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MEDICAL MEDICAL MEDICAL MEDICAL MEDICAL MEDICAL MEDICAL F-540 TRANSFER OF ASSETS Income deposited into a QIT is considered a transfer of assets, unless used to or for the benefit of the applicant/recipient. Payment towards the cost of care is considered to or for the benefit of the customer/applicant, thus avoiding a transfer of assets penalty. When income placed in a QIT exceeds the amount paid out of the trust for the individual’s monthly cost of care, the excess income is subject to a transfer of assets penalty. F-540.1 Transfer of Asset Penalty Medicaid applicants/recipients seeking or receiving HCBW Services must be assessed a penalty period using the same rules as those receiving Medicaid under Long Term Care (LTC) eligibility. Use the amount of the transfer divided by the average cost of LTC to determine the number of months the individual is ineligible for waiver eligibility. The TRAN record will calculate the penalty. The penalty can only be assessed if there is a slot available and the individual is otherwise eligible for services. F-545 ELIGIBILITY & PAYMENTS REVIEW When an individual has an income trust or court document, a copy of the trust or document must be sent to the Chief of Eligibility & Payments (E&P) to determine if it meets the requirements for an exempt trust. NOTE: MAGI Medicaid groups do not require a resource evaluation. If a customer is applying for or receiving Medicaid in a MAGI category and the customer has a trust, do not refer the trust to the Chief of E&P for legal evaluation. Refer to MAM E-300 (Trust Funds) for instructions on counting trust income. Trusts should always be referred to E&P when a MAGI Medicaid case is to be converted to a MAABD program. If the trust document fails to meet the requirements of a Miller Trust (QIT), the individual will be served a timely denial/termination notice. The individual will be allowed ninety days from the date of the notice to apply for undue hardship. F-550 UNDUE HARDSHIP The trust provisions may not apply when it is determined such application would work an undue hardship. If undue hardship is claimed, the individual will be responsible for providing convincing evidence that application of the trust provisions would cause an undue hardship. The evidence must include: a. A written statement from the individual/authorized representative stating the reason they feel undue hardship applies. b. Verification there is no means, legal or otherwise, by which the individual is able to recover and/or access assets held in the trust. c. The individual's relationship, if any to the person(s) who are trustees of the trust. Denial of eligibility would cause an undue hardship against the individual when all of the following conditions exist: a. The individual is otherwise eligible for Medicaid; and F-540 TREATMENT OF TRUSTS TRANSFER OF ASSETS Division of Welfare and Supportive Services Medical Assistance Manual 25 Mar MTL 03/25