5331.1 Substantial Home Equity

Persons originally applying for long term care assistance on or after January 1, 2006 with equity interest in the home in excess of the Substantial Home Equity limit as noted in the , Kansas Medical Assistance Standards are ineligible for long term care assistance. Home equity limit is applicable to payment of institutional, HCBS and PACE assistance. Excess home equity does not impact eligibility for regular medical assistance.

Exceptions - The Home Equity test does not apply if one of the following individuals is residing in the home:\ The LTC individual’s spouse; A child of the LTC individual who is blind or disabled as described in 2662(1) or 2662(2) ; A child of the LTC individual who is under age 21.

Income Producing Property - The limitation does not apply to portions of the home property exempt under the self-employment or income producing property provisions of 5332 . Example : Mr. Smith owns home property worth $650,000. The home is valued at $300,000 and 250 acres of farmland are valued at $350,000. The farm is rented and is producing income consistent with the market value. The farm is exempt. Therefore, only the value of the home would be considered, or $300,000. Mr. Smith is not ineligible for LTC assistance based on these provisions.

Equity interest -To determine the equity interest, consider the fair market value of the homeless any encumbrances on the home. An encumbrance is a legally binding debt against the resource. Examples include a mortgage, reverse mortgage, home equity loan or other debt that is secured by the home.

Hardship - Persons denied payment of LTC costs due to substantial home equity may request a hardship waiver. The principles outlined in 5725 regarding transfer of property hardship provisions shall apply. Hardship will be considered if the individual is living in the home with special consideration given to individuals with home modifications to accommodate a disability or impairment.