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Aged, Blind and Disabled Manual Policy Manual Number: 125.010 Section: Institutional Medicaid Chapter: Transfer of Assets and Penalty Periods

January 5, 2026 Division of TennCare 16

Note: The return of the resource to the individual is not counted as income to the individual.

g. Waiving of Entitled Income Benefits When a single lump sum of income is transferred for less than FMV, calculate the penalty based on the total lump sum divided by the average private pay nursing home charge. Apply a partial month penalty if the amount of the uncompensated value is less than the average monthly private pay nursing home charge.

If a stream of income (i.e., income paid on a regular basis such as a pension or other benefit) is transferred to another for less than FMV, determine the approximate value of the income to be received during the individual’s life expectancy. Divide the anticipated total of transferred income by the average private pay nursing home charge to determine the penalty period beginning with the month of transfer.

Example: Mrs. Dale, age 67, is entitled to a royalty payment of $200 per month or $2400 per year, but she has transferred that right to her nephew. At age 67, Mrs. Dale has a life expectancy (see SSA Period Life Table) of 18.76 years x $2400 year = $45,024. This uncompensated value divided by the average private pay nursing home charge equals the number of days of penalty.

h. Supplemental Security Income (SSI) Recipients (Effective 07/01/1988) If it is determined that an SSI recipient or her spouse’s assets have been transferred for less than FMV, the SSI recipient must serve the penalty period associated with that transfer prior to receiving TennCare Medicaid payment of long-term services and supports.

3. Rebuttal of the Transfer Presumption After a penalty period is established, an individual may rebut one or both of the following presumptions regarding a transferred asset: the transfer was done to establish eligibility for TennCare Medicaid benefits; or the individual received inadequate compensation, i.e. less than FMV for the asset.

i. Rebuttal of the Transfer to Establish TennCare Medicaid Eligibility

The individual has the right to rebut the presumption that an asset was transferred to establish TennCare Medicaid eligibility. He must present convincing evidence that the transfer was executed solely for some other purpose and that TennCare Medicaid eligibility was not a factor in his decision.

Request substantiating evidence and a written statement from the individual that includes the following: