Selling or giving resources away

If subject to the resource rule — unlikely in Califoria, where resource limitations have been all but removed — a household cannot get SNAP benefits if it has too many resources. The household may face a penalty if it gives away resources in order to qualify for benefits, or if it sold resources for less than they were worth in order to meet the resource limit. [MPP § 63-501.6.]

Where resource rules remain applicable, the county will ask the applicant for SNAP benefits if he sold or gave away any resources in the last three months. [7 C.F.R. § 273.8(h)(1); MPP § 63-501.61.] If the person did, the county will determine whether the person got rid of the resource in order to get SNAP benefits. This requires a finding of intent. If the county makes this finding, as a penalty the person will not be able to get benefits for a period of time. The same thing happened if a recipient gets rid of a resource after starting to get benefits. [7 C.F.R. § 273.8(h)(1), (4); MPP § 63-501.61.]

However, the penalty does not automatically apply every time someone gets rid of a resource. A person remains eligible for SNAP benefits after selling or giving away something if:

  • The person did not get rid of the resource so that he could get SNAP benefits, but rather did it for some other reason. For example, if someone had $3,500 in cash and gave $2,000 to his brother so he could have an emergency operation or to repay the brother for a loan, then the applicant could still get SNAP benefits if otherwise qualified. [See 7 C.F.R. § 273.8(h)(2)(iv); MPP § 63-501.624.];
  • The thing the person got rid of did not itself count as a resource, i.e., it was an “excluded” resource at the time of the transfer. [7 C.F.R. § 273.8(h)(2)(i); MPP § 63-501.621.];
  • The thing the person got rid of counts as a resource but was not worth enough, either by itself or when added to other resources, to keep the household from being eligible. [7 C.F.R. § 273.8(h)(2)(i); MPP § 63-501.621.] For example, someone could still get SNAP benefits if she gave a friend $200 when the household’s total counted resources are only $700. (And remember, categorically eligible households in California do not have to meet a CalFresh resource-limitation test.);
  • The person sold or traded the resource at or close to its fair market value. [7 C.F.R. § 273.8(h)(2)(ii); MPP § 63-501.622.];
  • The person got rid of the resource more than three months before applying for SNAP benefits. [7 C.F.R. § 273.8(h)(1); MPP § 63-501.61.];
  • The person sold or gave the resource to someone else in the SNAP household. [7 C.F.R. § 273.8(h)(2)(iii); MPP § 63-501.623.];

If transfer of the resource does not meet one of these exceptions, above, the county welfare department will then decide how long the penalty period should be. The county makes the penalty determination by going through the following steps:

  1. Find the value of the property that was sold or given away.
  2. Subtract any loans or other obligations on the property given away and any other part of it that does not count as a resource (such as the first $4,650 that you can deduct from the fair market value of some licensed vehicles). [See 7 C.F.R. § 273.8(c)(2), (i)(4); MPP § 63-501.12; MPP § 42-215.41.]
  3. Subtract the fair market value of anything received in exchange for the property given away. [7 C.F.R. § 273.8(h)(2)(ii), (4); MPP § 63-501.622.]
  4. Add all other countable resources, including the value of anything received in exchange for the property given away, if that is a countable resource. [7 C.F.R. § 273.8(h)(4); MPP § 63-501.64.]
  5. Subtract the applicable resource limit for the household (e.g., $3,250 if someone in the household is over 60 and $2,000 for all other households). [7 C.F.R. § 273.8(h)(4); MPP § 42-207.]
  6. Take the total from the preceding steps and check it against the list below to see how long the county welfare department can keep the household off SNAP benefits because someone in the household improperly transfered a resource in order to get benefits.

Amount over resource limit Months of ineligibilty

  • $0 to $249.99 1 month
  • $250 to $999.99 3 months
  • $1,000 to $2,999.99 6 months
  • $3,000 to $4,999.99 9 months
  • $5,000 or more 12 months