Under current law, certain transfers of assets by a Medicaid applicant or recipient do not result in any transfer penalties. Any asset of any value or type can be transferred without penalty to a disabled child of any age. The law allows for transfers to the applicant’s child who is certified blind or disabled.

The production of the child’s disability award letter to the Medicaid agency can serve as proof of the child’s disability.

While producing the child’s disability award letter may be straightforward, what happens in a case where no disability determination was ever made?

According to a New York State Department of Health directive (NYS DOH GIS 08 MA/036), you may request a Medicaid disability review for the non-applying adult child. Thereafter, a disability review packet will be compiled and sent to the State Review Team for determination.

Although assets in any amount can be transferred to a disabled child of any age without affecting the Medicaid eligibility of the transferor, several other factors must be considered. The disabled child may be receiving government benefits and it should be determined whether the transfer will affect the disabled child’s eligibility for such benefits. For example, if the disabled child is receiving SSI benefits, a transfer to the child could mean the loss of the child’s SSI as well as Medicaid. Whenever a transfer of assets to anyone other than a spouse is contemplated, the gift tax consequences of the transfer must be explored as well.

If you have any questions regarding transfers to a disabled child, please contact us.

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2 Responses to “Can the transfer exemption to a disabled child, under the Medicaid laws, still be utilized if a disability determination was never made?”

  1. Anthony delgiudice

    Hello and Happy New Year. I have a question regarding transferring assets to a disabled child for Medicaid eligibility. I am currently disabled and receiving social security disability. Does this qualify for not having the 5 year look back period for Medicaid. I do have an award letter from social security. Thank you. Anthony Delgiudice.

    Reply
    • Russo Law Group, P.C.

      Dear Anthony,

      Thank you for your question.

      I am happy to answer your question, wherein you wrote I am currently disabled and receiving social security disability. Does this qualify for not having the 5-year look back period for Medicaid. I do have an award letter from social security.

      The receipt of Social Security Disability (SSD) would result in meeting the criteria for the disabled child exemption. If the applicant were applying for Medicaid coverage in a nursing home, there still would be a 5 year look back period. However, if the assets were transferred to a recipient receiving SSD, within the 5-year look back, the transfer would be considered exempt and would result in no penalty to the applicant.

      Although assets in any amount can be transferred to a disabled child of any age without affecting the Medicaid eligibility of the transferor, several other factors must be considered. If you are considering this option, we recommend that you contact your estate planning attorney to discuss this matter.

      Sincerely yours,

      Kim N. Christian, Esq. | Partner

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