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Effective: July 1, 2010 |
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19.40.20ar6 - Transfer Penalty Exceptions (Archive) |
Archived: June 1, 2011 |
Not all uncompensated transfers result in a transfer penalty. Some uncompensated transfers meet an exception, which means no penalty is imposed. Evaluate all uncompensated transfers made within the lookback period or while the client is receiving Medical Assistance (MA) payment of long-term care (LTC) services to determine if the transfer meets at least one of the exceptions listed below.
General Assistance Medical Care (GAMC).
The following uncompensated transfers are exempt from a transfer penalty.
1. Uncompensated transfers made prior to the lookback period.
2. The transferred assets are excluded assets other than a homestead. See MA Homestead Transfers.
3. There is convincing evidence of intent to receive fair market value.
4. There is convincing evidence to show the purpose of the transfer was exclusively for a reason other than to obtain or maintain MA for the client. See Transfers Made for Purposes Other Than to Qualify for MA.
5. Assets are transferred to or from the client's spouse, to a person, or another for the sole benefit of the client's spouse.
6. Assets are transferred to the client or the client's spouse's child of any age if the child is blind or permanently and totally disabled. The child must have a verified blindness or disability determination.
7. Assets are transferred into a trust established for the sole benefit of a child of any age of the client or the client’s spouse, if the child is blind or permanently and totally disabled. The child must have a verified blindness or disability determination.
8. Assets are transferred into a trust established for the sole benefit of any disabled person who is disabled according to SSA or SMRT criteria and who is under age 65.
An uncompensated transfer of a homestead is exempt from a transfer penalty when the transfer is made to:
l A spouse.
l A child under age 21 of the client or the client's spouse.
l A child (of any age) of the client or the client's spouse if the child is blind or permanently and totally disabled. The child must have a verified blindness or disability determination.
l A child (of any age) of the client or the client's spouse, when both of the following occur:
n The child lived in the home for at least two years before the client entered an LTCF or began receiving services through a home and community-based waiver program.
n The child provided verifiable care that allowed the client to remain at home rather than enter an LTCF. A physician's statement of needed care is required.
l A sibling of the client or the client's spouse, when that sibling meets both of the following:
n The sibling has an equity interest in the home.
n The sibling lived in the home at least one year immediately before the client entered an LTCF or began receiving services through a home and community-based waiver program.
It is not a requirement that the homestead be occupied by the client at the time of the transfer. It does not have to be the primary residence of the person receiving the transferred homestead.
Note: The exemption from a transfer penalty for the transfer of a homestead applies even if the homestead has lost its excluded status because the client has resided in a LTCF for more than six months.
Example:
Mordecai has resided in an LTCF for 12 months. He has no community spouse and his home is vacant. His daughter Lydia provides a physician’s certification that she lived with Mordecai and provided care to enable him to remain at home for three years before he entered the LTCF.
Action:
Mordecai may transfer the home to Lydia without penalty.
All uncompensated transfers within the lookback period result in penalties. There are no exceptions.