch f mney March

3 MaineCare When yu get a lump-sum while yu are n MaineCare here is what happens: 1. The lump-sum is cnsidered t be incme in the mnth that yu get the lumpsum. Yu need t reprt t DHHS that yu have gtten any incme. Yu must reprt this within 10 days f getting the mney. (SSI lump sum payments d nt cunt as incme.) The lump-sum will nt end yur MaineCare fr the mnth in which yu get the mney. Fr example, if yu get the lump-sum in July, yu keep yur MaineCare fr July. Yu d nt have t pay anything back. 2. In the next mnth, anything left ver frm the lump-sum cunts as an "asset." It will cunt against the asset limits in MaineCare. Yu need t get yur lump-sum, and any ther assets, belw the asset limit by any time in the mnth after yu get the lump sum; therwise yu may lse yur MaineCare. Example: Yu get a lump-sum in July. It will cunt as an asset in August. Basically, yu can keep yur MaineCare if yu get yur assets dwn belw the limits n any day in August. The basic asset limits fr MaineCare are: $2000 if yu are an elderly (65 r lder) r disabled persn ($3000 fr a cuple) $2000 if yu are age 19 r lder. $8000 if yu are a disabled persn wh is wrking and under the Wrking Disabled prgram. Imprtant: There are n asset limits fr: parents, children under age 21, r pregnant wmen. Asset limits nly apply t peple ver age 65 r wh peple wh are disabled. Sme things will nt cunt as lump sum incme. Fr example, amunts set aside in any lump sum insurance award t be used t pay fr specific purpses, such as t pay attrneys fees r medical expenses d nt cunt fr up t six (6) mnths. Sme assets d nt cunt. Here is a partial list f assets that will nt cunt: ne vehicle (e.g. car, truck, mtrcycle, snwmbile) a secnd vehicle if used t get t wrk, medical appintments, training, r t perfrm ther essential activities. (A vehicle mdified t be used by r t transprt smene with a disability is als nt cunted.) a third vehicle, subject t certain limits. furniture and ther husehld gds used fr day t day living, including basic jewelry, like a wedding ring. huse and lt, (it must be yur primary residence) burial plt r burial insurance What happens t my benefits if I get a bunch f mney March

4 clthing up t $10,000 put int a DHHS apprved Family Develpment Accunt. (This is nly fr families with minr children.) The mney in the accunt may nly be used fr certain limited purpses.t $8000 f savings fr an individual, $12,000 fr a husehld f 2 r mre peple assets f a step-parent (unless getting MaineCare) assets used t prduce incme r gds fr hme use retractive SSI r Scial Security awards t the elderly r disabled d nt cunt as assets fr 9 mnths Keep receipts fr hw yu spend yur mney. 3. If yu dn t get yur mney belw the limit, fr at least ne day during the mnth, then yu will lse yur MaineCare. Yu can get yur MaineCare back, nce yu g belw the allwed limits fr assets. Fd Supplement In spending yur mney, yu need t be careful. Smetimes yu are allwed t make gifts f yur mney t ther peple and that is legal. Smetimes, yu may risk lsing yur MaineCare if yu d this. Yu need t speak with a lawyer befre giving away any mney. Lump-sum payments d nt cunt as incme. There are als n asset limits fr the Fd Supplement prgram. Therefre, mney that yu get as a lump-sum will nt be used when seeing if yu can get Fd Supplement benefits. Yu shuld still reprt t DHHS that yu have received a lump sum. SSI Lump sum payments cunt as incme in the mnth that yu get it. In the next mnth, the lump sum cunts as an asset. Here is what happens t yur SSI. First, Scial Security will lk t see if the lump-sum yu gt puts yu ver the incme limits fr the mnth yu gt bth SSI and the lump sum. Fr example, yu get $684 f SSI in Octber. Yu then get a $20,000 lump sum in mid-octber. Since yu are ver the incme guidelines fr Octber, Scial Security will send yu a ntice that yu were verpaid SSI fr Octber. They will try t cllect that $684 frm yu by reducing yur future SSI payments. Yu can ask Scial Security t "waive" the verpayment. Secnd, the lump-sum yu get will cunt against the $2000 limit n assets fr a single persn and the $3000 limit fr a cuple getting SSI. When Scial Security lks t see if yu are ver the asset limit, they lk at the first day f the mnth. What happens t my benefits if I get a bunch f mney March

5 Example: Yu get a lump sum in Octber. Yu spend it dwn belw the asset limit befre Nvember 1st. Yu will nt have an asset prblem fr Nvember. If yur lump sum is frm a back award f SSI r Scial Security, then special rules apply. Fr the first 9 mnths any back award will nt cunt as an asset. It is imprtant t keep this mney separate frm any ther mney that yu have. If yur lump sum is t replace an asset that was destryed r damaged, then the lump sum may nt cunt fr 9 mnths r mre. This happens when the mney yu get is t replace smething that Scial Security des nt cunt. Example: Yu wn a car. The car is damaged and yu get an insurance settlement s that yu can fix r replace the car. That mney yu get will nt cunt fr 9 mnths. Scial Security will nt cunt any part f the lump sum that ges tward paying yur legal fees. In the case f an accident settlement, if medical expenses are paid, that mney will nt cunt. Here are sme things that yu can spend yur lump sum n. These will nt cunt against the $2000/$3000 asset limit. Buying r repairing a hme. (If yu sell yur hme and then plan t buy a new hme, yu can keep the sale mney fr up t 3 mnths, and it will nt cunt as an asset r incme.) Husehld gds, such as furniture and clthing One vehicle f any value Prperty used in trade r business (fr example, tls if yu have a business) Mney r prperty set aside fr a Prgram t Achieve Self-Supprt r PASS. This is a plan that yu cme up with and that Scial Security must apprve. It is a plan fr yu t g back t schl, start wrking, set up a business, etc. Scial Security then will nt cunt the incme r assets that yu use fr yur PASS plan. Life Insurance (up t $1500 cash surrender value) Burial spaces and burial cntracts are nt cunted. Yu can als set aside burial funds up t $1500 in a separate accunt. There are ther things that will nt cunt as assets. This is just a list f the mst cmmn things that d nt cunt. Nte: This infrmatin is general; it cannt address every circumstance. If yu have questins abut whether smething cunts as an incme r an asset fr any prgram, seek legal advice. Cntact Pine Tree Legal r MEJP. What happens t my benefits if I get a bunch f mney March