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State of Wisconsin |
HISTORY |
The policy on this page is from a previous version of the handbook.
Do not count household goods as an asset.
Household goods include both of the following:
Examples of household goods include, but are not limited to, the following:
| Note: |
Items that are acquired or held because of their value or as an investment are not considered household goods (see Section 16.7.1.3 Other Personal Property). |
Do not count personal effects as an asset.
Personal effects are one of the following:
Examples of personal effects include, but are not limited to, the following:
| Note: | Items that are acquired or held because of their value or as an investment are not considered personal effects. |
Both the following are true of personal property that an individual acquires or holds because of its value or as an investment:
Other personal property items include, but are not limited to, the following:
| Example 1: |
Mr. Hollenback received $10,000 from an insurance settlement. Mr. Hollenback paid back creditors with $7,000 and purchased $3,000 in jewelry. Mr. Hollenback does not wear the jewelry. The IM workers must determine whether the jewelry is excluded from resources as a personal effect or is a countable resource in the form of other personal property. Mr. Hollenback's statements establish that the jewelry has no family significance and that he purchased the jewelry for its value as a means to spend down the $10,000. The IM workers correctly determines that the jewelry is not an excludable personal effect because an item purchased for its value cannot be a personal effect. The IM worker correctly determines the jewelry as a countable asset. |
The following information applies except as directed otherwise in Section 16.7.2.1 Reverse Mortgage and Section 16.7.2.2 Loans and Other Contracts Exchanged for Promissory Notes.
If an AG member receives a loan and it is available for current living expenses, count it as an asset. Do this even if there is a repayment agreement. If it is not available for current living expenses, disregard it.
If an AG member makes a loan (except a land contract), treat the repayments as follows:
A reverse mortgage loan is a loan, or an agreement to lend, that is secured by a first mortgage on the borrower’s principal residence. The terms of the loan specify regular payments to the borrower. Repayment (through sale of the residence) is required at the time all the borrowers have died or when they have sold the residence or moved to a new one.
Treat reverse mortgage loan payments to the borrower as assets in the month after the month received. Do not count undisbursed funds (not yet paid to the borrower) as assets. They are considered equity in the borrower’s residence.
| Note | Home equity lines of credit (HELOCs) are treated like reverse mortgages. The available balance of the HELOC is not an asset. The equity value of the property that secures the HELOC is reduced by the HELOC's outstanding balance because it is secured with a lien as with a reverse mortgage. |
The current market value of a promissory note or loan made by an AG member will be assumed to be equal to the outstanding balance, and the promissory note or loan will be a countable asset in a Medicaid eligibility determination unless it cannot be sold.
An applicant who disputes the value used by the IM worker must provide credible evidence from a knowledgeable source that the note is non-negotiable or has a different current market value.
Promissory notes or loans that cannot be sold because they are not negotiable, assignable, enforceable, or otherwise marketable are considered unavailable assets (see Section 17.2.6.15 Promissory Notes, Loans, Land Contracts, and Mortgages regarding divestment policy).
Disregard reimbursements resulting from federal regulatory changes in computing HUD housing rent as income in the month paid and assets in the next month.
An annuity is a purchase contract where the purchaser pays a lump sum or makes periodic payments to a bank or insurance company in return for an expectation of future payments. The annuitant is the person entitled to the payments. These payments may continue for a fixed period or for as long as the annuitant or another designated beneficiary lives, creating an ongoing income stream. The annuity may or may not include a remainder beneficiary clause under which, if the annuitant dies, the contracting entity converts whatever is remaining in the annuity into a lump sum or periodic payments that are paid to a designated beneficiary.
It is most common for an annuity to have cash surrender value during the accumulation phase. The accumulation phase is the period when the investor makes deposits into the annuity to build up its cash value. Some annuities (such as immediate annuities) don’t have an accumulation phase because they are annuitized at the time of purchase.
The pay-out phase (annuitization) begins at the time payments start going to the annuitant in accordance with the settlement option. The settlement option specifies the way the funds from the annuity will be paid out. It involves choosing the amount of each payment, how often payments will be made, and the length of time over which the payments will be made.
If the annuity’s cash value is available for withdrawal (minus any penalty), the annuity can be surrendered. If the terms of the contract do not allow the annuity to be surrendered, it is considered irrevocable.
When an annuity is in the payout phase, payments are only counted as unearned income if the annuity itself is considered an unavailable asset. Annuities that are considered available, countable assets include the following:
To determine the cash value of an annuity that can be surrendered (for example, an annuity in the accumulation phase), use the following formula:
An irrevocable annuity may or may not be considered an available, countable asset, depending on when it was purchased and whether it can be sold on the secondary market.
If an irrevocable annuity was purchased prior to March 1, 2004, it is considered an unavailable asset on the date the settlement option is made final.
If an irrevocable annuity was purchased on or after March 1, 2004, it is only considered unavailable if the owner cannot sell the annuity on the secondary market.
| Note | Even if the annuity contract states that it is “non-assignable” or “non-transferrable,” it may still be possible to sell the rights to the income stream. In general, retirement and pension annuities cannot be sold on the secondary market. |
To verify the availability of an irrevocable annuity purchased on or after March 1, 2004, the agency must check the annuity contract to see if the annuity (or the right to receive the income stream from the annuity) can be sold:
| Example 1 | Cynthia is 83 years old and applying for Medicaid. She purchased an immediate annuity for $110,000 after March 1, 2004. The annuity is paying out and cannot be surrendered. The contract states that it is irrevocable and non-assignable. It appears from the contract that it cannot be sold. The agency verifies this by having the annuity contract reviewed by a company in the annuities market. The company provides the agency with a written statement that it would value Cynthia’s annuity contract at $82,000. Cynthia’s annuity is therefore considered to be an available asset with a value of $82,000, which is the amount used to determine Cynthia’s Medicaid eligibility. The payments from the annuity are not counted as income. |
| Example 2 | Sam is 66 years old and applying for Medicaid. He purchased an immediate annuity for $110,000 after March 1, 2004. The annuity is paying out and cannot be surrendered. The contract states that it is irrevocable and non-transferable. It appears from the contract that it cannot be sold. The agency verifies this by having the annuity contract reviewed by a company in the annuities market. The company provides the agency with a written statement that it places no value on Sam’s annuity contract. Sam’s annuity is therefore considered to be an unavailable asset in determining his Medicaid eligibility. The payments from the annuity are counted as income. Because the annuity is unavailable and was purchased during the look back period, it must be evaluated for possible divestment. |
People applying for or receiving Medicaid long-term care services are required at application and renewal to disclose information about any annuities that meet both of the following criteria:
The following actions are considered substantive changes:
The following actions do not subject an annuity that was purchased prior to January 1, 2009, to the disclosure requirement:
A separate annuity disclosure form (Annuity Information - Disclosure, F-10192) must be completed for each annuity owned by the institutionalized person or their community spouse. This form must also be sent to SSI recipients who are applying for a community-based long-term care program (including Family Care, Family Care Partnership, and PACE). A copy of the completed form and any documents verifying the status of the annuity must be stored in the case file.
If the long-term care applicant or member, their spouse, or representative refuses to disclose the required information related to the annuity, the applicant or member is ineligible for Medicaid long-term care services for failure to cooperate in providing requested information.
After receiving the completed annuity disclosure form, the IM agency must send the Issuer of Annuity - Notice of Obligation (F-10190) to the annuity issuer instructing them to make the Wisconsin Department of Health Services Estate Recovery Program a remainder beneficiary. The issuer must be allowed up to 30 days to confirm the designation has been made.
The Wisconsin Department of Health Services Estate Recovery Program must be the primary remainder beneficiary unless a community spouse, disabled child, or minor child is listed as the primary remainder beneficiary. If a community spouse, disabled child, or minor child is the primary beneficiary, the Wisconsin Department of Health Services Estate Recovery Program must be the secondary remainder beneficiary.
When the issuer responds and indicates that the state has been designated the remainder beneficiary or that there is no death benefit available under this annuity, the annuity must be treated as meeting the designation requirement, and the agency should proceed with the long-term care eligibility determination.
If the issuer does not respond within 30 days of the date when the Notice of Obligation form was sent, the IM agency must contact the issuer by phone and request that they respond within 10 days. If the issuer does not respond within 40 days after the Notice of Obligation form was sent, the agency should contact the CARES Problem Resolution Center for further guidance.
If the form from the annuity issuer indicates that the remainder beneficiary designation change is in process and provides a date by when the designation will be completed, the IM agency should treat this annuity as meeting the designation requirement and proceed with the long-term care eligibility determination. If the issuer fails to confirm that the designation change has been completed by the date indicated on the form, the IM agency must contact the issuer and request that they confirm within 10 days that the changes have been completed. If the issuer has not responded 10 days after the request was made, contact the CARES Problem Resolution Center for further guidance.
Once the state has been designated as the remainder beneficiary, the annuity issuer must notify the local agency about any changes made to that annuity to ensure the annuitant does not change the terms of the annuity beneficiary designation at a later date. The issuer acknowledges this obligation by completing and returning the Notice of Obligation form.
Copies of the completed forms must be saved in the case file.
The IM agency should not make a final decision on the Medicaid long-term care application until one of the following occurs:
A divestment penalty period must be imposed for applicants and members who refuse to cooperate in this annuity beneficiary designation process. The divested amount is the full purchase price of the annuity.
The cash surrender value (CSV) of life insurance is a countable asset. However, there is a limited exception to this rule: For a person who is aged 65 or older, blind, or disabled, the CSV of their life insurance is only counted if the total face value (FV) of all life insurance policies owned by that person exceeds $1,500.
The CSV is the amount that the insurer will pay upon cancellation of the policy before death of the insured or before maturity of the policy. The FV is the amount that is contracted for when the life insurance policy is purchased. It may be described on the policy as the "face value," "amount of insurance," "amount of this policy," "sum insured," or a similar term.
For each person who is aged 65 or older, blind, or disabled, it must be determined if the total FV of all life insurance policies owned by that individual is greater than $1,500. When the total FV is determined, the following must not be included:
If the total FV of the life insurance owned by a person who is aged 65 or older, blind, or disabled is $1,500 or less, the CSV of any life insurance policy owned by that person is an exempt asset, including the CSV of any dividend additions.
For life insurance policies that cannot be excluded under the limited exception, the CSV of the policy, including the CSV or any dividend additions, is a countable asset.
| Example 1 |
Steve (aged 67) and Mary (aged 63) are married. Steve is applying for Medicaid. Both individuals have whole life policies in which dividends are used to purchase individual coverage on the policy ("paid-up additions").
Mary is under the age of 65 and is not blind or disabled. Therefore, it is not necessary to calculate the total FV of her life insurance policies because the limited exception does not apply to her assets. Her whole life insurance policy's CSV of $12,700 is a countable asset for Steve's eligibility determination unless all or part of it can be excluded under other provisions, such as a burial fund. |
| Example 2 |
Siobhan is disabled and has one life insurance policy. The dividends from her policy are deposited into a separate, interest-bearing account.
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A CCRC or Life Care Community typically provides a variety of living arrangements, from independent living through skilled nursing care. Potential residents frequently must pay substantial entrance fees and sign detailed contracts before moving to the community.
Entrance fees paid by an individual to a CCRC or Life Care Community are counted as an available non-exempt asset of the individual for Medicaid eligibility determinations when all of the following conditions apply:
Entrance fees that meet all three conditions described above will be counted as an available non-exempt asset for all Medicaid eligibility determinations for the elderly, blind, and disabled, regardless of whether or not the individual is requesting LTC services. An entrance fee that does not meet all three conditions described above is an unavailable asset.
For Medicaid eligibility determinations, all normal spousal impoverishment rules regarding income and asset allocations for a community spouse are applicable to married couples who reside in a CCRC or Life Care Community, when one spouse resides in the skilled nursing care section of the facility and the other spouse (the community spouse) resides in a more independent living setting. CCRC and Life Care Community contracts are required by federal law to account for spousal impoverishment income and asset allocations to a community spouse before determining the amount of resources that a resident must spend on his or her own care.
Disregard all federal income tax refunds and credits for 12 months following the month of receipt. If there is a remaining, unspent portion of the of the refund or credit after the 12-month disregard period has passed, count that portion as an available asset.
All state income tax refunds and credits are considered available assets starting in the month after the month of receipt.
Disregard all EITC and Child Tax Credits, including advance payments of these credits, in the month received and for 12 months following the month of receipt.
After the 12-month disregard period has passed, count any remaining EITC or Child Tax Credit payments as available, non-exempt assets.
Vehicle refers to any registered or unregistered vehicle used for transportation. Vehicles used for transportation include, but are not limited to, cars, trucks, motorcycles, boats, and snowmobiles.
Equity value is:
Do not increase a vehicle's value by adding the value of low mileage or other factors, such as optional equipment or apparatus for the handicapped.
Occasionally, a vehicle has more than one owner. Some of the owners may be in the FTG while others may not. To find what the FTG’s equity value in the vehicle is, do the following:
Count vehicle values as follows:
| Example 1: | George is applying for Medicaid. He has three vehicles: a car (equity value $2500), a truck (equity value $7500), and a snowmobile (equity value $750). He states that the snowmobile is used only for recreation in the winter. He uses the car and the truck interchangeably for transportation. The truck is excluded in the asset determination as it is used for transportation and has the highest equity value. While the car is also used for transportation, only one vehicle can be excluded. The equity value of the car counts in the asset determination. The equity value of the snowmobile also counts in the asset determination. Even if this was George’s only vehicle, because he states that it is used for recreational purposes only, it would still be a counted asset. |
If an individual owns a vehicle that is temporarily inoperable (e.g., needs repairs) and states that the vehicle will be repaired and used for transportation within the next 12 calendar months, exclude the total value of the vehicle until the repairs are completed. At that point, apply the rules for determining if the vehicle should be excluded.
If an individual states that the vehicle will not be repaired and used for transportation in the next 12 calendar months, count the equity value of the vehicle as a resource.
Money received as a property settlement is always an asset regardless of whether it is paid in one payment or in installments. It is never income.
Lump sum payments (rather than recurring payments) from such sources as insurance policies, veterans benefits, sale of property, Railroad Retirement, unemployment compensation benefits, and retroactive corrective financial aid payments are counted as an asset when received.
The unspent portion of retroactive SSI and RSDI benefits received on or after March 2, 2004, are excluded from resources for the nine calendar months following the month in which the individual receives the benefits.
Do not count a retroactive social security or SSI payment as an asset either in the month of receipt or nine months following the month the payment is received. A retroactive payment means it is paid later than the month in which it is due. After nine months, treat any remaining available portion as an asset.
During the nine months in which it is not counted, the unspent portion of the payment can be mingled with other funds, provided it can be distinctly and separately identified.
The unspent portion of retroactive SSI and RSDI benefits received before March 2, 2004, is excluded from resources for the six calendar months following the month in which the individual received the benefits.
The unspent portion of Cobell settlement payments is excluded from resources for one year following the month in which the individual receives the payment.
While some members received class payments, others may have received payments in exchange for their ownership interest in land. This buy-out is an asset conversion that receives special treatment under the act. Exclude funds received from the sale of this land from resource counting for one year from the date of receipt. Funds retained longer than one year are countable as a resource.
| Example 1: | A class member receives a settlement payment (or a land buy-out payment) on October 5, 2011. Exclude this money for one year (November 2011 through October 2012). If retained, the money would be a countable resource starting November 2012. |
During the year in which it is not counted, the unspent portion of these payments can be mingled with other funds, provided it can be distinctly and separately identified.
To prevent the loss of eligibility due to counting a lump sum reimbursement of cost share or patient liability as an asset, the payment must be excluded as an asset in the month of its receipt, and for the next nine months. At the end of this period, any remaining available portion will be counted as an asset for purposes of determining eligibility. This time period gives members time to use these assets while also maintaining their Medicaid eligibility. This policy aligns with the treatment of lump sum payments received by members for retroactive Social Security payments (see Section 16.7.11.1, Retroactive SS Payments).
| Example 2: | Michelle is a former SSI recipient and now receives Social Security Disability Income and a surviving child benefit. She is considered a Disabled Adult Child (DAC) by the Social Security Administration. She applies for Medicaid but does not know when she stopped receiving SSI. Instead of being determined eligible for Medicaid as a DAC with no premium or cost share, she is determined eligible for Waiver Medicaid as a Group B with a cost share, which she pays each month. When her previous receipt of SSI is discovered, Michelle is owed the money that she paid towards her cost share and must be reimbursed that amount. Michelle has nine months after the month of receipt in which the reimbursed amount will not be considered an asset. If she receives the reimbursement in January, any remaining amount from the reimbursement will be counted as an asset in November. |
Retroactive Aid and Attendance payments from the VA are an exempt asset through the month after the month of receipt.
| Example 3: | Gloria receives $5000 in retroactive VA aid and attendance as a lump sum payment in May. The amount of that payment is disregarded through June 30. Any remaining funds as of July 1 are a countable asset. |
When a land contract is executed, the purchaser builds equity in the property through the payments he or she makes. The seller keeps legal title to the property until it is paid for. The seller's interest in the land contract is personal property, not real property.
The seller's legal title to the property can be sold and converted to cash for support and maintenance. To determine the value of the seller's legal interest in the land contract:
| Example 1: |
The fair market value of the land contract is $50,000. The purchaser has already paid $10,000 on the principal. $50,000 Fair Market Value -10,000 Already Paid $40,000 Outstanding Balance |
| Example 2: |
Company ABD purchases land contracts. They have offered to buy Mr. Graham’s land contract at a 10 percent discount. $40,000 Outstanding Balance - 4,000 10% $36,000 Value of Mr. Graham’s Interest in the Land Contract |
Treat any mortgage held by and owed to a member the same as a land contract.
The state of Wisconsin sells Wisconsin Higher Education Bonds to the public as a way to save for higher education. To determine their net value, subtract broker's fees from market value.
The bonds may be sold back to the state, under certain time restraints:
The bonds may be sold on the "secondary" bond market at any time. Since they can be disposed of on the market with no time limit, they are an available asset. To determine their net value, subtract broker's fees from market value. (Verify the amounts through a broker.)
Disregard restitution paid under PL 100-383 to Japanese-Americans and Aleuts or their survivors who were interned or relocated during World War II.
Disregard payments received from the Agent Orange Settlement Fund or any other fund established in settling In Re "Agent Orange" Product Liability Litigation, M.D.L. No. 381 (E.D.N.Y.). Disregard as income in the month received and as an asset thereafter.
Disregard payments from any program under the Radiation Exposure Act (PL 101-426) paid to persons to compensate injury or death resulting from exposure to radiation from nuclear testing ($50,000) and uranium mining ($100,000).
When the affected person is deceased, payment is made to his or her surviving spouse, children, parents, or grandparents. The federal Department of Justice reviews the claims and makes the payments.
Apply this disregard retroactively to October 15, 1990, and continue to disregard the payment for as long as it is identified separately.
Disregard assets set aside to carry out an approved self-support plan (see Section 15.7.2.2 Self-Support Plan). The set-aside must be segregated from other funds. Disregard interest that accumulates, provided the set-aside does not exceed the provisions of the plan.
Vehicles and homes are examples of exempt assets. If an exempt asset is lost, stolen, or damaged, disregard any cash (and interest earned) or in-kind replacement received from any source to repair or replace it.
The cash or in-kind payment must be used within nine months of the date it is received. After the end of the ninth month, count as an asset leftover cash not used for the repairs or replacement.
Extend the nine-month period for up to another nine months if the person has good cause for not repairing or replacing the thing. Good cause means circumstances beyond the person's control to prevent repair or replacement. This includes not being able to contract it out. When there is good cause, count as an asset any amount not used for repairs or replacement. Begin with the month after the end of the extension.
If, during a good cause extension, the person no longer intends to replace or repair the exempt asset, count the amount for replacement or repair as an asset. Begin with the month the person reports his or her change of intent.
Retirement benefits include work-related plans for providing income when employment ends (e.g., pension disability or retirement plans administered by an employer or union).
Other examples of retirement funds include accounts owned by the individual, such as IRAs and plans for self-employed individuals, sometimes referred to as Keogh plans.
| Example 1: | Mike withdraws $2,000 from his IRA and deposits it in a savings account. Continue to treat the $2,000 as a countable asset. This is just a conversion from one form of an asset to another. Treat any interest that Mark receives as income in the month received. |
A gift is something a person receives that is not repayment for goods or services the person provided and is not given because of a legal obligation on the giver’s part. To be a gift, something must be given irrevocably (that is, the donor relinquishes all control).
Treat non-cash gifts as an asset, as you would an asset of a similar type. A cash gift is income in the month of receipt. It is an asset in the months after the month of receipt. Disregard cash gifts (such as for birthdays, graduation, and Christmas) that total $30 or less, for each assistance group member, for each calendar quarter.
Count the cash value of a U.S. Savings Bond unless it is unavailable. A bond is unavailable only if the Medicaid group proves it tried to cash the bond and was refused.
Disregard assets purchased with Indian judgment funds (see 10. of Section 15.3.14 Payments to Native Americans), but do not disregard:
Disregard payments made under PL 103-286 to victims of Nazi persecution.
Disregard payments made under PL 104-204 to any child of a Vietnam veteran for any disability resulting from the child's spina bifida.
Do not count funds held in an account for the benefit of a minor that are the result of transfers under the Uniform Gifts to Minors Act. This act is also called the Uniform Transfers to Minors Act. There is no asset test for minors for EBD eligibility determinations.
IDAs are restricted accounts owned by people with low incomes. The IDA program provides matching funds for buying a home, starting a business, or post-secondary education. Member savings and interest are a countable asset if the IDA was established using the Assets for Independence Act or Refugee Assistance Act funds. However, if W-2 or Community Reinvestment funds support the IDA program, the assets are exempt.
Disregard any payments received from a state-established fund to aid victims of a crime. These payments are an excluded resource for nine months following the month of receipt.
Do not count the one-time $250 payment under the American Recovery and Reinvestment Act of 2009 as an asset either in the month of receipt or nine months following the month the payment is received.
ABLE accounts are tax-sheltered money market savings accounts specifically designed for people with disabilities. Anyone may contribute to these accounts for the disabled beneficiary.
While Wisconsin does not offer residents a state-specific ABLE program, Wisconsin residents may open these accounts in any state where an ABLE program is offered. If an applicant or member has an ABLE account, treat the money in the account as follows:
| Note: | The fact that someone uses their earned or unearned income to contribute to an ABLE account does not make the income exempt for purposes of Medicaid eligibility. Income received by the designated beneficiary and deposited into their ABLE account is still income to the designated beneficiary. For example, an applicant can have contributions automatically deducted from their paycheck and deposited into an ABLE account. In this case, the income used to make the ABLE account contribution is included in the Medicaid eligibility determination as income, even though the ABLE account is an exempt asset. |
ABLE account funds remaining after an applicant’s or member’s death are subject to estate recovery.
| Note: | If a third party contributes to someone else’s ABLE account, and then later applies for long-term care Medicaid, the contributed funds may be considered divestment. |
Crowdfunding accounts, such as GoFundMe and Kickstarter, raise money from multiple people online to finance things like a new business venture, medical bills, or funeral costs. If the funds in these accounts are not accessible for the person to withdraw, the funds would be an unavailable asset. Disbursements or withdrawals would be unearned income (a gift) in the month withdrawn, and any withdrawn amount that is still available in subsequent months would be an available asset.
Independence account balances will be exempt assets for all Medicaid programs. Any “pre-Independence account balance” will be a counted asset. Only funds deposited in a registered Independence Account while the member is eligible for MAPP may be exempted from the asset limit. Any deposits made prior to MAPP enrollment or during periods of MAPP ineligibility are not exempt assets. Note that there are different rules for retirement/pension accounts and non-retirement/pension accounts regarding how they may be registered as Independence Accounts and when funds may be deposited. See Section 26.4.1.1 Independence Accounts for more information on these accounts.
There is no uniform policy for how to count payment types related to the COVID-19 pandemic; some payment types are counted as assets and some payment types are not counted as assets. The criteria used to evaluate whether a payment type is counted as an asset include:
The payment types that do not count as assets include but are not limited to:
This page last updated in Release Number: 24-01
Release Date: 04/03/2024
Effective Date: 04/03/2024
The information concerning the Medicaid program provided in this handbook release is published in accordance with: Titles XI and XIX of the Social Security Act; Parts 430 through 481 of Title 42 of the Code of Federal Regulations; Chapters 46 and 49 of the Wisconsin Statutes; and Chapters HA 3, DHS 2, 10 and 101 through 109 of the Wisconsin Administrative Code.
Notice: The content within this manual is the sole responsibility of the State of Wisconsin's Department of Health Services (DHS). This site will link to sites outside of DHS where appropriate. DHS is in no way responsible for the content of sites outside of DHS.
Publication Number: P-10030