Section 14 Assets
14.1.1 Real Property - Legislative Authority and Definition
"Real Property" is defined as fixed, permanent or immovable assets, specifically, land for which legal title is held and any buildings located on the land.
The real property of an applicant, participant or dependant, and the net amount of all income from such property, falls under the definition of financial resources in the Act.
14.1.2 Allowable Real Property Assets
Section 8(1) of the Regulation lists exclusions from the calculation of the financial resources of the applicant or participant including "equity in the home in which the applicant or participant resides and the property on which it is located that is essential to the home."
Allowable real property assets are considered to be the property essential to the residence of the applicant or participant. In rural areas, this will usually mean the quarter section on which the farm house is located. In urban, suburban and recreational areas, residential title is usually defined by lot with a minimum frontage specified in the municipal zoning by-laws.
Allowable real property currently owned and occupied by the applicant as his or her home is considered a resource only insofar as it provides shelter at the cost of the upkeep assistance provided for in Schedule B, section (1)(D) of the Regulation.
See section 14.1.5 for the circumstances under which allowable home property should be regarded as a revenue resource.
14.1.3 Excess Property Defined
Any real property owned by the applicant or participant which is not essential to his or her residence shall be considered excess property. Generally, this shall include any land owned by the applicant or participant which can be sold separately from the home property.
As an illustration of some unusual possibilities, there may be farm cases in which the residential home quarter section is divided by a road or public right of way, rendering some portion of the usually allowable quarter section as excess property. Conversely, in urban areas, an oversized lot surveyed to accommodate underground utility services, for example, may not conform to standard definitions of allowable property, but cannot be subdivided for sale of any "excess" portion. In still other circumstances, changes in zoning by-laws may diminish municipal lot requirements permitting subdivision and creating an excess property situation where one did not previously exist.
14.1.4 Conversion of Excess Real Property
When an applicant or participant of income assistance has real property assets in excess of those allowable, the excess should be converted to cash for current maintenance.
Section 4.2 of the Regulation provides authority for granting assistance for a period of up to four months to allow time to convert real property to cash.
Where assistance is granted in accordance with section 4.2 of the Regulation, participants must be advised in writing that they have assets in excess of those normally permitted, that all reasonable action must be taken to dispose of the excess asset and that up to four months is permitted for disposition. Regular follow-up must take place to monitor progress in asset conversion.
Where legal complications prevent the sale of the asset within four months, care must be taken to ensure participants understand the policy, but also that special consideration be given to extend assistance to avoid undue hardship pending the liquidation of the asset.
The District Director of EIA has been delegated authority under section 5(2) of the Regulation to approve continued assistance beyond the initial four-month period under exceptional circumstances. Approval may be granted only when:
- legal complications prevent the sale (e.g., pending settlement of Wills, estates, marital assets)
- a buyer is unavailable; or
- other circumstances, in the opinion of the District Director, warrant consideration (e.g., the participant will temporarily be in receipt of income assistance).
The District Director must maintain a record of files where assistance has been approved beyond the initial four-month period, provide the rationale for approval and indicate the subsequent review date. This record will be reviewed periodically by Central Office.
14.1.5 Real Property as a Revenue Source
Real property should be regarded as a resource for current income when:
- the real property currently owned and occupied by the applicant or participant as his or her home is also a farm (residential quarter section) or business premises; or
- the real property in excess of the allowable is retained by the applicant or participant for any reason.
If, under the participant's management, such property is not producing any revenue or only nominal revenue, the property should be considered as a resource for which funds for current maintenance can be realized by renting it out.
14.2.1 Personal Property - Legislative Authority and Definition
"Personal Property" is defined as things temporary or movable, specifically, material possessions and liquid assets.
Personal property of an applicant, participant or dependant, and the net amount of all income from such property is included in The Manitoba Assistance Act definition of "financial resources" (section 1).
14.2.2 Conditional Exemptions - Personal Property for Business Use
Section 8(1)(a)(iii) of the Regulation provides for the exemption of inventory and equipment essential to carry on a viable farming or business operation and may be exercised only under conditions outlined in section 17 of the manual (Self-Employment Income Policies).
14.2.3 Excess Personal Property
Items of personal property which are not essential to the applicant, or dependants, for purposes of basic maintenance may be considered as available for current maintenance, either as collateral for loans or through outright sale.
Examples of such assets might be snowmobiles, boats or other such recreational equipment, business or farm equipment, or livestock in accordance with conditions outlined in section 17 of the manual.
14.2.4 Automobiles as Personal Property
Although assistance is generally not provided for any costs associated with the operation of automobiles, applicants or participants are not required to dispose of automobiles as excess personal property.
For policies related to assistance and vehicle operating costs for health and work transportation, see sections 22.3.6 and 21.2.1 respectively.
14.2.5 Personal Property Transferred or Assigned within the Last five years
When the District Director of EIA deems an applicant or participant, or a dependant of an applicant or participant, has obtained inadequate return for transfer or assignment of personal property (including liquid assets) within five years prior to application or subsequent to enrolment, the property's original value should be estimated. The difference between the actual sale price and the estimated value should be considered as invested at the current deemed income rate, as detailed in section 15.2.9, with the resulting income considered as available to the applicant or participant for his/her current maintenance.
14.3.1 Liquid Assets - Legislative Authority and Definition
Liquid assets are a form of personal property and are included in the statutory definition of "financial resources" in The Manitoba Assistance Act. They are to be treated as a resource available to the participant, unless they fall within one or more of the exclusions found in section 8(1)(a) of the Regulation.
Liquid assets consist of cash or assets that are capable of ready conversion into cash. Some of the more common forms which liquid assets might take include cash on hand in a bank or other financial institution, treasury bills, savings bonds, term deposits, guaranteed investment certificates, mutual funds, mortgages, corporate bonds, debentures and shares.
Most forms of investment of EIA participants are capable of conversion into cash within a reasonable period of time, through withdrawal, sale or use of the asset as collateral for securing a loan. Premature withdrawal may be accompanied by an interest penalty, however, the principal amount is redeemable in almost all cases. Exemptions include those forms of investments which are described in their terms and conditions, as non-commutable, non-refundable and non-transferable, and some specified RRSPs.
14.3.2 Allowable Liquid Assets
Policy
Hepatitis C Compensation Exemptions (PDF 75 KB)
In accordance with section 8(1)(a) of the Regulation, liquid assets to be excluded from all calculations of the financial resources of the applicant or participant are as follows:
For the procedure to be followed when an applicant or participant reports "locked in" or "inaccessible" financial assets, refer to the "Application" section 6.4.
1. Liquid Assets
Note: The liquid asset provision applies at any time during a participant's period of enrolment. As it is not a one-time only allowable provision, a participant may use his or her liquid assets and then replenish the funds to the allowable liquid asset amounts listed below.
The following liquid asset exemption levels apply to all case categories: up to $4,000 per person on an EIA case, up to $16,000 per case.
The application of the liquid asset exemption should be interpreted within the context of family size and is not to be based upon assigning ownership of specific assets among members of a family. For example, in a four-person family, one person might have $5,000.00 in assets, another might have $3,000.00 in assets with the remaining two persons each having $4,000.00. All of these assets would fall under the total family exemption of $16,000.00. Therefore, the person with $5,000.00 would not have to dispose of $1,000.00 in assets in order to ensure eligibility for the family.
2. Children's Trust Funds
Up to $40,000.00 in property held in trust for a dependent child of an applicant or participant or for an applicant or participant under section 5(1)(f) of the Act is exempt if the trust meets the criteria found in section 8(1)(a)(vii) of the Regulation.
A more detailed discussion of this exemption is provided under "Trust Funds" in this section of the manual. For the procedural treatment of assets held in trust on a participant's behalf, see the "Application" section of the manual (section 6.4 ).
3. Age of Majority Allowance
Special consideration is required in the case of applying the liquid asset provision to the funds provided by child-caring agencies to children discharged from care at age eighteen.
4. Funeral Plans, RRSP, Pension and Life Insurance Plans
The cash surrender value of these plans are considered within the available liquid asset provisions. Funds in excess of the liquid asset provision are considered and available resource in the calculation of benefits.
5. Gifts
Non-disabled adults and all children may receive non-recurring gifts received while in receipt of income assistance or general assistance of a value of up to $100.00 each as per section 8(1)(a)(viii) of the Regulation.
Each adult participant with a disability in receipt of income assistance may receive ongoing cash contributions of up to $500 per month from family or friends that will not count against their monthly benefits. Income not exempted by regulation such as child maintenance payments cannot be considered as family contributions. Contributions in excess of $500 per person cannot be averaged over a period of time; cash gifts are fully considered in the month in which they are received. Funds accumulated in excess of allowable liquid assets are considered a financial resource to be considered in the calculation of their benefits.
6. Federal Compensation Payments
Persons infected with the HIV virus through blood transfusions or the use of blood products as per section 8(1)(a)(ix) of the Regulation.
14.3.3 Trust Funds
Policy
Disability Exemption of $100,000 (PDF 177 KB)
Funds held in trust for any applicant or participant are to be regarded initially as liquid assets which may be available (in whole or in part) for support of the designated trust beneficiary.
Trust funds may arise in several ways:
- One type of trust situation arises when persons are legally incapable of making decisions on their own behalf due to age or mental incapacity. In such cases, a Trustee (frequently the Public Trustee) manages the beneficiary's financial affairs, making application on the beneficiary's behalf for benefits to which the beneficiary is entitled (e.g., tax credits, transfer payments). The resulting funds are held in trust and disbursed to the beneficiary as the trustee deems fit. This type of trust is virtually always accessible.
- Trust funds can also be created through the placement of a lump sum under the control of a Trustee for the benefit of a beneficiary. When an EIA applicant, any dependant of an applicant or any income assistance participant is the beneficiary of a trust of this nature, the case should be referred to a District Director for a decision as to the accessibility of the trust funds.
District Directors should make every reasonable attempt to obtain a copy of the document (usually a Will and/or Court Order) establishing the trust. Since the fund's accessibility is a matter of the interpretation of this document's terms, a legal opinion may be sought as to its appropriate interpretation.
If a trust fund is considered accessible, the District Director must then decide whether any portion is exempt from consideration because of liquid asset exemptions and/or the infant trust exemption.
Applying Liquid Asset Exemptions to Trust Funds
Liquid asset exemptions relating to trusts should generally be applied in a way which does not jeopardize the eligibility of household or family members not designated as beneficiaries of the trust. The liquid asset provisions stated in section 8(1)(a) of the Regulation apply to all available trust funds. These funds are subject to periodic review and are non-exempt in the event of accumulation beyond the amount excluded by Regulation.
With the exception of the province's four mental health facilities, (Brandon Mental Health Centre, Selkirk Mental Health Centre, Eden Mental Health Centre and the Health Sciences Centre Psychiatric Department), reviews normally occur annually. If excess liquid assets exist at the time of the annual review, the amount in excess should be forwarded to the Department, or the file should be closed until the excess is expended and the person regains eligibility. Where excess monies are derived from an exempted income source (e.g., tax rebates), the income is exempt in the month in which it is received and may be exempted for up to one year at the discretion of the District Director. Once the exemption period has expired, income that remains unexpended is treated as a liquid asset. See also section 14.3.1 on "Liquid Assets - Reference and Definition".
If the excess funds were derived from a non-exempted source (e.g., a gift or windfall), the funds should be considered as available for the participant's maintenance. Also, where such funds become available to the participant between annual reviews, they should be reported in accordance with section 12.1 of the Regulation.
If a request for special needs or excess special needs is received, the status of a participant's non-exempt trust account should be considered. Depending on the time of the request in relation to the time of the last annual review, it may be appropriate to update the status of the trust account. If excess assets exist they should be considered before approving special or excess special needs request. See also section 21.1 for Special Needs Approval.
Children's Trust Exemption
Effective June 7, 1991, an exemption is available for up to $40,000.00 of assets held in trust on behalf of minor income assistance participants where certain criteria are met. The legislative authority for this exemption is in section 8(1)(a)(vii) of the Regulation.
The rationale for this exemption is to permit child beneficiaries who have experienced injury and/or an important loss in their life for which they have been compensated financially, to retain funds which will help give them a "better start in life" upon reaching adulthood. All of the following criteria must be met to establish the availability of the children's trust exemption:
- the trust fund arose through one (or more) of the following: compensation for personal injury suffered by the child;
1. compensation for personal injury suffered by the child;
2. compensation for the death of a parent; and/or,
3. an inheritance from a parent.
A "parent" may be a custodial or non-custodial parent, or a person who has performed a parental role in the child's life. The latter will normally refer to someone who has served as the child's custodian or guardian in the stead of one or both parents. Essentially, the loss in question should be of a tangible as well as an emotional nature (i.e., the loss of care and guidance as well as companionship). - the terms of the trust are set out in writing.
- the trust fund will normally remain intact until the child reaches the age of majority. Where the District Director is of the opinion that a socially important purpose would be served through the expenditure of trust funds, consent may be given for the withdrawal of trust funds. Examples of a "socially important purpose" might include the purchase of goods and/or services not otherwise available through the EIA program to help overcome the child's disabilities and/or promote future independence.
- the exemption is applicable only to the first $40,000.00 of combined principal and accrued interest of the trust fund.
Trust Funds Not Immediately Accessible
Where a trust fund is deemed not to be immediately accessible, the District Director may: grant eligibility for up to 4 months pending the release of funds; or,
- grant eligibility for up to 4 months pending the release of funds; or,
- grant eligibility for an indefinite period of time if it is not feasible to release funds from a trust in the foreseeable future.
The only legislative authority for granting eligibility in such circumstances is section 5(2) of the Regulation, which requires the approval of the Minister's designate. A trust fund should not be characterized as indefinitely inaccessible without first examining the terms which govern the trust, and submitting these for a legal interpretation if and where appropriate.
Since the treatment of trusts is an area in which legal policy is constantly evolving, District Directors should consult periodically with Central Office on these matters.
14.3.4 Potential Assets in Pending Settlements
Where current need and eligibility for income assistance are established, except for the possibility of receiving a settlement on an existing claim, income assistance should be granted without immediate regard for the potential or pending asset.
The Department does not attempt recovery of income assistance paid to participants for the period from date of enrolment to the time at which assets become available, unless those assets are assignable under another Act, agreement or program.
When potential assets such as accident claims are realized, income assistance should be discontinued if assets are such that the participant becomes ineligible.
14.3.5 Exempted Income (E.G. Tax Credits)
Income received by EIA participants from sources described in section 8(1)(b) of the Regulation (e.g., the Manitoba Cost of Living Tax Credit, the Manitoba Property Tax Credit, the federal Child Tax Credit, Child Tax Benefit and Goods and Services Tax Credit) shall be exempt in the month in which it is received. A reasonable time may be allowed for the participant to expend these monies that are in excess of the liquid asset provision. A reasonable time may be interpreted as up to four months after receipt of the exempted income funds. The District Director has the discretion to extend this exemption for up to one year. Once the exemption period has expired, income that remains unexpended is subject to the liquid asset limits set out in section 8(1)(a) of the Regulation.
In situations where special needs requests cannot be approved, participants should be counselled, where appropriate, to use currently exempt sources of income to meet those needs.