California Department of Social Services - State Hearings Division
Notes from the Training Bureau - December 10, 2002

This ACWDL provides answers to questions regarding work-related pension funds, IRAs, Keoughs and other work-related retirement funds. The answers to some of these questions are as follows:

A retirement fund is considered exempt if is held in the name of a family member such as a parent, spouse, child or community spouse who chooses not to receive Medi-Cal or is ineligible for Medi-Cal.

A retirement fund is unavailable if it is in the name of the Medi-Cal beneficiary or applicant and one of several circumstances apply. Those circumstances include:

¨ that the applicant or beneficiary is receiving periodic payments from the fund, or making systematic withdrawals at age 70 and 1/2 or older; or,

¨ the applicant/beneficiary has requested release of funds in the form of payments or a lump sum payment (The balance of the fund is considered unavailable from the first of the month that a request for the release of funds is made); or,

¨ the individual must terminate employment to access the funds; or,

¨ the funds are jointly held with a third party and that party refuses to grant access to the funds.

If the applicant/beneficiary is taking reasonable steps to pursue payments, the funds in a work-related pension fund are deemed unavailable. For example, if an applicant/beneficiary provides verification that he/she sent a letter to an employer requesting release of funds, the funds will be deemed unavailable. If the request for release of funds is denied, the applicant/beneficiary does not have to repeat the request at renewal until the individual reaches age 55 or terminates employment.

The IRS has no requirements for minimum mandatory distributions from Roth IRAs. Thus in order for a Medi-Cal applicant/beneficiary to maintain eligibility for Medi-Cal and have the principal in the Roth IRA considered unavailable, the individual must receive periodic payments from the account that must constitute principal and interest. The individual must provide a letter from the financial institution verifying that interest and principal are being distributed.

If an applicant/beneficiary elects to defer payments from a work-related pension plan, IRA, Keough or other retirement fund, the cash surrender value (i.e., the value of the account less withdrawal penalties) is considered available property. Such property is included in the property reserve.