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Certain transfers are allowable. Do not apply a sanction to the following transfers.
A. Spending Down Liquid Resources
Spending down cash is a valid transfer of resources if the a/r purchases items or services on the open market for his/her use. Obtain the a/r’s statement as to how the cash was spent. The a/r does not have to provide an exact “to the penny” accounting but a reasonable accounting is acceptable. If the allegations are questionable or unreasonable, request evidence from the a/r to substantiate the expense, such as receipts for purchases, bank statements showing withdrawals, etc.
B. Compensated Transfer
A compensated transfer is one in which real or personal property or liquid resources are transferred or exchanged in return for money or some other tangible object, service, or benefit that is equal to or greater in value than the fair market value of the transferred resource. Determine fair market value based on procedures in SA-3200, Resources. Compensation can be in the form of cash, real or personal property, services, or assumption of the legal debt of the person making the transfer.
Transfers for services to be provided in the future are allowable only if there is a written legally binding agreement (contract, bill of sale, deed, etc.) for provision of services in effect at the time of the transfer. The contract must specify the current market value of the services and the frequency and duration of services. If the services are “for life,” use the Life Expectancy Chart in Figure 2 to determine if the a/r is expected to receive services equal to the transfer within his expected lifetime. You may request additional verification of the current market value of the service if it was not purchased on the open market.
C. Transfer of the Homesite to Allowable Persons
1. Refer to SA-3200, Resources, for the definition of homesite.
2. Transfer of the homesite is an allowable transfer only when it is transferred to one of the following:
a. Legal spouse, including a separated spouse, or
b. Natural or adopted child under age 21 at the time of the transfer, or
c. Blind/disabled child of any age (as determined by SSA).
3. Transfer of the homesite is an allowable transfer when the a/r enters a nursing facility (or a medical treatment facility for whom payments are made by Medicaid at a nursing facility rate) or enrolls in CAP if the transfer is to certain family members who lived in the home with the a/r immediately prior to entering the nursing home/CAP. This type of transfer is not allowable when the a/r enters an adult care home directly from the community.
When evaluating transfers that occurred during the lookback period, do not impose a sanction period if the a/r transferred the homesite to one of the family members below:
a. A child age 21 or older who resided in the home for at least 2 years immediately before the a/r entered a nursing facility or enrolled in CAP, and who provided care to the a/r that permitted him to live at home rather than in a nursing facility (or CAP) throughout the 2 year period. The a/r must provide documentation that the adult child resided in the home during the two years and provided necessary care.
NOTE: According to Medicaid policy, there is no minimum time requirement for placement in NF or CAP for this rule to apply. If you have questions, please discuss with your Medicaid supervisor.
Example: Ms. Sampson’s daughter lived with her for more than 2 years and provided care that enabled her to remain at home. On Oct. 15 Ms. Sampson enters the hospital and on Oct. 25 is admitted to a nursing facility. On Nov. 2 Ms. Sampson, through her power of attorney, transfers her homesite to her daughter. Her condition improves and on Jan. 5 she moves to an adult care home and applies for SA. There is no sanction for this transfer.
Example: Mr. Johnston’s son lived with him for more than 2 years and provided care that enabled him to remain at home. On Nov. 3 he enters an adult care home. He transferred his home to his son on Nov. 5. This transfer is subject to a sanction.
b. A sibling of the a/r who has an ownership interest in the home (including life estate) and who was residing in the a/r’s home for at least 1 year immediately before the a/r entered a nursing facility or enrolled in CAP.
D. Transfer of Resources To A Spouse
1. There is no sanction for transfers of any resources to a legal spouse, including separated spouses. Advise the couple that this type of transfer may affect eligibility for Medicaid if either of them applies for Medicaid benefits.
2. If the a/r transfers resources to a spouse, and the spouse then transfers the resource, there is no sanction for the a/r. If the spouse later applies for SA, determine if that transfer is subject to a sanction for the spouse.
3. If the a/r owns property owned with a spouse, follow procedures in SA-3200, Resources, to determine if the property is countable. If it is a countable resource, it is subject to a transfer sanction if the a/r and spouse together transfer the resource to another person, unless the transfer is allowable based on other rules in this section.
Example: Mr. Graham applies on SAA on 1/15/03. Mr. and Mrs. Graham had a joint savings account with a balance of $25,000. Either of them could access the funds (“or” account) so the full amount in the account would have been a countable resource. On 12/18/02 the Grahams closed the account and reopened it in Mrs. Graham’s name only. This is an allowable transfer to the spouse and there is no sanction.
Example: Mr. Hyde is an SAD recipient. Mr. and Mrs. Hyde jointly own a lakefront cabin. Mrs. Hyde states she will not consent to sell the property and it is excluded. Two months after Mr. Hyde is approved for SA, they transfer ownership of the property to their son. This is an allowable transfer because it is an excluded resource.
Example: Mr. Scotland applies on 9/4/03 for SA. The caseworker learns that Mr. and Mrs. Scotland had a certificate of deposit valued at $7,500, which they cashed in and transferred to their son on 7/15/03. This was a joint account that either spouse could access and would have been a countable resource. Mr. Scotland is subject to a 3 month sanction from August through October ($7,500 ÷ $2,000 = 3.75 rounded down to 3).
4. Special Assistance transfer rules in this section take precedence over prenuptial or postnuptial agreements and formal or informal separation agreements.
E. Transfers to the A/R’s Blind/Disabled Child
Any resource transferred to a/r’s blind/disabled child of any age, in addition to the homesite, is allowable. The blind/disabled child must be determined blind/disabled by SSA.
F. Excluded Resource at the Time of Transfer
Any resource, except the homesite, which was excluded as a countable resource at the time of the transfer, or would have been excluded had an application been made, is an allowable transfer. Examples of excluded resources that may be transferred without sanction are: personal effects and household goods, excluded vehicles, life insurance when the cash value is excluded, etc. Refer to SA-3200, Resources, to identify excluded resources.
G. Intent to Dispose at Current Market Value
1. Do not apply a transfer sanction when the a/r sells resources at less than current market value but he can prove he intended to dispose of the resource for current market value or for other valuable consideration.
2. The a/r must supply documentary evidence of two attempts to dispose of the resource for current market value or documentary evidence from two knowledgeable sources to support the value at which the resource was disposed. Refer to rebuttal procedures in SA-3200, Resources, to establish a lesser value of a resource.
Example: The applicant owns a non-homesite mobile home with a tax value of $18,500. There are no encumbrances on the property. He listed the property a year ago but was unable to sell it. He again lists the property with a realtor for the current market value of $18,500. After several weeks the a/r receives a firm offer for $14,500 and no other offers. He accepted the offer. This example documents that the a/r intended to sell his property at the current market value, but he only received a portion of that amount. Do not apply sanction to the difference between the current market value and the compensation received.
3. If the a/r establishes that he cannot sell a resource at the current market value, it remains subject to a sanction if he transfers the resource. Apply the sanction based on the lesser value established through the rebuttal process.
H. Resource Transferred Exclusively for Other Reasons
Except for the allowable transfers outlined in this section, presume all other transfers are made to make the individual eligible for SA. The a/r or representative may rebut the presumption and provide evidence that the transfer was made exclusively for a reason other than to establish eligibility for SA. Each situation must be evaluated by the county agency on a case-by-case basis. It may be done as part of the application process, redetermination, change in situation, or appeal.
1. When a non-allowable transfer is verified, presume the transfer was made to establish eligibility for SA and determine the sanction.
2. Advise the a/r he may rebut the presumption that the resource was transferred to establish or retain SA eligibility. The a/r must show by the greater weight of evidence that the resource was transferred exclusively for a reason other than qualifying for SA. The evidence presented (written or oral) must be more persuasive than all evidence presented to the contrary.
3. The rebuttal evidence may include:
a. The a/r’s or legal representative’s statement regarding the circumstances of the transfer. This includes the specific reason the resources were transferred, the date of transfer, the name and relationship of the person to whom the resources were transferred, and any compensation received. Question the a/r on how he expected to meet his living expenses and/or medical expenses without the resource and/or its income.
OR
b. Evidence from other sources to support the allegation. Examples of evidence are oral or written statements from persons knowledgeable about the situation, medical records, and bank records.
4. Evaluate the evidence presented. The evidence might establish another reason for the transfer. However, if establishing eligibility for SA was also considered, the transfer was not exclusively for a purpose other than to establish or retain SA eligibility. In making the determination consider the following:
a. The a/r’s age, general health, living arrangement, and amount of resources retained to meet future needs at the time of the transfer, and
b. Whether the case record documents any inquiry by the a/r, legal representative or other interested party about resource limits for SA, income budgeting, etc., and
c. Whether the a/r consulted or hired an attorney for estate planning purposes, and
d. Whether the individuals who provided the knowledgeable statements stand to gain in any way from the transfer.
I. All Transferred Resources Are Returned
1. Do not apply a transfer sanction when all transferred resources have been returned to the a/r at the time of application, or if the resources are returned the same month as the transfer.
2. If a sanction period has already been assigned when all or any portion of the resources is returned, refer to VIII.D. for instructions on lifting the sanction.
Do not apply a transfer sanction when it appears the a/r is a victim of fraud and did not take the action with the intent of becoming eligible for SA. Refer the case to Adult Services, and/or the Clerk of Court if there is a legal representative, to pursue possible reversal of the action and return of the resource to the a/r.
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For questions or clarification on any of the policy contained in these manuals, please contact your local county office.
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