Subchapter B. AGED, BLIND AND
DISABLED CATEGORIES OF MA

§ 178.51. Additional resource requirements.

 (a)  Nonresident real property which is not excluded, or which loses the status of an excluded property and which can be converted to cash, is considered available to the applicant/recipient. The applicant/recipient shall have a 6-month period in which to make a bona fide effort to sell the property. The 6-month period may be extended for an additional 3 months if the applicant/recipient can demonstrate good cause for not selling the property by the end of the 6-month period.

 (b)  If an applicant/recipient is a joint owner of liquid resources, such as but not limited to, a checking or savings account, each owner is considered to own a share proportional to his net contribution to the resource. The applicant/recipient shall verify net contributions. If there is no evidence of net contributions, each owner is presumed to own an equal share.

 (c)  If an applicant/recipient is living with a nonapplicant/nonrecipient spouse or other person and property is jointly owned with the nonapplicant/nonrecipient spouse or other person, the MA resource limit for the applicant/recipient is based on the number of persons who live together and jointly own the property.

   This section cited in 55 Pa. Code §  178.121 (relating to general).

RESOURCE EXCLUSIONS FOR THE AGED,
BLIND AND DISABLED CATEGORIES OF MA

§ 178.61. Resources excluded by Federal statute.

 (a)  Title II of the Uniform Relocation Assistance and Real Property Acquisition Policies Act. Money received under Title II of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C.A. § §  4622—4638).

 (b)  Indian tribe per capita judgment funds. Judgment payments to members of certain Indian tribes referred to under the act of March 18, 1972 (25 U.S.C.A. § §  1261—1264) and the act of October 18, 1976 (Pub.L. 94-540) (90 Stat. 2503).

 (c)  Funds distributed or held in trust for Indian tribe members. Funds distributed per capita to, or held in trust for, members of an Indian tribe under the act of October 19, 1973 (25 U.S.C.A. § §  1401—1408).

 (d)  Value of coupon allotment under the Food Stamp Act of 1964. The value of the coupon allotment under section 7 of the Food Stamp Act of 1964 (7 U.S.C.A. §  2016(c)).

 (e)  Value of assistance under the National School Lunch Act. The value of assistance provided to children under the National School Lunch Act (42 U.S.C.A. § §  1751—1769c).

 (f)  Value of food assistance under the Child Nutrition Act of 1966. The value of supplemental food assistance received under section 11(b) of the Child Nutrition Act of 1966 (42 U.S.C.A. §  1780(b)).

 (g)  Federal loans and grants to undergraduate students. A grant or loan to undergraduate students made or insured under a program administered by the Commissioner of Education under section 507 of the Higher Education Amendments of 1968 (Pub.L. No. 90-575) (82 Stat. 1014).

 (h)  Payments to volunteers under the Domestic Volunteer Services Act of 1973. Payments to volunteers under section 404(g) of the Domestic Volunteer Services Act of 1973 (42 U.S.C.A. §  5044). These payments are for Vista, Service Learning Programs, and Special Volunteer Programs.

 (i)  Payments under the Alaska Native Claims Settlement Act. Tax exempt portions of payments received under section 21(a) of the Alaska Native Claims Settlement Act (43 U.S.C.A. §  1620(a)).

 (j)  Value of United States Department of Agriculture surplus food donation. The value of United States Department of Agriculture donated foods-surplus commodi-ties-distributed under section 32 of the act of August 24, 1935 (7 U.S.C.A. §  612c).

 (k)  Housing assistance. The value of assistance paid with respect to housing provided under the United States Housing Act of 1937 (42 U.S.C.A. § §  1401—1437q), the National Housing Act (12 U.S.C.A. § §  1701—1750g), section 101 of the Housing and Urban Development Act of 1965 (12 U.S.C.A. §  1701s and 42 U.S.C.A. §  1451) or Title V of the Housing Act of 1949, as provided by section 2(h) of the Housing Authorization Act of 1976 (Pub.L. No. 94-375) (90 Stat. 1068).

 (l)  Receipts distributed to certain Indian tribes. Effective October 17, 1975 under section 6 of the act of October 17, 1975 (25 U.S.C.A. 459(e)), receipts distributed to members of certain Indian tribes referred to in section 5 of the act (25 U.S.C.A. §  459(d)).

 Real property used as the principal place of residence by an applicant/recipient, the spouse, or dependent relatives and land and related outbuildings necessary to the operation of the home, regardless of their value, are excluded as long as the applicant/recipient, the spouse or relatives live in the property.

   (1)  Temporary absences from the home for such things as trips and hospitalizations do not affect the exclusion of the home if the applicant/recipient intends to return to the home. An absence from the home of at least 6 months may be an indication that the home is no longer the principal place of residence of the applicant/recipient.

   (2)  The home of an institutionalized applicant/recipient that had been used as his principal place of residence before he was institutionalized is excluded as a resource, if the institutionalized applicant/recipient states, in writing, that it is his intent to return to his home or if the home remains the principal place of residence of the institutionalized applicant’s/recipient’s spouse or dependent relative. If the person is incapable of providing the information, statements of intent to return are acceptable from a person with authority to act on behalf of the institutionalized applicant/recipient.

 (a)  Consistent with section 1917(f) of the Social Security Act (42 U.S.C.A. §  1396p(f)), regarding liens, adjustments and recoveries, and transfers of assets, effective for an application made on or after March 3, 2007, an individual with equity value in the home in excess of $500,000 is ineligible for payment of long-term care services unless one of the following circumstances exist:

   (1)  The home is the residence of the community spouse.

   (2)  The home is the residence of a child who is under 21 years of age or a child who is blind or permanently and totally disabled as defined in section 1611(a)(3) of the Social Security Act (42 U.S.C.A. §  1382c(a)(3)), regarding definitions.

 (b)  Consistent with section 1917(f) of the Social Security Act, an individual determined ineligible for payment of long-term care services due to excess home equity will continue to be reviewed for eligibility for Medicaid.

 (c)  Consistent with section 1917(f)(4) of the Social Security Act, an individual determined ineligible for payment of long-term care services due to excess home equity and who is unable to access the excess home equity may have the ineligibility period waived in the case of a demonstrated hardship.

 Real property not excluded as the principal place of residence under §  178.62 (relating to real property used as a principal place of residence) is considered a resource at its equity value, unless it is excluded as a property used in a trade or business essential to self-support under §  178.64 (relating to property used in a trade or business essential to self-support), or as a nonbusiness property essential to self-support under §  178.65 (relating to nonbusiness property essential to self-support).

 Property, whether real or personal, used in a trade or business or by the recipient as an employe, which is essential to self-support, regardless of value, is excluded.

   The provisions of this §  178.64 amended August 27, 1993, effective August 28, 1993, with the exception of the Agent Orange Settlement Payments requirement which is retroactive to January 1, 1989, 23 Pa.B. 4071. Immediately preceding text appears at serial page (171807) to (171808).

 The following nonbusiness property so essential to the self-support of the applicant/recipient as to warrant its exclusion is excluded:

   (1)  Property used exclusively to produce items for home consumption.

   (2)  Tools, equipment, uniforms and similar items required by the applicant’s/recipient’s employer.

 Household goods and personal effects are excluded.

   (1)  Household goods include furnishings and equipment which are commonly found in, or about, a house and are used in connection with the operation, maintenance and occupancy of the home. Personal effects include, but are not limited to, clothing, jewelry, items of personal care, recreational equipment, musical instruments and hobby items.

   (2)  Also excluded are items required because of a person’s physical condition, such as, but not limited to, prosthetic devices, dialysis machines, motorized wheel chairs, hospital beds and similar items regardless of the value.

 Only one motor vehicle for an applicant/recipient or an applicant/recipient and his eligible or ineligible spouse is excluded. Other motor vehicles are counted at their equity value.

 Life insurance owned by the applicant/recipient, up to a maximum face value of $1,500 for each insured person is excluded. If the life insurance of an insured person has a total face value in excess of $1,500, only the cash surrender value in excess of $1,000 shall be considered a resource to the owner.

 Term insurance or other life insurance which does not accumulate a cash value is excluded as a resource. The face value of these excluded insurance policies is not considered when the total face value is determined under §  178.69 (relating to life insurance policies).

 Burial spaces, as defined in §  178.2 (relating to definitions), for the applicant/recipient and his immediate family are excluded. The immediate family consists of the spouse and the minor and adult children, including adopted and stepchildren of the applicant/recipient, the applicant’s/recipient’s brothers, sisters, parents and adoptive parents, and the spouses of these persons.

 An irrevocable burial reserve is considered under §  178.5 (relating to treatment of irrevocable burial reserves for all categories of MA).

 Revocable burial reserves are considered as follows:

   (1)  Up to $1,500 in a revocable reserve for each applicant/recipient is excluded subject to the limitation in paragraph (2).

   (2)  The maximum exclusion of $1,500 is reduced by the total of one of the following:

     (i)   The face value of life insurance which accumulates cash value if the total face value does not exceed $1,500.

     (ii)   The cash value of life insurance excluded under §  178.69 (relating to life insurance policies) if the face value exceeds $1,500, and the value of the irrevocable burial reserve.

   (3)  Interest earned on the burial reserve is also excluded if it is left to accumulate with the revocable burial reserve.

   (4)  Funds, whether principal or interest, withdrawn and used for something other than the applicant’s/recipient’s burial expenses are counted as a resource.

 Disaster relief assistance and interest earned on the assistance which is received as a result of a major disaster under the Disaster Relief Act of 1974 (42 U.S.C.A. § §  5121—5202), or other assistance provided under a Federal statute because of a catastrophe which is declared to be a major disaster by the President of the United States, is excluded for a period beginning on the date the assistance is received and ending on the last day of the 9th full month following the month the cash was received.

   (1)  The initial 9-month period is extended for a reasonable period, up to an additional 9 months, when it is found that the applicant/recipient has good cause for not making the repairs, replacements or contracting for the repairs or replacement.

   (2)  An applicant/recipient is found to have good cause when circumstances beyond his control prevented the repair or replacement of a home or other kinds of property within the initial 9-month period.

   (3)  Cash and interest on the cash not used to repair or replace property destroyed in a disaster is considered a countable resource effective with the month following the expiration of the initial 9-month period or an approved extension of that initial period.

 Assistance to replace an excluded resource that is lost, damaged or stolen is excluded.

   (1)  In-kind replacement received for the purpose of repairing or replacing an excluded resource is excluded.

   (2)  Cash and interest earned on the cash received for the purpose of repairing or replacing an excluded resource is excluded for the 9 calendar months after the date the assistance is received.

     (i)   Cash or interest on the cash not used to repair or replace the excluded resource is considered a countable resource effective with the month following the expiration of the 9-month period or approved extension of the initial 9-month period.

     (ii)   The initial 9-month time period is extended for a reasonable period up to an additional 9 months when it is found that the applicant/recipient had good cause for not replacing or repairing the resource or contracting for the repairs or replacement. An applicant/recipient is found to have good cause when circumstances beyond his control prevented the repair, replacement, contracting for the repair or replacement of the resource. Unused cash and interest on the cash is considered as a resource effective with the month following the month in which the good cause extension period ends.

     (iii)   If an extension is made under the good cause provisions and the applicant/recipient changes his intent to repair or replace the excluded resource, funds previously held for replacement or repair are considered as a resource effective with the month in which the applicant/recipient reports the change of intent.

 Retroactive payments under SSI and Title II of the Social Security Act (42 U.S.C.A. § §  401—433) are excluded for 6 months after the month in which the retroactive payment is received. Any amount which remains after the sixth month is considered a resource. This exclusion does not apply to items purchased with the money even if the 6 month period has not expired.

 The proceeds from the sale of an excluded resident home which are used, or obligated, to purchase another excluded home and to pay the costs incidental to occupying the new residence are excluded. Incidental costs include, but are not limited to, moving expenses.

   (1)  The proceeds are the net payments received by the seller after satisfaction of encumbrances and sales expenses.

   (2)  This exclusion does not apply to that portion of the net proceeds of the sale of the original home that is in excess of the costs of the purchase, move to, and occupancy of the new home.

   (3)  Interest earned on the proceeds is treated as income under Chapter 181 (relating to income provisions for NMP-MA and MNO-MA).

   (4)  Mortgage payments made on the new home for any period after occupancy are not considered a purchase and occupancy cost for purposes of this exclusion.

   (5)  The purchase of the new excluded home shall be made within 3 months. The 3 month replacement period begins on one of the following schedules:

     (i)   On the date MA eligibility begins for the person who received the proceeds before applying for MA.

     (ii)   On the date of receipt of the proceeds for the person who receives the proceeds while an MA recipient.

 A gift made to a person under 21 years of age under 20 Pa.C.S. § §  5301—5310 (relating to Pennsylvania Uniform Gifts to Minors Act) is excluded as a resource until the person attains 21 years of age.

 In-kind support or maintenance benefits furnished in-kind by a private, nonprofit organization or furnished as cash or in-kind assistance by a supplier of home heating oil or gas, by an entity providing home energy whose revenues are primarily derived on a rate-of-return basis and regulated by the Pennsylvania Public Utility Commission or by a municipal utility providing home energy. Support and maintenance assistance includes home energy assistance (HEA). HEA benefits may include, but are not limited to, payments for heating or cooling, storm doors, weatherization services and blankets. HEA benefits do not include food or clothing.

 Benefits received from the low income home energy assistance program (LIHEAP) are excluded.

 Payments made under the republic of Germany’s federal law for compensation of National Socialist persecution—German Restitution Act—to certain survivors of the Holocaust are excluded. The payments may be made periodically or in a lump sum.

 Restitution payments made by the United States government to eligible Japanese-Americans and Aleuts who were interned or relocated during World War II are excluded. If the eligible Japanese-Americans are deceased at the time of payments, payments will be made to certain of their survivors as specified under the Civil Liberties Act of 1988 (50 App. 1989b and 1989b-1—1989b-9). This payment is also excluded. This section does not apply to eligible Aleuts who are covered under the Aleutian and Pribilof Islands Restitution Act (50 App. 1989c and 1989c-1—1989c-8). The exclusion as a resource only continues as long as the retained funds are kept identifiable. If real or personal property is purchased, the new resource is not excluded unless otherwise exempt. Interest received on retained restitution payments is also not excluded but is subject to the usual regulations governing interest in Chapter 181 (relating to income provisions for categorically needy NMP-MA and MNO-MA).

   The provisions of this §  178.82 adopted March 22, 1991, effective upon publication in the Pennsylvania Bulletin, and applies retroactively to August 10, 1988, 21 Pa.B. 1182.

 Payments made from the Agent Orange Settlement Fund or another fund established pursuant to the settlement in the agent orange product liability litigation are excluded.

   The provisions of this §  178.83 adopted August 27, 1993, effective August 28, 1993, with the exception of the Agent Orange Settlement Payments requirement which is retroactive to January 1, 1989, 23 Pa.B. 4071.

 The resources of the SSI-related child under 21 years of age and SSI-related applicant/recipient immediate families with children under 21 years of age are excluded. If the child who is under 21 years of age is living with a caretaker who is not immediate family as defined in §  178.2 (relating to definitions) and who exercises care and control of the child, the resources of the caretaker are excluded.

   The provisions of this §  178.84 issued under sections 201(2) and 403(b) of the Public Welfare Code (62 P. S. § §  201(2) and 403(b)).

   The provisions of this §  178.84 adopted June 15, 2001, effective June 16, 2001, 31 Pa.B. 3196.

DEEMING OF RESOURCES FOR THE AGED, BLIND AND
DISABLED CATEGORIES OF MA

§ 178.91. Deeming of resources.

 (a)  The deeming of resources is the assumption that the resources of an eligible person include the resources of the nonapplicant or ineligible spouse, including common-law, living with the eligible person regardless of whether the resources are made available to him.

 (b)  The deeming of resources is applicable only in situations where an eligible person is living in the same household with his nonapplicant or ineligible spouse, including common-law.

 (c)  The deeming of resources ends on the first day of the month following the month in which the persons are no longer living together.

 (d)  The persons are living together if the eligible person or the spouse is temporarily absent for economic reasons, emergency reasons, vacations or visits, and returns in the same month or the following month.

 (e)  The deeming of resources does not apply to pension funds owned by an ineligible spouse. Pension funds are defined as monies held in a retirement fund under a plan administered by an employer or union, or an individual retirement account—IRA—or Keogh Account as described by the Internal Revenue Code (26 U.S.C.A. § §  1—7872).

 (f)  Deeming of resources does not apply when one or both of the persons are living in an institution even when sharing a room. They are not considered to be living in a household.

 (g)  In deeming from one spouse to the other, the resources of those two persons are considered as if they were applying together and their total resources are subject to the two person MA resource limit in Appendix A for the appropriate MA Program.

 (h)  The resources of an applicant/recipient living with his nonapplicant or ineligible spouse—including common-law—are considered to include resources of the nonapplicant or ineligible spouse not excluded under the following provisions:

   (1)  Section 178.61 (relating to resources excluded by Federal statute).

   (2)  Section 178.62 (relating to real property used as a principal place of residence).

   (3)  Section 178.63 (relating to real property not excluded as a home).

   (4)  Section 178.64 (relating to property used in a trade or business essential to self-support).

   (5)  Section 178.65 (relating to nonbusiness property essential to self-support).

   (6)  Section 178.66 (relating to household goods and personal effects).

   (7)  Section 178.67 (relating to motor vehicle).

   (8)  Section 178.69 (relating to life insurance policies).

   (9)  Section 178.70 (relating to term insurance policies).

   (10)  Section 178.71 (relating to burial spaces).

   (11)  Section 178.72 (relating to irrevocable burial reserve).

   (12)  Section 178.73 (relating to revocable burial reserve).

   (13)  Section 178.74 (relating to disaster relief assistance).

   (14)  Section 178.75 (relating to replacement assistance).

   (15)  Section 178.76 (relating to retroactive payment under SSI and Title II of the Social Security Act).

   (16)  Section 178.77 (relating to proceeds from the sale of an excluded resident home).

   (17)  Section 178.78 (relating to Uniform Gifts to Minors Act).

   (18)  Section 178.79 (relating to certain support and maintenance assistance).

   (19)  Section 178.80 (relating to low income home energy assistance program).

   (20)  Section 178.81 (relating to German reparations payments).

   (21)  Section 178.82 (relating to Japanese-American and Aleutian restitution payments).

   (22)  Section 178.83 (relating to agent orange settlement payments).

 (i)  The eligible applicant/recipient and his nonapplicant or ineligible spouse are considered a couple and their resources are subject to the two person MA resource limit in Appendix A for the appropriate MA Program.

 (j)  The resources are considered whether or not they are made available to the applicant/recipient.

   The provisions of this §  178.91 adopted August 26, 1988, effective November 1, 1988, 18 Pa.B. 3979; amended March 22, 1991, effective upon publication in the Pennsylvania Bulletin, and applies retroactively to August 10, 1988, 21 Pa.B. 1182; amended August 27, 1993, effective August 28, 1993, with the exception of the Agent Orange Settlement Payments requirement which is retroactive to January 1, 1989, 23 Pa.B. 4071. Immediately preceding text appears at serial pages (171815) to (171816).

   This section cited in 55 Pa. Code §  178.121 (relating to general); and 55 Pa. Code §  178.124 (relating resource eligibility for the institutionalized spouse).

DISPOSITION OF PROPERTY AND FAIR
CONSIDERATION PROVISIONS FOR THE AGED,
BLIND AND DISABLED CATEGORIES OF MA

§ 178.101. Disposition of property and fair consideration provisions for transfers during the period of January 4, 1991, through July 29, 1994.

 (a)  If property was disposed of during the period of January 4, 1991, through July 29, 1994, § §  178.102 and 178.103 (relating to presumption of disposition of property to qualify for MA for transfers during the period of January 4, 1991, through July 29, 1994; and reestablishment of MA eligibility after transfers made during the period of January 4, 1991, through July 29, 1994) and this section apply to an applicant/recipient who is applying for or receiving NFC as defined in §  178.2 (relating to definitions), including services in an ICF/MR facility, if the property was transferred for less than FMV.

 (b)  An institutionalized applicant/recipient who transferred property for less than FMV is ineligible only for NFC for a period not to exceed 30 months from the date of the transfer. The person continues to be eligible for other MA services.

 (c)  A transfer of property by the community spouse to a person other than the institutionalized spouse is treated, and affects the eligibility of the institutionalized spouse, the same as transfers by the institutionalized spouse.

 (d)  The CAO shall evaluate a transfer completed during or after the 30-month period immediately before the date:

   (1)  The person is institutionalized, if the person was MA eligible on that date.

   (2)  The person applies for MA while institutionalized.

 (e)  The transfer of excluded personal property is not subject to the fair consideration provisions. The applicant/recipient shall promptly report the transfer and the compensation received shall be verified and treated as a resource subject to other resource requirements in this chapter.

 (f)  The transfer of the resident property is subject to the fair consideration provisions. The institutionalized person does not lose eligibility for payment of nursing facility services or ICF/MR services because of the transfer of the resident property if the resident property was transferred to:

   (1)  The spouse.

   (2)  A child who is under 21 years of age or a child who is blind or permanently and totally disabled regardless of age.

   (3)  A sibling who has equity interest in the resident property and who resided in the resident property for at least 1 year immediately before the person was admitted to the nursing facility or ICF/MR.

   (4)  A son or daughter, other than those described in paragraph (2), who resided in the resident property for at least 2 years immediately before the parent’s admission to a nursing facility and who provided care during the 2-year period which permitted the parent to stay in the resident property rather than be admitted to the nursing facility or ICF/MR.

     (i)   Sufficient evidence shall be presented by the child and the parent, or the parent’s representative, for the Department to determine if the conditions are met.

     (ii)   Otherwise, a written statement from the parent’s physician, a visiting nurse or other health professional familiar with the case is needed to determine if the conditions are met.

 (g)  An institutionalized person does not lose eligibility for payment of nursing facility or ICF/MR services because of a transfer of resources for less than fair consideration if one of the following applies:

   (1)  The transfer was to, or for the benefit of, the community spouse, or to a child who is blind or permanently and totally disabled regardless of age, or to another person for the sole benefit of the person’s spouse if the spouse does not transfer the resource to another person other than the institutionalized spouse for less than fair consideration.

   (2)  The person, a family member or someone else acting on behalf of the person can show that:

     (i)   The transfer was with the intention of receiving FMV or other valuable consideration.

     (ii)   The transfer was exclusively for a purpose other than to qualify for MA.

   (3)  The Department determines that the denial would cause undue hardship.

 (h)  The period of ineligibility for MA nursing facility services begins with the month of transfer and is the lesser of:

   (1)  Thirty months.

   (2)  The number of months, rounded to the next lowest whole month, arrived at by dividing the UV by the average monthly cost of private NFC in this Commonwealth. The average monthly private rate for nursing facility services is available upon request at the CAOs.

 (i)  During the period of ineligibility for MA nursing facility services, the nursing facility may charge the private pay rate.

   The provisions of this §  178.101 amended under sections 201(2) and 403(b) of the Public Welfare Code (62 P. S. § §  201(2) and 403(b)).

   The provisions of this §  178.101 adopted August 26, 1988, effective November 1, 1988, 18 Pa.B. 3979; amended August 28, 1992, effective upon publication and apply retroactively to October 1, 1989, 22 Pa.B. 4432; amended December 23, 1994, effective December 24, 1994, and apply retroactively to January 4, 1991, 24 Pa.B. 6423. Immediately preceding text appears at serial pages (171817) to (171818).

 (a)  If the presumption of disposition to qualify for MA is made by the Department, the applicant/recipient is notified of the finding, in writing, and is advised of his right to rebut this presumption within 15 days from the date the written notice is mailed.

 (b)  If the applicant/recipient does not respond to the written notification within 15 days from the date the written notice is mailed, the application/reapplication for MA is completed using the UV as a resource over the 30-month period from the date of the property transfer, and the total resources are determined on that basis.

 (c)  If the applicant/recipient responds to the written notification within the 15 days from the date the written notice was mailed that he wishes to rebut the presumption, the CAO shall explain to the applicant/recipient that it is his responsibility to present within 10 calendar days the required verification and convincing evidence that the resource was transferred solely for some purpose other than to qualify for MA. Convincing evidence includes documentary and nondocumentary evidence which provides proof of the circumstances surrounding the transfer, including the following:

   (1)  The purpose for transferring the resource.

   (2)  The attempts to dispose of the resources at its FMV.

   (3)  The reasons for accepting less than FMV for the resource.

   (4)  The means of, or plans for, self-support after the transfer.

   (5)  The applicant’s/recipient’s relationship to the person to whom the resource was transferred.

 (d)  If the evidence is received within the 10 calendar day period established in subsection (c), a decision on the success of the rebuttal of the applicant/recipient is made. If the establishment of MA eligibility is viewed as part of the reason for the transfer, even if another purpose has been established, the property was not transferred solely for some purpose other than to qualify for MA and the rebuttal is not successful. The presumption is rebutted only if the applicant/recipient proves that the transfer was solely for some purpose other than to qualify for MA such as:

   (1)  If, after the transfer of the property, the applicant/recipient became disabled or had an unexpected loss of other resources, or an unexpected loss of income, the presumption is rebutted. The disability or unexpected loss of income or resources, shall be verified.

   (2)  If the resources of the applicant/recipient would have been below the MA resource limit in Appendix A for the appropriate MA Program, during each of the preceding 30 months had the resource been retained, the presumption is rebutted. The applicant/recipient shall provide verification of the resource value during the period in question.

   (3)  If the transfer was the result of a court order or written settlement of a legal action, the presumption is rebutted. A copy of the court order or the written settlement is required.

 (e)  The determination of whether the presumption is rebutted is made by the Executive Director of the CAO or a delegate. The applicant/recipient is given written notice of the determination and of the right to appeal.

 (f)  If the presumption is rebutted, the transfer has no effect on the MA eligibility determination.

 (g)  If the presumption is not rebutted, it is presumed that the property transfer was for the purpose of qualifying for MA and the following apply:

   (1)  The UV is considered a resource for 30 months from the date of the property transfer.

   (2)  The UV is added to other resources that are considered. If the total exceeds the MA resource limit in Appendix A for the appropriate MA Program, the applicant/recipient is not eligible for MA.

   (3)  If the transferred resource is returned to the applicant/recipient, the UV is not considered a resource as of the date the transferred resource was returned. If the transferred resource is cash or a liquid resource, the UV is reduced by the value of the resource that was returned.

   (4)  A returned resource is evaluated as a resource.

   (5)  Additional compensation received in the form of cash after the transfer of the property further reduces the UV by the amount of cash received as of the date the cash was received.

   The provisions of this §  178.102 amended under sections 201(2) and 403(b) of the Public Welfare Code (62 P. S. § §  201(2) and 403(b)).

   The provisions of this §  178.102 amended December 23, 1994, effective December 24, 1994, and apply retroactively to January 4, 1991, 24 Pa.B. 6423. Immediately preceding text appears at serial pages (171818) to (171820).

 An applicant/recipient who is not eligible for MA under § §  178.101 and 178.102 (relating to disposition of property and fair consideration provisions for transfers during the period of January 4, 1994, through July 29, 1994; and presumption of disposition of property to qualify for MA for transfers during the period of January 4, 1991, through July 29, 1994) remains ineligible until one of the following occurs and the changes are reviewed based on the resource requirements in this chapter:

   (1)  The presumption of intent to qualify for MA is successfully rebutted at a prehearing conference, at a hearing or through a court order.

   (2)  The property is reconveyed to the applicant/recipient.

   (3)  The UV of the property is subsequently given to the applicant/recipient.

   (4)  Thirty months or a shorter period as established under §  178.101(h) has elapsed between the time of the transfer and the reapplication for MA. The period of ineligibility may be less than 30 months if:

     (i)   The applicant/recipient transferred a home for less than FMV during or after the 30-month period immediately before applying for MA.

     (ii)   The UV of the house was less than the average amount payable under the MA Program for 30 months of NFC. The period during which the UV shall be considered is the number of months arrived at by dividing the UV by the average monthly payment rate for NFC.

   The provisions of this §  178.103 amended under sections 201(2) and 403(b) of the Public Welfare Code (62 P. S. § §  201(2) and 403(b)).

   The provisions of this §  178.103 adopted August 26, 1988, effective November 1, 1988, 18 Pa.B. 3979; amended August 28, 1992, effective upon publication and apply retroactively to October 1, 1989, 22 Pa.B. 4432; amended December 23, 1994, effective December 24, 1994, and apply retroactively to January 4, 1991, 24 Pa.B. 6423. Immediately preceding text appears at serial page (171820).

 (a)  If assets are disposed of on or after July 30, 1994, § §  178.105 and 178.106 (relating to presumption of disposition of assets to qualify for MA for transfers on or after July 30, 1994; and reestablishment of MA eligibility after transfers made on or after July 30, 1994) and this section apply to an institutionalized individual who is applying for or receiving MA for NFC as defined in §  178.2 (relating to definitions), including services in an ICF/MR, or a level of care in an institution equivalent to NFC, or home or community-based services furnished under a Title XIX waiver and the individual or the individual’s spouse transfers assets for less than FMV.

 (b)  An institutionalized individual who disposes of assets for less than FMV on or after the look back date in subsection (c) is ineligible for MA for NFC which includes the services set forth in subsection (a). A transfer of assets by the community spouse to a person other than the institutionalized spouse is treated and affects the eligibility of the institutionalized spouse the same as a transfer by the institutionalized spouse.

 (c)  The look-back date shall be 36 months from the date on which the individual is both institutionalized and has applied for MA, except in the case of payments from a trust, or portions of a trust, as described in §  178.7(e)(1)(iii) and (2)(ii) (relating to treatment of trust amounts for all categories of MA for trusts established on or after July 30, 1994) which are considered assets disposed of for less than FMV by the individual. In this instance, the look-back date shall be 60 months.

 (d)  The number of months of ineligibility for the institutionalized individual who disposes of assets for less than FMV shall be equal to the total cumulative UV of all assets transferred by the individual or the individual’s spouse on or after the look-back date divided by the average monthly cost to a private patient of NFC in effect in the Commonwealth at the time of application.

 (e)  An individual will not be ineligible for payment for NFC if:

   (1)  The assets were the resident property and title to the home was transferred to:

     (i)   The spouse of the individual.

     (ii)   The individual’s child who is under 21 years of age, or blind or permanently and totally disabled as determined under §  140.81 (relating to deductions from earned income), or is blind or disabled based on SSI criteria as specified in 42 U.S.C.A. §  1382c(a)(3).

     (iii)   A sibling of the individual who has an equity interest in the home and who resided in the individual’s home for at least 1 year immediately before the date the individual became an institutionalized individual.

     (iv)   A son or daughter of the individual, other than a child described in subparagraph (ii), who resided in the individual’s home for at least 2 years immediately before the date the individual became an institutionalized individual and who provided care to the individual which permitted the individual to reside at home rather than in an institution or facility.

   (2)  The assets were transferred to one of the following:

     (i)   The individual’s spouse or to another for the sole benefit of the individual’s spouse.

     (ii)   To another for the sole benefit of the individual’s spouse, from the individual’s spouse.

     (iii)   The individual’s child described in paragraph (1)(ii), or to a trust, including one described in §  178.7(f), established solely for the benefit of the individual’s child.

     (iv)   A trust, including a trust described in §  178.7(f), established solely for the benefit of an individual under 65 years of age who is disabled based on SSI criteria as specified in 42 U.S.C.A. §  1382c(a)(3).

   (3)  The individual, the individual’s spouse or someone else acting on behalf of the individual can show that one of the following applies:

     (i)   The individual intended to dispose of the assets either at FMV or for other valuable consideration.

     (ii)   The assets were transferred exclusively for a purpose other than to qualify for MA.

     (iii)   The assets transferred for less than FMV were returned to the individual.

   (4)  The Commonwealth determines that denial of eligibility would cause undue hardship as defined in §  178.2.

 (f)  If an asset is held by an individual in common with other persons in joint tenancy, tenancy in common or a similar arrangement, the asset or the affected portion of the asset shall be considered to be transferred by the individual when an action is taken, either by the individual or by another person, that reduces or eliminates the individual’s ownership or control of the asset.

 (g)  If a transfer by the individual’s spouse results in a period of ineligibility for MA, the Commonwealth will apportion the period of ineligibility or any portion of the period between the individual and the individual’s spouse if the spouse otherwise becomes eligible for MA for NFC.

 (h)  During the period of ineligibility for MA payment for NFC, the nursing facility or other provider may charge the private pay rate.

   The provisions of this §  178.104 issued under sections 201(2) and 403(b) of the Public Welfare Code (62 P. S. § §  201(2) and 403(b)).

   The provisions of this §  178.104 adopted December 23, 1994, effective December 24, 1994, and apply retroactively to July 30, 1994, 24 Pa.B. 6423.

   Burden of Proof

   This regulation squarely places the burden on the applicant to establish that he or she ‘‘intended’’ to dispose of the assets for fair market value or for other valuable consideration, or that the assets were transferred ‘‘exclusively’’ for a purpose other than to qualify for Medical Assistance. Ptashkin v. Department of Public Welfare, 731 A.2d 238 (Pa. Cmwlth. 1999).

   Disposition of Assets

   The Department did not misapply the exception regarding disposition of assets; since at the time of the transfer the applicant and his spouse suffered ailments that could eventually render them in need of nursing home care, and when the only explanation for the transfer of real property to children for $1.00 was to keep the property in the family, the Department determined that the petitioner had failed to satisfy his burden to show that the transfer was made for a purpose other than to qualify for Medical Assistance. Godown v. Department of Public Welfare, 813 A.2d 954 (Pa. Cmwlth. 2002).

   Where a couple converts otherwise countable assets into an irrevocable, actuarially sound commercial annuity for the sole benefit of the community spouse, the annuity is not a countable resource in calculating the CSRA. The transfer may not be used to impose a period of ineligibility. Mertz v. Houston, 155 F. Supp. 2d 415 (E.D. Pa. 2001).

   Husband’s use of funds transferred from his wife, who is a nursing home resident, to purchase an annuity from an irrevocable trust established by the couple’s adult daughters was not a permissible spending down of the couple’s money, where the purchase of the annuity was for less than fair consideration, was made with the intent to qualify the wife for Medical Assistance, and was contrary to the provisions and intent of the Medicare Catastrophic Coverage Act. Bird v. Department of Public Welfare, 731 A.2d 660 (Pa. Cmwlth. 1999).

   Fair Consideration

   The applicant failed to carry her burden of proving her eligibility for Medical Assistance by showing that the disputed funds were transferred for fair market value or exclusively for a purpose other than to qualify for Medical Assistance, where the applicant presented absolutely no evidence other than the promissory notes themselves, and where the Department of Public Welfare presented evidence that it had discovered that the applicant had sold her home and received net proceeds of $28,815, but that she, instead of applying these funds for her nursing home care, transferred them to her adult children in exchange for two promissory notes, and that she is only receiving $48 per month for 9 years until she receives the principal, plus accrued interest, in a lump sum due past her life expectancy. Ptashkin v. Department of Public Welfare, 731 A.2d 238 (Pa. Cmwlth. 1999).

   Husband’s use of money transferred from his wife, who is a nursing home resident, to purchase an annuity for $143,000 that would, over a period of 6 years, should he live that long, reap a return of $144,000, or $600 in interest, but if he died before reaching the end of his purported life expectancy, his estate forfeits any further return on his investment, was not for fair consideration. Bird v. Department of Public Welfare, 731 A.2d 660 (Pa. Cmwlth. 1999).

   Multiple Transfers

   Where a Medicaid applicant made three consecutive transfers of $9,000 each, the Department of Public Welfare correctly calculated the period of ineligibility by considering the total of the cumulative uncompensated value of the transferred assets instead of viewing each transfer separately. Heffelfinger v. Department of Public Welfare, 789 A.2d 349 (Pa. Cmwlth. 2001).

 (a)  Consistent with section 1917(c)(1)(B)(i) of the Social Security Act (42 U.S.C.A. §  1396p(c)(1)(B)(i)), regarding liens, adjustments and recoveries, and transfers of assets, effective for an application made on or after March 3, 2007, the look-back period for assets transferred on or after February 8, 2006, shall be 60 months.

 (b)  Consistent with section 1917(c)(1)(D) of the Social Security Act, effective for an application made on or after March 3, 2007, in the case of a transfer of assets for less than Fair Market Value (FMV) made on or after February 8, 2006, by an applicant or spouse of an applicant, the penalty period shall commence on the date the applicant would otherwise be eligible for Medicaid based on an approved application for these services.

 (c)  Consistent with section 1917(c)(1)(D) of the Social Security Act, effective with transfers of assets for less than FMV made on or after March 3, 2007, by a recipient, the beginning date of a period of ineligibility for payment of long-term care services shall commence on the first day of the month following the date specified in the Appeal and Fair Hearing section of the Advance Notice provided to the recipient.

 (d)  Consistent with section 1917(c)(1)(E)(iv) and (H) of the Social Security Act, effective for an application made on or after March 3, 2007, a period of ineligibility for payment of long-term care services will result when an applicant or spouse of an applicant disposes of assets for less than FMV on or after February 8, 2006. The period of ineligibility shall be determined by dividing the total cumulative uncompensated value of all assets disposed of by the applicant or the applicant’s spouse on or after the look-back date, by the average daily private pay rate in effect at the time the application is processed.

 (e)  Consistent with section 1917(c)(1)(E)(iv) and (H) of the Social Security Act, effective March 3, 2007, a period of ineligibility for payment of long-term care services will result when a recipient disposes of assets for less than FMV on or after March 3, 2007. The period of ineligibility shall be determined by dividing the total cumulative uncompensated value of all assets disposed of by the recipient on or after the look back date, by the average daily private pay rate in effect at the time the period of ineligibility is determined.

 (f)  Consistent with section 1917(c)(1)(I) of the Social Security Act, effective for an application made on or after March 3, 2007, the outstanding balance due on a promissory note, loan or mortgage purchased on or after February 8, 2006, that does not meet all of the following requirements will be treated as a transfer of assets for less than FMV:

   (1)  The repayment terms must be actuarially sound.

   (2)  The terms must provide for payments in equal amounts throughout the term, with no deferral of payments and no balloon payments.

   (3)  The terms must prohibit cancellation of the balance upon death of the lender.

 (g)  Consistent with section 1917(c)(1)(J) of the Social Security Act, effective for an application made on or after March 3, 2007, the purchase of a life estate interest in another individual’s home made on or after February 8, 2006, shall be considered a transfer of assets for less than FMV unless the purchaser resided in the home for at least 1 year after the purchase date.

 (h)  Consistent with section 1917(c)(1)(F) and (G) of the Social Security Act, effective for an application made on or after March 3, 2007, the purchase of an annuity by an applicant or applicant’s spouse on or after February 8, 2006, that does not meet all of the following requirements, will be treated as a transfer of assets for less than FMV:

   (1)  The annuity must be irrevocable and nonassignable.

   (2)  The annuity must be actuarially sound.

   (3)  The annuity must provide for payments in equal amounts, with no deferral and no balloon payments made.

   (4)  The annuity must name the Department as the remainder beneficiary in the first position for at least the total amount of medical assistance paid by the Department on behalf of the recipient. The annuity must name the Department as beneficiary in the second position when there is a community spouse (CS), minor child, or blind or permanently and totally disabled child for at least the total amount of Medical Assistance paid by the Department on behalf of the recipient and must name the Department in the first position if the CS or a representative of a minor child, or a representative of a permanently and totally disabled child disposes of any remainder for less than FMV.

 (i)  Consistent with section 1917(c)(1)(F) and (G) of the Social Security Act, effective for an application made on or after March 3, 2007, the purchase of a nonqualified annuity on or after February 8, 2006, by the spouse of an applicant, that does not name the Department as beneficiary in the first position will be treated as a transfer of assets for less than FMV.

 (j)  The provisions in this statement of policy do not prevent the Department from treating an annuity owned by an applicant or recipient or the spouse of an applicant or recipient that satisfies the requirements in subsection (h) or the requirement in subsection (i), as either income or a resource in the eligibility determination for long-term care services under the Medicaid Program.

 (k)  The provisions in this statement of policy do not prevent the Department from treating an outstanding balance due on a promissory note, loan or mortgage satisfying the requirements in subsection (f), as either income or a resource in the eligibility determination for long-term care services under the Medicaid Program.

 (a)  For the purposes of this statement of policy, an undue hardship exists when application of the transfer of assets penalty provision would deprive the individual of one of the following:

   (1)  Medical care so that the individual’s health or life would be endangered.

   (2)  Food, clothing, shelter or other necessities of life.

 (b)  Consistent with section 1917(c)(2)(D) of the Social Security Act (42 U.S.C.A. §  1396p(c)(2)(D)), regarding liens, adjustments and recoveries, and transfers of assets, effective with applications made on or after March 3, 2007, the Department will provide undue hardship waiver guidelines to an individual who is determined ineligible for payment of long-term care services due to a transfer of assets for less than fair market value made on or after February 8, 2006. The undue hardship waiver guidelines provide for the following:

   (1)  A notice to the individual that an undue hardship waiver exception exists.

   (2)  A timely process for determining whether an undue hardship waiver will be granted.

   (3)  A process under which an adverse determination can be appealed.

 (c)  Consistent with section 1917(c)(2)(D) of the Social Security Act, the undue hardship waiver request guidelines will permit the facility in which the institutionalized individual is residing to file an undue hardship waiver application on behalf of the individual with the consent of the individual or the personal representative of the individual.

 (d)  Until the Secretary of Health and Human Services establishes the demonstrated hardship process, the Department will apply the undue hardship process for an individual whose equity interest in the individual’s home exceeds $500,000.

 (a)  If a presumption of disposition of assets to qualify for MA is made by the Department, the individual will be notified in writing by the CAO of the finding and of the right to rebut this presumption within 15 days from the date the notice is mailed.

 (b)  If the individual does not respond to the notice within 15 days from the date it is mailed, the CAO will complete the application/reapplication for MA using the UV as an asset available to the individual over the applicable look-back period from the date of the transfer of the asset and the total assets will be determined on that basis.

 (c)  If the individual responds to the written notice within 15 days from the date it was mailed that he wishes to rebut the presumption, the CAO shall explain to the individual that it is his responsibility to present within 10 calendar days the required verification and convincing evidence that the assets were transferred solely for some purpose other than to qualify for MA. Convincing evidence includes documentary and nondocumentary evidence which provides proof of the circumstances surrounding the transfer, including the following:

   (1)  The purpose for transferring the asset.

   (2)  The attempts to dispose of the asset at its FMV.

   (3)  The reasons for accepting less than FMV of the asset.

   (4)  The means of, or plans for, self-support after the transfer.

   (5)  The individual’s relationship to the person to whom the asset was transferred.

 (d)  If the evidence is received within the 10 calendar day period established in subsection (c), a decision on the success of the rebuttal of the individual will be made. If the establishment of MA eligibility is determined to be part of the reason for the transfer, even if another purpose has also been established, the asset was not transferred solely for some purpose other than to qualify for MA and the rebuttal is not successful. The presumption is rebutted only if the individual proves that the transfer was solely for some purpose other than to qualify for MA such as:

   (1)  If after the transfer of the asset, the individual either becomes disabled or has an unexpected loss of assets and this results in the need to apply for MA the presumption is rebutted. The unanticipated disability or unexpected loss of assets shall be verified.

   (2)  If the assets of the individual would still have been below the income and resource limits for the appropriate MA Program during each of the months in the period of ineligibility which would otherwise apply under §  178.104(d) (relating to disposition of assets and fair consideration provisions for transfers on or after July 30, 1994), had the asset been retained, the presumption is rebutted. The individual shall provide verification of the asset value during the period in question.

   (3)  If the transfer was the result of a court order or written settlement of a legal action, the presumption is rebutted. A copy of the court order or written settlement is required.

 (e)  The determination of whether the presumption is rebutted is made by the executive director of the CAO or a delegate. The individual is given written notice of the determination and of the right to appeal.

 (f)  If the presumption is rebutted, the transfer has no effect on the MA eligibility determination.

 (g)  If the presumption is not rebutted, it is presumed that the asset transferred was for the purpose of qualifying for MA and the following apply:

   (1)  The UV is considered an asset for 36 or 60 months, as applicable, from the date on which the individual is both an institutionalized individual and has applied for MA.

   (2)  The UV is added to other assets that are considered. If the total exceeds the MA income or resource limits in Appendix A or Chapter 181 Appendix B, for the appropriate MA Program, the individual is not eligible for MA.

   (3)  If the transferred asset is returned to the individual, the UV is not considered an asset as of the date the transferred asset was returned. If the transferred asset is cash or liquid assets, the UV is reduced by the value of the asset that was returned.

   (4)  A returned asset is evaluated as an asset.

   (5)  Additional compensation received in the form of cash after the transfer of the asset further reduces the UV by the amount of cash received as of the date the cash was received.

   The provisions of this §  178.105 issued under sections 201(2) and 403(b) of the Public Welfare Code (62 P. S. § §  201(2) and 403(b)).

   The provisions of this §  178.105 adopted December 23, 1994, effective December 24, 1994, and apply retroactively to July 30, 1994, 24 Pa.B. 6423.

   Disposition of Assets

   Medical Assistance applicant petitioned for review of decision of administrative law judge (ALJ) who refused to consider her attempt to rebut presumption that she transferred resources for the purpose of qualifying for Medical Assistance. The ALJ found that she received an overpayment of Medical Assistance benefits when she transferred resources to daughters of late husband without fair consideration during lookback period; while Department of Public Welfare presumes transfers are made to qualify for assistance, based on Department’s regulations, ALJ is required to give applicant an opportunity to rebut that presumption. Gilroy v. Department of Public Welfare, 946 A.2d 194, 196-197 (Pa. Cmwlth. 2008)

   Where a couple converts otherwise countable assets into an irrevocable, actuarially sound commercial annuity for the sole benefit of the community spouse, the annuity is not a countable resource in calculating the CSRA. The transfer may not be used to impose a period of ineligibility. Mertz v. Houston, 155 F. Supp. 2d 415 (E.D. Pa. 2001).

 An individual who is not eligible for MA under § §  178.104 and 178.105 (relating to disposition of assets and fair consideration provisions for transfers on or after July 30, 1994; and presumption of disposition of assets to qualify for MA for transfers on or after July 30, 1994) remains ineligible until one of the following occurs:

   (1)  The presumption of intent to qualify for MA is successfully rebutted at a prehearing conference, at a hearing or through a court order.

   (2)  The property is reconveyed to the individual.

   (3)  The UV of the property is subsequently given to the individual.

   (4)  The period of ineligibility has elapsed between the time of the transfer and the reapplication for MA. The period of ineligibility is as determined in §  178.104(d) unless the transfer meets the conditions of §  178.104(e).

   The provisions of this §  178.106 issued under sections 201(2) and 403(b) of the Public Welfare Code (62 P. S. § §  201(2) and 403(b)).

   The provisions of this §  178.106 adopted December 23, 1994, effective December 24, 1994, and apply retroactively to July 30, 1994, 24 Pa.B. 6423.

   This section cited in 55 Pa. Code §  178.104 (relating to disposition of assets and fair consideration provisions for transfers on or after July 30, 1994).