Land Contracts in Michigan
Land Contracts in Michigan document sample
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Michigan Public Assistance Programs COMMON DEFINITIONS AND CONCEPTS Prepared by the Center for Civil Justice Updated March 20, 2007 by the Michigan Poverty Law Program I. ASSETS What is an asset and why do we care? If a client has too many of them, they are not eligible for benefits. To qualify for benefits, the asset group's combined countable assets cannot exceed the asset limit of the appropriate program or Medicaid category. Different programs have different asset limits. The group counted is usually the family or members living in the same household. PEM 400. Examples of programs with no asset test: Food Assistance Program (FAP) Only Healthy Kids (PEM 125, 129 and 131). Group 2 Pregnant Women (PEM 126). TMA-Plus (PEM 645). Guarantee-of-Payment for Pregnant Women (PAM 107). Examples of unavailable asset: Irrevocable funeral burial account that cannot be accessed, irrevocable life insurance policy, jointly owned proprety that cannot be sold without consent. Evidence that an asset is unavailable: contracts, court orders, laws or other legally enforceable devices. Example: Some assets are completely excluded and do NOT count toward the asset limit. For the most part, the house that an individual resides in is excluded as an asset. It is very important to know these so that clients are not cut off from benefits because their assets are too high. Examples of countable assets: - savings and checking accounts - uncashed checks - lump sum payments such as lottery winnings and inheritances, if not considered income. - stocks, bonds, and securities - pension plans, IRAs - Real property, mortgages, land contracts, life estates and life leases - vehicles and boats - tools and machinery A. Cash Value v. Equity Value The value of an asset may be its cash or equity value. In general, assets that have a monetary amount count for cash value, while the value of assets that must be sold in order to obtain cash have equity value. An asset's equity value is the fair market value minus any amount legally owed in a written lien provision. For example, a house that has a fair market value of $100,000, but there is still $70,000 owed under the mortgage. The equity value would then be $30,000. B. CASH EXCLUSIONS Some forms of cash payments are not counted as assets. This can be for the month received and sometimes also in the following month. For example, an Earned Income Tax Credit (EITC) payment does not count as an asset in the month received and the month after. Therefore, if the client spends it down below the applicable asset limit before two months have gone by, his/her benefits will not be effected. Clients must be made aware of the deadlines in order to pay off bills or purchase exempt assets in a timely fashion. Otherwise, they may exceed the asset limits and lose benefits. C. JOINT ASSETS Jointly-owned assets are those that have more than one owner. Whether or not it counts as an asset depends upon whether it is available to the client and has cash or equity value. The asset is unavailable if an owner cannot sell her share without the other owner's consent AND the other owner does not agree to the sale. D. LUMP SUMS / ACCUMULATED BENEFITS (PEM 500) For most programs, lump sums and accumulated benefits are assets starting the month received. Only the portion intended as payment for the current month can be counted as income. For Medicaid, lump sums and accumulated benefits are income in the month received. E. DIVESTMENT Divestment is a transfer of resources by a client or spouse that is within a specified time, is for less than fair market value, and is not listed under "Transfers that are not divestment" PEM 405. Divestments result in a penalty period, NOT ineligibility. During the penalty period, Medicaid will not pay the client's costs for Long Term Care services (nursing homes) and/or home and community-based services. Medicaid will pay for other MA-covered services. Example: Client is applying for Medicaid. He gives his brother half interest in real estate for no compensation. This is a transfer that would be considered divestment, as the client gave away something of value and received nothing in return. Example: A transfer to the client's blind or disabled child is a transfer but not considered divestment. However, if an ONGOING Medicaid recipient has excess assets, and closure is initiated, the client can regain eligibility if he/she disposes of those extra assets. This can be spent on medical expenses, living costs, and other debts, and is not considered divestment as long as the client does not give away the asset and receive less than its value in return. II. INCOME Upon application for benefits, the client's case must be budgeted by the caseworker in order to determine if the client is eligible for benefits and in what amount. Income is of three main types: countable earned, countable unearned, and excluded. Countable income is the gross amount. Garnished amounts are included in the gross even if taken out of the paycheck, including income withheld for child support. A. MONTHLY REPORTING Certain groups of clients must report their income every month to their caseworker. This income is used to budget the amount of benefits they will receive. Income budgeting is generally done prospectively. Any changes in household income or composition must be reported to DHS within 10 days. III. NON-FINANCIAL ELIGIBILITY FACTORS To be eligible for program benefits, certain non-financial eligibility factors must be met. Example: Minor parents must live in an adult-supervised living arrangement. A minor parent and the dependent child in his or her care must live with the minor parent's parent, stepparent, or legal guardian or have good cause to live elsewhere. If good cause is shown, the minor must still live in an adult-supervised living arrangement. Example: A minor parent who has not completed high school must attend school full- time or show good cause why he/she cannot. A. CHILD SUPPORT COOPERATION ISSUES DHS policy states that parents have a responsibility to meet their children's needs by providing support or cooperating with the Agency, the Friend of the Court and Prosecuting Attorney to obtain support from the absent parent. Absent parents are required to support their children. Clients are expected to cooperate in order to be eligible for benefits. Cooperation is required in all phases of the process to establish paternity and obtain support unless good cause is shown. If a client claims good cause for not cooperating, the claim must be supported by written evidence. If written evidence is not available the caseworker is required to conduct an investigation to develop the evidence and establish whether the claim is credible. Good cause may be established in: - Cases in which establishing paternity/securing support would harm the child; OR - Cases in which there is danger of physical/emotional harm to the child or client. Failure to cooperate without good cause will result in disqualification. The person who has failed to cooperate will be removed from the grant. In order to qualify for Family Independence Program (FIP) and Food Assistance, a parent or guardian must cooperate in establishing paternity and collecting child support for the minor children in the home. Failure to cooperate with paternity and child support requirements makes the non- cooperating adult ineligible for benefits. Continued noncooperation with child support enforcement or paternity actions (for four consecutive months) no longer will result in termination of the entire family's Food Assistance. Only the person failing to cooperate will be taken off of Food Assistance. The remainder of the family will remain eligible for Food Assistance, but their Food Assistance amount will be budgeted as if their FIP had not stopped. The amount of the discontinued FIP grant will continue to be counted in the family's Food Assistance budget until 12 months have passed; or their Food Assistance case has been closed for a full month; or eligibility for FIP is reestablished or cooperation or good cause for non-cooperation is established. IV. Family Self-Suffiency Plan (FSSP) A. All recipients of FIP are required to help develop and participate in a Family Self- Sufficiency Plan (FSSP). The Family Automated Screening Tool (FAST) was created to help caseworkers evaluate the needs of a family in order to help them achieve independence. The FAST is a 50-question, web-based survey divided into four sections. These include Client Information, Strengths and Weaknesses, Barriers and Referrals and Goals and Activities. Once an application for assistance is filed, the applicant has 30 days in which to complete the Fast and 60 days to complete the FSSP. If the applicant does not meet these deadlines, he/she will be non-compliant and sanctioned ( see PEM 233A and 233B). V. Work In order to be eligible for benefits, recipients are required to participate in Work First/JET (Jobs, Education, Training) programs unless they are deferred. This includes training, employment, and attending orientation for all recipients of FIP and FIP- related Food Assistance. (PEM 230A) A. Work Requirements The State of Michigan requires work participation of up to 40 hours per week for all participants. However, the Michigan Works Agencies must first ensure that the participant population has met the minimum federal work participation requirements. The federal minimum required weekly hours for each family size are as follows: Single-parent family with a child under the age of six.....................20 Single-parent family without a child under the age of six................30 Non-Custodial Parents......................................................................30 Two-parent family not utilizing federally funded child day care.....35 Two-parent family utilizing federally funded child day care...........55 B. GOOD CAUSE REASONS FOR NON-COMPLIANCE (PEM 233A) Recipients who do not have a deferral and are not complying with Work First requirements must show good cause for non-compliance or else face sanctions or denial of benefits, depending on when the non-compliance occurs. Good cause is a valid reason for failing to participate in employment-related activities or refusing suitable employment. See the list at PEM 233A, pages 3-4. C. DEFERRALS A deferral means that the client is NOT required to participate in WORK FIRST at this time. Clients meeting one of the criteria listed below are deferred for FIP. Keep in mind that deferrals may be different for FIP clients and those who are Food Assistance only (PEM 230). 1. a person who is under 16 or at least 65; 2. The mother of a child under the age of three months; 3. Dependent children ages 16-17 who are full-time students in elementary or high school, and 18-19 year olds expected to graduate before age 20; 4. A minor parent who is attending elementary or high school full-time; 5. A person employed an average of 25 hours per week or more and earning on average at least the federal minimum wage times 25 hours per week; 6. A person suffering from a physical or mental disability that is expected to last more than 90 days; (This is the State Disability standard, the same as the SSI standard except it is shorter in duration. A person’s deferral status remains intact as long as the person has an appeal pending in her SSI case); persons with mental or physical limitations who do not qualify for SDA or SSI must participate in Work First at a “medically permissible” level, PEM 230 at 9; 7. A person suffering from a disability lasting less than 90 days; 8. A person caring for a disabled child or spouse. The disabled person must be receiving or has applied for SSI or RSDI; the deferred status remains intact as long as the disabled child or spouse has an appeal pending in her SSI case; 9. A person experiencing a temporary critical event, such as homelessness; the deferral may not exceed 90 days; 10. A survivor of domestic violence, defined as: physical injury; sexual abuse; sexual involvement of a dependent child; mental abuse; neglect or deprivation of medical care. The maximum deferral is three months, but may be extended by three month intervals with the approval of an FIA manager. It should be noted that individuals meeting work requirements will have open case files at WorkFirst in the event that they should need services or lose their job. They do not have to participate in WorkFirst activities.