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Aged, Blind and Disabled Manual Policy Manual Number: 110.050 Section: Financial Eligibility Requirements Chapter: ABD Countable and Excluded Resources

September 1, 2026 Division of TennCare 38 The value of the refund of a prepayment of institutional care belongs to the individual who paid the deposit. The facility can verify who paid the deposit upon the individual’s admission. Resolve any discrepancies by requesting the individual or responsible party provide some verification of payment.

Verify the full value of the deposit with the admitting facility or other verification of payment provided by the individual. Calculate the value of the anticipated refund of the item. The resultant amount is the value of the prepaid institutional care. It is not necessary to verify the actual amount of the refund. Proceeds from the Sale of a Home Resource Characteristic The proceeds from the sale of a home are excluded to the extent that the funds are intended to be used to purchase another home subject to the homestead exclusion, and the funds are used for such a purpose within 3 months of the date of receipt of the proceeds.

Promissory Note and other Loans Resource Type 1. Promissory Notes: Personal Use

A promissory note or other loan given by the household is considered personal property and is countable, unless the note or loan balance is inaccessible or the promissory note is held for reasons other than personal use. The lender holds legal interest and has the legal ability to make available his share in the note or loan. The equity value of the note or loan is countable.

2. Promissory Notes and Transfer of Asset Policy

If a household makes a loan that is considered inaccessible, or is shown to have a significantly lower market value than the unpaid balance of the loan, the loan will be considered to be an uncompensated transfer of assets. The uncompensated asset transfer will be considered to be the outstanding balance due on the loan as of the date of the lender’s application for LTSS (nursing facility or HCBS services).

In addition, the Deficit Reduction Act of 2005 (DRA) provides that funds used to purchase a promissory note, loan or mortgage must meet the following criteria or the purchase will be treated as a transfer of assets for less than Fair Market Value (FMV):

• The repayment term must be actuarially sound;