General Rule
One vehicle of any value is exempt. If the applicant has more than one vehicle, then the most valuable vehicle will be exempt and other vehicles will count toward the $2,000 resource limit. In Georgia, “Automobile” means any vehicle used for transportation. These include cars, trucks, motorcycles, golf carts, animal-drawn vehicles and animals. ABD Manual 2308-1. See checklist.
In Georgia, the manual states “If it appears that the automobile is rarely or never used by the A/R or was purchased to shelter assets, count the auto as a resource.” ABD Manual 2308-4. However, this is contrary to federal regulations which do not require a specific amount of use. 20 C.F.R. 416.1218 requires exclusion of the vehicle if it is used to transport the applicant or immediate family members. We prove “use” by getting photographs of you transporting the Medicaid applicant. Ideally, you would get photographs from multiple days, showing multiple trips. See Initial Decision finding vehicle was exempt.
Valuation
The fair market value shown on the tag receipt is the default value. Since vehicles are assessed at 40%, if the assessed value is the only value shown on the tag receipt, then you must multiply it by 2.5 to get the fair market value. If you wish to rebut the value to establish a lower value, then two written appraisals from reputable sources (e.g., used car dealers) should be sufficient. ABD Manual 2308-5. You can also use sources such as the Kelly Blue Book. If a vehicle ounts toward eligibility, POMS SI 01130.200 and ABD Manual 2308 indicate the equity value is used, which takes into account encumbrances. “The EV of an automobile is the price it can sell for on the open market (to a private recipient) in the particular geographic area involved, minus any encumbrances. For the definition of an encumbrance see SI 01110.400A.1.c. and to determine equity value see SI 01140.042.”
Planning
One planning opportunity is trading in one or more old clunkers and purchasing a new vehicle. This is especially useful in spousal cases where the community spouse may be driving an old, unreliable vehicle. The same can be done for a disabled child capable of driving.
Another planning option is to spend down cash purchasing a vehicle that will be used to transport the applicant. That is what was done in the Worley decision. The applicant’s child purchased a reasonably priced vehicle that the applicant could get in and out of and used the vehicle to take her parent on excursions. Those trips were documented with photographs which demonstrated compliance with 20 C.F.R. 416.1218.
Penalties are imposed on transfers for the purpose of qualifying for Medicaid. See 42 U.S.C. § 1396p(c)(3). Absent a special rule to the contrary (which applies only to the homeplace and annuities at this time), transfer of an exempt resource should not be penalized. With that in mind, after eligibility is established, transfer of an exempt vehicle to someone other than the applicant should be penalty-free. Of course, other permitted transfers described i 42 U.S.C. § 1396p(c)(2) are also available.
Applying a different exemption, work vehicles used by the community spouse should also be excluded. In Timm v. Mont. Dep’t of Pub. HHS, 2008 MT 126 (2008), a truck which the community spouse used in the course of business was exempt as “property essential to self support.” Georgia ABD Manual 2337-5 states:
If an individual alleges owning items that are used in his or her work as an employee, obtain his or her statement on the following:
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- the name, address, and telephone number of the employer
- a general description of the items
- a general description of his or her duties
- whether the items are currently being used.
Absent evidence to the contrary, accept the individual’s statement. Caseworkers are instructed to totally exclude business property as a resource, regardless of its value or rate of return. ABD Manual 2337-2.
