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Medical Services Policy Manual, Section H

H-300 Transfer of Resources

H 309 Exceptions to the Penalty Period

transferred by the individual, the individual’s spouse or the designated representative during all the months of the look back period as one transfer. This applies to all transfers regardless of the amount transferred. The eligibility worker will add the amount of all the transfers together to calculate the penalty period. The penalty period will begin on the first day of the month of the transfer or the date on which the individual is eligible for Medicaid, whichever is the later date. Penalty for an Uncompensated Transfer to an Annuity - If an applicant with an annuity has not yet annuitized (i.e., started receiving regular payments) and the annuity is revocable, the principal of the annuity is a countable resource. If annuity payments have begun and the contract is irrevocable, the number of years of payout of the annuity must be equal to or less than the number of years of expected life remaining for the individual, based on the life expectancy tables at Appendix L. If the payout years are greater than the life expectancy years, a transfer of resources for less than fair market value has been made. If an annuity is made irrevocable and there will be no payout during the life of the annuitant, the full purchase price of the annuity is subject to a penalty for transfer of resources. Penalty for an Uncompensated Transfer Due to the Purchase of a Life Estate - The purchase of a life estate will be treated as an uncompensated transfer of resources if the purchaser does not live on the property for at least 12 consecutive months after the property is purchased. Also, if an individual purchases a life estate in someone else’s home the individual must live in that home for a period of 12 consecutive months after the date of purchase. In either case, the full amount of the purchase price of the life estate will be considered as the uncompensated transfer. If the transfer occurred after more than one year of occupancy, the eligibility worker will look at the purchase price of the life estate to determine if the purchase price was for fair market value. (See MS H-306). If the value of the life estate is less than the price of the life estate purchased, a transfer penalty is imposed for the difference between the value of the life estate interest and the purchase price.  NOTE: The Asset Transfer Worksheet is available to assist the eligibility worker in computing the correct penalty period. H-309 Exceptions to the Penalty Period MS Manual 07/13/15 A penalty period shall not be calculated according to MS H-308 if: 1. The resource transferred was a home, and title to the home was given to: