C.F.R. » Title 20 » CHAPTER III—SOCIAL SECURITY ADMINISTRATION › PART 416—SUPPLEMENTAL SECURITY INCOME FOR THE AGED, BLIND, AND DISABLED › Subpart L—Resources and Exclusions

20 C.F.R. § 416.1246

Disposal of resources at less than fair market value

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(a) General. (1) An individual (or eligible spouse) who gives away or sells a nonexcluded resource for less than fair market value for the purpose of establishing SSI or Medicaid eligibility will be charged with the difference between the fair market value of the resource and the amount of compensation received. The difference is referred to as uncompensated value and is counted toward the resource limit (see § 416.1205) for a period of 24 months from the date of transfer.

(2) If the transferred resource (asset) is returned to the individual, the uncompensated value is no longer counted as of the date of return. If the transferred asset is cash, the uncompensated value is reduced as of the date of return by the amount of cash that is returned. No income will be charged as a result of such returns. The returned asset will be evaluated as a resource according to the rules described in §§ 416.1201 through 416.1230 as of the first day of the following month.

(3) If the individual receives additional compensation in the form of cash for the transferred asset the uncompensated value is reduced, as of the date the additional cash compensation is received, by the amount of that additional compensation.

(b) Fair market value. Fair market value is equal to the current market value of a resource at the time of transfer or contract of sale, if earlier. See § 416.1101 for definition of current market value.

(c) Compensation. The compensation for a resource includes all money, real or personal property, food, shelter, or services received by the individual (or eligible spouse) at or after the time of transfer in exchange for the resource if the compensation was provided pursuant to a binding (legally enforceable) agreement in effect at the time of transfer. Compensation also includes all money, real or personal property, food, shelter, or services received prior to the actual transfer if they were provided pursuant to a binding (legally enforceable) agreement whereby the eligible individual would transfer the resource or otherwise pay for such items. In addition, payment or assumption of a legal debt owed by the eligible individual in exchange for the asset is considered compensation.

(d)(1) Uncompensated value—General. The uncompensated value is the fair market value of a resource at the time of transfer minus the amount of compensation received by the individual (or eligible spouse) in exchange for the resource. However, if the transferred resource was partially excluded, we will not count uncompensated value in an amount greater than the countable value of the resources at the time of transfer.

(2) Suspension of counting as a resource the uncompensated value where necessary to avoid undue hardship. We will suspend counting as a resource the uncompensated value of the transferred asset for any month in the 24-month period if such counting will result in undue hardship. We will resume counting the uncompensated value as a resource for any month of the 24-month period in which counting will not result in undue hardship. We will treat as part of the 24-month period any months during which we suspend the counting of uncompensated value.

(3) When undue hardship exists. Undue hardship exists when:

(i) An individual alleges that failure to receive SSI benefits would deprive the individual of food or shelter; and

(ii) The applicable Federal benefit rate (plus the federally-administered State supplementary payment level) exceeds the sum of: The individual's monthly countable and excludable income and monthly countable and excludable liquid resources.

(e) Presumption that resource was transferred to establish SSI or Medicaid eligibility. Transfer of a resource for less than fair market value is presumed to have been made for the purpose of establishing SSI or Medicaid eligibility unless the individual (or eligible spouse) furnishes convincing evidence that the resource was transferred exclusively for some other reason. Convincing evidence may be pertinent documentary or non-documentary evidence which shows, for example, that the transfer was ordered by a court, or that at the time of transfer the individual could not have anticipated becoming eligible due to the existence of other circumstances which would have precluded eligibility. The burden of rebutting the presumption that a resource was transferred to establish SSI or Medicaid eligibility rests with the individual (or eligible spouse).

(f) Applicability. This section applies only to transfers of resources that occurred before July 1, 1988. Paragraphs (d)(2) and (d)(3) of this section, regarding undue hardship, are effective for such transfers on or after April 1, 1988.

[48 FR 40885, Sept. 12, 1983, as amended at 50 FR 38982, Sept. 26, 1985; 53 FR 13257, Apr. 22, 1988; 55 FR 10419, Mar. 21, 1990]
Notes of Decisions
Cited in 21 cases (4 in the last 5 years), 1982–2026 · leading case: Roach v. Morse
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Roach v. Morse (2006) ca2 · cites it 2× “See 20 C.F.R. § 416.1246 (e). An applicant may rebut this presumption, however, by showing, for example, that he or she transferred the resource exclusively for another reason.”
Randall v. Lukhard (1982) vawd · cites it 2× “22, 1981), to be codified at 20 C.F.R. § 416.1246 (f). The Amendment does not explicitly address, however, whether § 209(b) states, in contrast to the SSI policy, may apply their new transfer rules to applications and claims filed before July 1, 1981.”
Harrison v. Commissioner, Department of Income Maintenance (1987) conn “) See also 20 C.F.R. § 416.1246 (e). To aid in determining whether a transfer has been made exclusively for some purpose other than establishing eligibility, the defendant has included a provision in the department policy manual, which the plaintiff refers to as the…”
Ruppert v. Secretary of the United States Department of Health & Human Services (1987) nyed “§ 1382b(c); 20 C.F.R. § 416.1246 . If an individual is living in the household of another and is receiving in-kind support and maintenance from that person, the recipient’s SSI benefits may be automatically reduced by one third rather than by the actual or presumed value of such…”
Hallam v. Mo. Dep't of Soc. Servs. (2018) moctapp “Hallam cites no authority for this proposition, and instead relies on her construction of a federal regulation, specifically 20 C.F.R. section 416.1246(a)(1)(A), which provides: An individual (or eligible spouse) who gives away or sells a nonexcluded resource for less than fair…”
Flannagin v. Baggiano (1984) alacivapp “51779 (October 22, 1981) (to be incorporated in 20 C.F.R. § 416.1246 ) a regulation designed to aid implementation of that amendment.”
Will v. Kizer (1989) calctapp “” ( 20 C.F.R. § 416.1246 (f) [interim].) 11 California Code of Regulations states as follows: “(a) The market value of real property shall be (1) or (2), unless the applicant or beneficiary chooses to meet the conditions of (3), and (3) is lower: [fl] (1) The assessed value…”
Johnson v. Ellis (1985) gactapp · cites it 4× “In reaching its decision, the Department applied the presumption, modified in 42 USC § 1382b (c) (1); 20 CFR 416.1246 (e), that a resource given away or sold for less than fair market valúe within twenty-four months of the date of the application for benefits was transferred for…”
Gutierrez v. Bowen (1989) nysd “Mallol without receiving fair value in return, were precluded from receiving SSI benefits for an additional period of 24 months pursuant to 20 C.F.R. § 416.1246 (1988). The ALJ found for plaintiffs on April 25, 1986, concluding that “the funds in the money market account…”
Randall v. Lukhard (1984) ca4 “To like effect is the proposed regulation to be codified as 20 C.F.R. § 416.1246 (e). See 46 Fed.Reg.”
FRERKS BY FRERKS v. Shalala (1994) nyed “§ 1382b(c), and the implementing regulation, 20 C.F.R. § 416.1246 (f), the uncompensated value of such transfers occurring after July 1, 1988 would no longer count towards eligibility.”
King v. Commissioner of Social Security (2019) mad · cites it 5× “13 at 5; and (2) erred in relying upon 20 C.F.R. § 416.1246 in instituting a thirty-six month bar on King’s eligibility to apply for SSI benefits, D.”
Show all 21 citing cases →
— 20 C.F.R. § 416.1246(a)(1)(A) — 1 case
Hallam v. Mo. Dep't of Soc. Servs. (2018) moctapp “Hallam cites no authority for this proposition, and instead relies on her construction of a federal regulation, specifically 20 C.F.R. section 416.1246(a)(1)(A), which provides: An individual (or eligible spouse) who gives away or sells a nonexcluded resource for less than fair…”
— 20 C.F.R. § 416.1246(b) — 1 case
Estate of Charla Brown v. Department of Health and Human Services (2026) michctapp
— 20 C.F.R. § 416.1246(e) — 1 case
Downer v. STATE, DEPT. OF HUMAN RESOURCES, WELFARE (1985) nev
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