Revision 12-1; Effective March 1, 2012

 

J-3100 Spousal Transfer of Resources

Revision 09-4; Effective December 1, 2009

 

There are no restrictions on interspousal transfers occurring from the date of institutionalization to the date of the MEPD application; the reason is that at application and throughout the initial eligibility period (first annual redetermination date set by the automated system), the combined countable resources of the couple are considered in determining eligibility. For the same reason, interspousal transfers are also permitted before institutionalization. A penalty can result when the community spouse transfers assets to a third party, not for the sole benefit of either spouse.

To remain eligible at the end of the initial eligibility period, the institutionalized spouse must reduce resources to which he has access at least to the resource limit. If the institutionalized spouse chooses, he may, during the initial eligibility period, transfer resources from his name to the community spouse's name with no penalty applied to the transfer. The transfer-of-assets policy applies only to transfer of assets for less than fair market value to individuals other than the community spouse, if not for the sole benefit of that spouse.

Transfer penalties apply when the community spouse transfers his separate property before institutionalization, or after institutionalization but before the MEPD certification. Transfer penalties apply when the community spouse transfers community property both before and after institutionalization, if not for the sole benefit of the spouse.

 

J-3110 Spousal Resource Transfer Examples

Revision 12-1; Effective March 1, 2012

 

  • When the institutionalized spouse enters a nursing facility, the couple's combined countable resources are $100,000, and the resources are all in the institutionalized spouse's name. The spousal protected resource amount (SPRA) is $50,000.

    Before application, the institutionalized spouse transfers the entire $100,000 to the community spouse. No transfer of assets penalty applies when eligibility is established.
  • When the institutionalized spouse enters a nursing facility, the couple's combined countable resources are $100,000, all in the institutionalized spouse's name. The SPRA is $50,000. The institutionalized spouse transfers all resources to the community spouse without penalty.

    A Medicaid application is filed two and one-half years later. The couple's combined countable resources are $30,000 as of 12:01 a.m. on the first day of the month of application, and the resources are all in the community spouse's name.
     
    • $30,000 Combined countable resources
    • – $50,000 SPRA
    • = $0 Compared to appropriate resource standard for an individual
  • If the institutionalized spouse inherits $20,000 after Medicaid certification, the institutionalized spouse may transfer the entire amount of that inheritance to the community spouse without penalty during the initial eligibility period. However, this $20,000 is treated as income for the month of receipt, and restitution of the full vendor payment for that month is requested. This brings the community spouse's resources to $50,000, the full protected amount.

  • If more than $22,000 is inherited, the person would be ineligible based on resources ($22,001 + $30,000 = $52,001 combined resources).
     
    • $52,001 Combined resources
    • – $50,000 SPRA
    • = $2,001 > $2,000 and ineligible
  • When the person enters the nursing facility, the couple's combined countable resources are $100,000 ($90,000 in person's name and $10,000 in the community spouse's name). The protected resource amount is $50,000.

    A Medicaid application is filed eight months later. Before application, the person transferred $80,000 to the community spouse and spent $10,000 on nursing facility bills. The community spouse then transferred $50,000 to her daughter before the Medicaid application was filed. The couple's combined countable resources are now $40,000 as of 12:01 a.m. on the first day of the month of application, and the resources are all in the community spouse's name.
     
    • $40,000 Combined countable resources
    • – $50,000 SPRA
    • = $0 Compared to appropriate resource standard for an individual

    The applicant is eligible for Medicaid but does not receive nursing facility services. The penalty period for vendor payment is imposed based on the $50,000 uncompensated value of the transfer to the daughter. Note: If the institutional spouse has a level of care or medical necessity determination and meets all eligibility criteria except for the transfer of assets provisions, the institutional spouse may be eligible to receive Your Texas Benefits Medicaid card but not assistance in paying for the cost of care in the long-term care facility. Follow procedures in Appendix XXIII, Procedure for Designated Vendor Number to Withhold Vendor Payment, to put the vendor payment on hold.

  • When the institutional spouse entered the nursing facility (June 17), the couple's combined countable resources were $30,000. The institutionalized spouse had transferred $10,000 in April, with no compensation to a son. The uncompensated value is not included when calculating the protected resource amount, and the SPRA is one-half of $30,000, which would be $15,000. However, $15,000 is less than the current minimum SPRA amount; thus, the SPRA would be the current minimum SPRA amount.

    Under post-DRA transfer of assets policy, a penalty is imposed should a Medicaid application be filed and the transfer is within the look-back period, but the penalty would not start until the medical effective date. (If under pre-DRA transfer of assets policy, a penalty is imposed should a MEPD application be filed before the 85-day penalty [based on $117.08] has expired.)

The transfer of assets divisor used for all of the above illustrations may not reflect the most recent average private-pay cost per day amount.

 

J-3200 Spousal Transfer of Income

Revision 09-4; Effective December 1, 2009

 

A person potentially incurs a transfer penalty by transferring income. Transfers of income include:

  • waiving the right to receive an inheritance even in the month of receipt;
  • giving away a lump sum payment even in the month of receipt; or
  • irrevocably waiving all or part of federal, state or private pensions or annuities.

The date of transfer is the date of the actual change in income, if within the look-back period or during an ongoing month.

Interspousal transfers of income are permitted (for example, obtaining a court order to have community property pension income paid to a community spouse).

 

J-3300 Other Transfer Information

Revision 09-4; Effective December 1, 2009

 

See Chapter I, Transfer of Assets, for requirements governing other transfer of assets under spousal impoverishment circumstances.