ANNUITIES (FAM)

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An annuity is a financial investment on which a person receives fixed payments for a lifetime or a specified number of years.

For purposes of determining eligibility for all categories of financial assistance, an annuity owned by an individual applying for assistance must:

• have a principal which is not accessible to the individual;

• be actuarially sound in that the expected return on the annuity corresponds with the life expectancy of the individual (See Adult Assistance Manual PART 420, RESOURCE TABLES: SSA LIFE EXPECTANCY TABLES: MALE, or Adult Assistance Manual PART 420, RESOURCE TABLES: SSA LIFE EXPECTANCY TABLES: FEMALE).

Treatment: Excluded Resource. Forward a copy of the annuity to the Office of Finance, Estate Recoveries Unit.

Exception: If the annuity does not meet the conditions indicated above, the entire principal of the annuity is considered a countable resource.

NOTE: Monthly disbursements from the annuity count as unearned income to the individual. (See PART 511, COMMON TYPES OF INCOME: ANNUITIES)

References: He-W 656.04