HB4979 EngrossedLRB102 22458 KTG 31598 b

1    AN ACT concerning prepaid funeral or burial contracts.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Public Aid Code is amended by
5changing Section 3-1.2 as follows:
 
6    (305 ILCS 5/3-1.2)  (from Ch. 23, par. 3-1.2)
7    Sec. 3-1.2. Need. Income available to the person, when
8added to contributions in money, substance, or services from
9other sources, including contributions from legally
10responsible relatives, must be insufficient to equal the grant
11amount established by Department regulation for such person.
12    In determining earned income to be taken into account,
13consideration shall be given to any expenses reasonably
14attributable to the earning of such income. If federal law or
15regulations permit or require exemption of earned or other
16income and resources, the Illinois Department shall provide by
17rule and regulation that the amount of income to be
18disregarded be increased (1) to the maximum extent so required
19and (2) to the maximum extent permitted by federal law or
20regulation in effect as of the date this amendatory Act
21becomes law. The Illinois Department may also provide by rule
22and regulation that the amount of resources to be disregarded
23be increased to the maximum extent so permitted or required.

 

 

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1Subject to federal approval, resources (for example, land,
2buildings, equipment, supplies, or tools), including farmland
3property and personal property used in the income-producing
4operations related to the farmland (for example, equipment and
5supplies, motor vehicles, or tools), necessary for
6self-support, up to $6,000 of the person's equity in the
7income-producing property, provided that the property produces
8a net annual income of at least 6% of the excluded equity value
9of the property, are exempt. Equity value in excess of $6,000
10shall not be excluded. If the activity produces income that is
11less than 6% of the exempt equity due to reasons beyond the
12person's control (for example, the person's illness or crop
13failure) and there is a reasonable expectation that the
14property will again produce income equal to or greater than 6%
15of the equity value (for example, a medical prognosis that the
16person is expected to respond to treatment or that
17drought-resistant corn will be planted), the equity value in
18the property up to $6,000 is exempt. If the person owns more
19than one piece of property and each produces income, each
20piece of property shall be looked at to determine whether the
216% rule is met, and then the amounts of the person's equity in
22all of those properties shall be totaled to determine whether
23the total equity is $6,000 or less. The total equity value of
24all properties that is exempt shall be limited to $6,000.
25    In determining the resources of an individual or any
26dependents, the Department shall exclude from consideration

 

 

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1the value of funeral and burial spaces, funeral and burial
2insurance the proceeds of which can only be used to pay the
3funeral and burial expenses of the insured and funds
4specifically set aside for the funeral and burial arrangements
5of the individual or his or her dependents, including prepaid
6funeral and burial plans, to the same extent that such items
7are excluded from consideration under the federal Supplemental
8Security Income program (SSI). At any time after submitting an
9application for medical assistance and before a final
10determination of eligibility has been made by the Department,
11an applicant may use available resources to purchase one of
12the prepaid funeral or burial contracts exempted under this
13Section.
14    Prepaid funeral or burial contracts are exempt to the
15following extent:
16        (1) Funds in a revocable prepaid funeral or burial
17    contract are exempt up to $1,500, except that any portion
18    of a contract that clearly represents the purchase of
19    burial space, as that term is defined for purposes of the
20    Supplemental Security Income program, is exempt regardless
21    of value.
22        (2) Funds in an irrevocable prepaid funeral or burial
23    contract are exempt up to $5,874, except that any portion
24    of a contract that clearly represents the purchase of
25    burial space, as that term is defined for purposes of the
26    Supplemental Security Income program, is exempt regardless

 

 

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1    of value. This amount shall be adjusted annually for any
2    increase in the Consumer Price Index. The amount exempted
3    shall be limited to the price of the funeral goods and
4    services to be provided upon death. The contract must
5    provide a complete description of the funeral goods and
6    services to be provided and the price thereof. Any amount
7    in the contract not so specified shall be treated as a
8    transfer of assets for less than fair market value.
9        (3) A prepaid, guaranteed-price funeral or burial
10    contract, funded by an irrevocable assignment of a
11    person's life insurance policy to a trust, is exempt. The
12    amount exempted shall be limited to the amount of the
13    insurance benefit designated for the cost of the funeral
14    goods and services to be provided upon the person's death.
15    The contract must provide a complete description of the
16    funeral goods and services to be provided and the price
17    thereof. Any amount in the contract not so specified shall
18    be treated as a transfer of assets for less than fair
19    market value. The trust must include a statement that,
20    upon the death of the person, the State will receive all
21    amounts remaining in the trust, including any remaining
22    payable proceeds under the insurance policy up to an
23    amount equal to the total medical assistance paid on
24    behalf of the person. The trust is responsible for
25    ensuring that the provider of funeral services under the
26    contract receives the proceeds of the policy when it

 

 

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1    provides the funeral goods and services specified under
2    the contract. The irrevocable assignment of ownership of
3    the insurance policy must be acknowledged by the insurance
4    company.
5    Notwithstanding any other provision of this Code to the
6contrary, an irrevocable trust containing the resources of a
7person who is determined to have a disability shall be
8considered exempt from consideration. A pooled trust must be
9established and managed by a non-profit association that pools
10funds but maintains a separate account for each beneficiary.
11The trust may be established by the person, a parent,
12grandparent, legal guardian, or court. It must be established
13for the sole benefit of the person and language contained in
14the trust shall stipulate that any amount remaining in the
15trust (up to the amount expended by the Department on medical
16assistance) that is not retained by the trust for reasonable
17administrative costs related to wrapping up the affairs of the
18subaccount shall be paid to the Department upon the death of
19the person. After a person reaches age 65, any funding by or on
20behalf of the person to the trust shall be treated as a
21transfer of assets for less than fair market value unless the
22person is a ward of a county public guardian or the State
23Guardian pursuant to Section 13-5 of the Probate Act of 1975 or
24Section 30 of the Guardianship and Advocacy Act and lives in
25the community, or the person is a ward of a county public
26guardian or the State Guardian pursuant to Section 13-5 of the

 

 

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1Probate Act of 1975 or Section 30 of the Guardianship and
2Advocacy Act and a court has found that any expenditures from
3the trust will maintain or enhance the person's quality of
4life. If the trust contains proceeds from a personal injury
5settlement, any Department charge must be satisfied in order
6for the transfer to the trust to be treated as a transfer for
7fair market value.
8    The homestead shall be exempt from consideration except to
9the extent that it meets the income and shelter needs of the
10person. "Homestead" means the dwelling house and contiguous
11real estate owned and occupied by the person, regardless of
12its value. Subject to federal approval, a person shall not be
13eligible for long-term care services, however, if the person's
14equity interest in his or her homestead exceeds the minimum
15home equity as allowed and increased annually under federal
16law. Subject to federal approval, on and after the effective
17date of this amendatory Act of the 97th General Assembly,
18homestead property transferred to a trust shall no longer be
19considered homestead property.
20    Occasional or irregular gifts in cash, goods or services
21from persons who are not legally responsible relatives which
22are of nominal value or which do not have significant effect in
23meeting essential requirements shall be disregarded. The
24eligibility of any applicant for or recipient of public aid
25under this Article is not affected by the payment of any grant
26under the "Senior Citizens and Disabled Persons Property Tax

 

 

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1Relief Act" or any distributions or items of income described
2under subparagraph (X) of paragraph (2) of subsection (a) of
3Section 203 of the Illinois Income Tax Act.
4    The Illinois Department may, after appropriate
5investigation, establish and implement a consolidated standard
6to determine need and eligibility for and amount of benefits
7under this Article or a uniform cash supplement to the federal
8Supplemental Security Income program for all or any part of
9the then current recipients under this Article; provided,
10however, that the establishment or implementation of such a
11standard or supplement shall not result in reductions in
12benefits under this Article for the then current recipients of
13such benefits.
14(Source: P.A. 97-689, eff. 6-14-12; 98-104, eff. 7-22-13.)