Spending Down/Gifting Assets
Resources must be reduced to the property limit for at least one day during the month in which a person is establishing eligibility. Giving away resources may render a person ineligible for a period of time running from the date of the transfer.
Penalties for transferring or gifting away non-exempt assets only apply if a Medi-Cal beneficiary or applicant enters a nursing home. If an applicant lives at home and gifts away property, there are no transfer penalties. The transfer rules are triggered when a person enters a nursing home and applies for Medi-Cal. The Medi-Cal application will ask if the applicant transferred any assets within the 30 months prior to the date of the application. The transfer rules apply only to non-exempt (countable) assets.
A transfer of non-exempt assets can result in a period of ineligibility which is the lesser of 30 months or the value of the transferred assets divided by the average private pay rate (APPR) at the time of application. The current APPR is $9,337 (effective January 1, 2019). [ACWDL 19-07 (2/15/19)]
Example:
Mr. D transfers $15,000 to his son in June, 2019 , and applies for Medi-Cal in July of 2019. Because Mr. D is in a nursing home, a transfer period will be triggered. The amount transferred ($15,000) is divided by the APPR ($9,337 ), and Mr. D will be subject to a period of ineligibility of 1.6 months. Since California does not count partial months, he will be ineligible for one month, running from the month of transfer (June, 2019 ). Thus, Mr. D will not be eligible for June of 2019, but he will be eligible as of July 1, 2019.
Example:
If Mr. D transfers $9,900 to his son and $9,900 to his daughter in January, 2019, each transfer is calculated separately. Each amount transferred ($9,900) is divided by the APPR of $9,337, and Mr. D will not be eligible for June, but he will be eligible as of July 1, 2019.
Note: Assets in any amount can be transferred at any time to a blind or disabled child of any age. The child’s disability must meet the requirements under the Social Security Act, i.e., the child must meet the disability requirements for SSA or SSI disability benefits. Transfers of a home or any asset to a blind or disabled child will not affect the Medi-Cal beneficiary or applicant’s eligibility. However, a transfer of liquid assets may impact the benefits of a child who is receiving SSI benefits, in which case an SSI specialist should be consulted.