Q: Mom gave her adult son checks of a few hundred dollars in his name to cash for her so she would have spending cash.
She wrote checks in his name sporadically throughout the years and he gave her the $300 or whatever the check was. All of the cashed checks averaged $2400 a year. Will Medicaid say, "Gift!" Son can't prove how money was spent. Son lived with mother for 5 years to be there at night in case she fell or other emergency (these checks were not a payment or gift to him, he just acted like an ATM).
Edit: I don't think my original question was clear. The point is, we are applying for Medicaid for her and we are concerned that these small checks will be counted as gifts in her 5 year lookup period - say she cashed $2400 a year in checks written to her son and she used it for her spending money but we can't prove how the money was used. Medicaid might think she gave a $12,000 gift to her son over those 5 years and her family would get a $12,000 penalty.
A:
POMS Manual SI 01150.125 explains that if individuals can prove that they gave away resources for purposes other than qualifying for Medicaid benefits, then they may be able to avoid a Medicaid transfer penalty period of ineligibility.
But, the reviewing agent will presume that any gift is subject to a penalty period. You, the Medicaid applicant, have the burden of providing convincing that this “for other purposes” exception applies.
Examples are: (i) the transfer was made per a court order; (ii) proving that (at the time) the gift was made that the transferor could not have anticipated that they might have needed Medicaid; and (iii) after transfer there was an unexpected loss of income/resources which would have precluded SSI eligibility.
Sometimes patterns can be used as well. For example if a Medicaid applicant shows that, for the past 15 years, they donated $1,000 per year to the same charity or religious institution. Also if, when the transfer was made, the applicant was already under the $2,000 asset limit, that will help as well.
Another thought: It might be easier (and less expensive that hiring an attorney) to just accept the penalty. If the "gifts" have been $2,400 per year for 5 years, that's a $12,000 penalty which may just equate to 1-3 months of Medicaid disqualification. Perhaps the good son with a well-paying job can help supplement mom's existing income sources to just private pay until Medicaid can be restored.
Hope this helps.
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