Caregiver child exception to penalty on transfer of the home

The general rule under 42 U.S. Code § 1396p(c)(1) is that any transfer for less than fair market value results in assessment of a transfer of resources penalty. There are, however, exceptions to the general rule. Subsection (c)(2)(A)(iv) is one of those exceptions and it provides that no penalty can be assessed if a home is transferred to “a son or daughter of such individual (other than a child described in clause (ii)) who was residing in such individual’s home for a period of at least two years immediately before the date the individual becomes an institutionalized individual, and who (as determined by the State) provided care to such individual which permitted such individual to reside at home rather than in such an institution or facility.”

Georgia’s ABD Manual includes this exception at Section 2342. There it states: “The homeplace was transferred to a son or daughter of the A/R who has been residing in the home for at least two years immediately prior to the A/R entering LA-D, and the son or daughter was providing such care to the A/R as to permit the A/R to continue to reside at home rather than enter LA-D.”

Since Georgia is an SSI State, the POMS provide guidance. POMS SI 01150.122 addresses this exception. It states that a person “resides” in the home “if it is that person’s primary place of residence. We follow the same criteria that are used to determine an eligible individual’s place of residence when determining the FLA and ISM (SI 00835.020).” In POMS SI 00835.020, “Residence” is defined as “the location of abode or dwelling place. A residence is also a place where a person makes his/her home. “Residence” is synonymous with the term “permanent living arrangement.”

Regarding provision of care, POMS SI 01150.122 states the “exception requires that the son or daughter (who received the transferred home) provided care that enabled the transferor to reside at home instead of in an institution or facility. Such care is substantial but not necessarily full-time care. A son or daughter is providing care for purposes of this exception if he/she does most of the following for the transferor on regular basis:

• prepares meals;
• shops for food and clothing;
• helps maintain the home;
• assists with financial affairs (banking, paying bills, taxes);
• runs errands;
• provides transportation;
• provides personal services;
• arranges for medical appointments;
• assists with medication

The POMS note that provision of care is not necessary if the child is blind or disabled since a different exception applies in those cases.

For purpose of this exception, the following persons are deemed to be institutionalized:

• an individual who is an inpatient in a nursing facility;
• an individual who is an inpatient in a medical treatment facility and for whom Medicaid payments are made based on a level of care provided in a nursing facility;
• an individual who is eligible for home or community based services under a waiver granted under section 1915(c) or (d). (See SI 01310.207)

Caseworkers must verify that the exception applies. They are directed to:

• Verify that the home was transferred, to whom, the amount of compensation if any, and the date of transfer using the individual’s statement either signed or recorded on a DROC, and appropriate documents (e.g., sales agreement, deed, mortgage documents).
• Verify the relationship of the transferor to the individual receiving the home (spouse, child, sibling). Information on the supplemental security record (SSR), master beneficiary record (MBR), or Numident may be used.
• As needed, verify an allegation that the individual’s son or daughter resided in the individual’s home for at least 2 years and provided care that enabled the individual to live outside an institution using available documents or a signed statement by a knowledgeable third party.
• As needed, verify that the individual is/was institutionalized and the dates.

The Transfer Penalty and exceptions to the transfer penalty are also discussed at HCFA 62, Section 3257-3258.