Adult Medicaid Manual MA-2245 UNDUE HARDSHIP WAIVER FOR TRANSFER OF ASSETS

IV. INFORMATION AND DOCUMENTATION TO SUPPORT CLAIM FOR UNDUE HARDSHIP

The burden of proof to show that an undue hardship exists is the responsibility of the a/r or some other person or institution acting on the a/r’s behalf.

Documentation from the a/r or the person or institution acting on the a/r’s behalf must include:

A. A written statement from a medical doctor with knowledge of the a/r’s medical condition certifying that in his or her professional opinion, the a/r will be in danger of death or the a/r’s health will suffer irreparable harm if a penalty period is imposed.

ISSUED 11/01/07 – CHANGE NO. 24-07

(IV.)

B. Statements of knowledgeable persons, including but not limited to doctors, nurses, social workers or family members, establishing through the greater weight of evidence that the a/r will be deprived of food, clothing, shelter, or other necessities of life if a penalty period is imposed.

C. Verification that no other alternative income or assets exist to provide payment for institutional services, or food, clothing, shelter, or other necessities of life.

1. Consider the following:

a. Does the a/r have assets, both countable and non-countable, to pay for medical care, shelter, clothing, and other necessities of life?

b. Are there any other alternatives available to the a/r to provide medical care, food, clothing, shelter, and other necessities of life?

c. Does the a/r and/or a/r’s spouse, or if under age 18, a/r’s parents, have sufficient assets, including all countable and excluded assets except the individual’s, spouse’s, or parent’s home, to pay for medical care, shelter, clothing, and other necessities of life?

2. Available income means all income of the a/r and a/r’s spouse less the full amount of the maximum community spouse income allowance, including the excess shelter allowance, plus 50% of other income over the maximum community spouse income allowance for the community spouse (CSP). Any income of the CSP in excess of this amount may be a source to pay for long term care costs for the institutional spouse (ISP).

EXAMPLE: The CSP has income of $5,000/mo. Subtracting the maximum community spouse income allowance ($2,541) leaves $2,459 ($5,000 - $2,541 = $2,459). Half of the $2,459 is $1,229.50, rounded up is $1,230. Adding $1,230 to the maximum community spouse income allowance is $3,771 ($2,541 + $1,230 = $3,771). The amount of the CSP’s income over this amount, $1,229/month ($5,000 - $3,771 = $1,229), may be used to pay for the ISP’s care.

3. When the a/r or the a/r’s spouse has an equity interest in the home exceeding $500,000, the home is an alternative source to provide payment for institutional services, or food, clothing, shelter, or other necessities of life regardless of who is living in the home.

ISSUED 11/01/07 – CHANGE NO. 24-07

(IV.C.)

4. In addition to a home as described in C.3. above, alternative assets means all assets of the a/r and the a/r’s spouse except:

a. A motor vehicle in which the a/r or the a/r’s spouse has an equity interest not exceeding $30,000, and

b. Personal property, and

c. A portion of the CSP’s community spouse resource allowance (CSRA) as determined in MA-2231, Community Spouse Resource Protection, but not more than 60% of the Maximum CSRA. To calculate this amount, compute the CSRA. Protect the CSRA up to 60% of the maximum CSRA.

Any assets of the CSP in excess of this amount may be a source to pay for long term care costs for the institutionalized spouse (ISP). Any CSP Resource Allowance below this amount is protected for the CSP.

EXAMPLES:

d. A couple had total assets of $200,000. One-half, $100,000 is assigned to the CSP as the Community Spouse Resource Allowance (CSRA) as determined in MA-2231, Community Spouse Resource Protection. This is greater than 60% of the Maximum CSRA ($60,984). When determining potential sources for payment of the ISP’s care in determining if undue hardship exists $60,984 is protected for the CSP. Any amount of the CSP’s assets in excess of $60,984 may be used to pay for the ISP’s care. ($100,000 minus $60,984 equals $39,016 available to pay for the ISP’s care.)

e. The couple had total assets of $50,000. Half, $25,000 is assigned to the CSP as the CSRA. This amount is less than 60% of the Maximum CSRA ($60,984). Therefore, the CSRA, $25,000, is protected for the CSP.

f. The couple had total assets of $300,000. Half, $150,000 exceeds the maximum CSRA. Therefore, the maximum CSRA, $101,640, is assigned to the CSP as the CSRA. When determining potential sources for payment of the ISP’s care in determining if undue hardship exists, protect 60% of the Maximum CSRA ($60,984) for the CSP. Any amount of the CSP’s assets in excess of that amount ($40,656) may be used for the ISP’s care.

ISSUED 11/01/07 – CHANGE NO. 24-07

(IV.C.4.)

g. The couple had total assets of $40,000. Since this amount is less than the 60% of the maximum CSRA, the minimum CSRA, $20,328, is protected for the CSP. The CSRA is actually $20,000 ($40,000 divided by 2 = $20,000). However, this is less than the minimum CSRA which is $20,328 so the CSP amount is $20,328.

D. The a/r or person or institution acting on the a/r’s behalf provides the information and documentation necessary to demonstrate by greater weight of evidence that:

1. He is making a good faith effort to pursue all means to recover the transferred asset or the fair market value of the asset such as but not limited to the following:

a. Contacting the individual(s) or entity to whom the asset was transferred to try to have the asset returned, and

b. Seeking advice from an attorney or seeking advice from an individual or other entity who was involved in the creation of a financial instrument, promissory note, loan, mortgage or life estate interest regarding nullification, and

c. Cooperating with any attempt to recover the asset or the fair market value of the transferred asset.

And

2. The individual can not recover any portion of the transferred asset.