When a person gives up the right to a stream of income, such as a pension, the amount of uncompensated value is the lifetime value of the income that would have been received.
The transfer date is the date that the income stream was assigned to someone else or otherwise given up.
Whether or not the assignment results in a transfer depends on whether the assignment is revocable or irrevocable.
A revocable assignment of income or resources is not a transfer. Instead, the assets are considered constructively received.
Irrevocable Assignment: Irrevocably assigned means a resource or income has been placed in another's name and only that person can take the action needed to make the resource or income available to the customer.
If a customer irrevocably assigns a resource to another party, the assignment is a transfer. When a person irrevocably assigns the right to all future payments from a source, the total long-term value of the transferred income is added together to determine the amount of the transfer.
When a person irrevocably assigns some income payments, but does not assign the right to all future payments from that source, the assigned payments are considered constructively received income and are counted as the customer’s income.
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Term |
Definition |
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Assignment |
To designate or set a resource aside for a specific purpose. It may result in the customer no longer owning all or part of an asset. An assignment might be revocable or irrevocable. |
When a countable stream of income has been transferred, documents need to be provided to prove:
The date of the transfer;
The person who owned the item both before and after the transfer;
The type of assignment; revocable or irrevocable assignment.
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Program |
Legal Authorities |
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ALTCS |
42 USC 1396p(c)(1)(A) AAC R9-28-401 and 409 |