Legal basis: 20 CFR 416.1207
A lump sum payment is a one-time payment from a source such as, but not limited to, an insurance policy settlement, sale of property, Social Security back pay, income tax refund, or inheritance.
Lump sum payments received are counted as income in the month of receipt. The amount of funds retained until the first of the following month, are then counted as a resource.
Example: Participant receives $2500 inheritance September 1. The $2500 will be entered as income for the month of September only. During the month of September, the participant spends $1000 of the inheritance. On October 1, the remaining $1500 is counted as a resource.
If an individual sells, exchanges, or replaces an existing resource, the funds received are not income. They are still considered to be a resource. For example, when an individual sells a boat, the funds received are an exchange in resources, not a source of income.
Note: Staff should determine if funds are an actual one-time payment or ongoing self-employment income due to sales of property or capital gains.