What are Exempt Medicaid Transfers to a Disabled Child in New York?

What are Exempt Medicaid Transfers to a Disabled Child in New York?

The general rule in New York for Medicaid applicants is that any gifts or transfers of assets (money or property) within the “look back” period will trigger a “penalty period” of ineligibility for benefits for that applicant.

A transfer may impact a disabled child’s eligibility because he or she may be receiving government benefits. If the disabled child is receiving SSI benefits, a transfer to the child could mean the loss of the child’s SSI. The same may be true for the disabled child’s Medicaid benefits. However, some asset transfers in New York by a Medicaid applicant or recipient don’t result in transfer penalties. 

Any Asset may be Transferred to a Disabled Child

The law stipulates that any asset of any value or type may be transferred to a permanently and totally disabled child of any age without the imposition of a penalty. The exception is stated in federal law 42 U.S.C. § 1396p(c)(2)(B)(iii). As such, transfers to an applicant’s child who’s certified blind or disabled are permitted.

The production of the child’s disability award letter to the Medicaid agency can be used as proof of the child’s disability. This letter is sometimes known as a “budget letter,” a “benefits letter,” a “proof of income letter,” or a “proof of award letter.” Note that you can’t get a benefit verification letter online for another person, such as a spouse or child, unless he or she is a beneficiary for whom you are an active representative payee.

In the event that there was never a disability determination made, the New York State Department of Health advises to request a Medicaid disability review for the non-applying adult child. A disability review packet will then be assembled and sent to the State Review Team for a Medicaid disability review for the child. This includes adult children under 65 as well as those over age 65. However, if the adult child has an acceptable disability certification that’s currently effective or that was effective at the time of their 65th birthday, a disability review isn’t required.

Exempt Transfers

Again, any asset of any value or type may be transferred to a permanently and totally disabled child of any age without a penalty. Let’s look at some common situations:

Exempt Medicaid Transfers to a Disabled Child
The law stipulates that any asset of any value or type may be transferred to a permanently and totally disabled child of any age without the imposition of a penalty. The exception is stated in federal law 42 U.S.C. § 1396p(c)(2)(B)(iii). As such, transfers to an applicant’s child who is certified blind or disabled are permitted.

The Transfer of a Home

The home of an applicant may be transferred by him or her or their spouse to a certified blind/disabled child of any age. In fact, the child may over age 65.

Transfers of Property other than the Home

The New York State Department of Health says that the transfer of asset penalties aren’t imposed when an asset other than the individual’s home is transferred by the applicant or his or her spouse to the person’s child who’s certified blind or disabled.

In addition, the law allows the transfer of cash without requiring it to be held in a trust. Again, the child may be over age 65.

Important Note

While the law says that any assets in any amount can be transferred to a disabled child of any age without impacting the transferor’s Medicaid eligibility, there are a number of other factors that you should examine.

For example, a disabled child may be receiving government benefits. If so, an attorney should help determine if the proposed transfer will impact the disabled child’s eligibility for benefits, such as Social Security Insurance (SSI) benefits. A transfer to the child, in that case, could result in the loss of the child’s SSI as well as Medicaid. 

In addition, when thinking of a transfer of assets to anyone other than a spouse, the gift tax consequences of that transfer must be considered. 

The New Community Medicaid Look Back Period

Recently, the state enacted a Community Medicaid “look back” period that was scheduled to go into effect on July 1, 2021; however, the effective date for this has been postponed until at least January 1, 2022. Once implemented, this new look back period will be 30 months, and will apply to transfers made on or after October 1, 2020.

Community Medicaid pays for a number of medical services that can help an individual continue to live in their home. Some of the covered services include:

  • Physician and clinic services;
  • Lab testing;
  • X-rays; 
  • Prescription and non-prescription medicines;
  • Home care and personal care aides;
  • Adult day care;
  • Transportation to medical care;
  • Physical, occupational and speech therapy;
  • Mental health services; and
  • Durable medical equipment like wheelchairs.

Speak with an Experienced Estate Planning Attorney 

An experienced estate planning and Medicaid attorney knows that Medicaid’s penalties for transfers of assets have several exceptions, like transfers that are made by a parent to his or her disabled child. 

Ask an experienced attorney at EJRrosenlaw to help you with any Medicaid questions, and consider a comprehensive estate plan  for you and your family.

Ariel S. Rosenzveig
Ariel Rosenzveig

Ariel S. Rosenzveig received his Juris Doctor from the Benjamin N. Cardozo School of Law in May, 2011, and has been practicing law with the firm since August, 2011. During his summers while in law school, Ariel interned with the United States Commodity Futures Trading Commission in New York and with the Securities & Futures Commission in Hong Kong, China. While in law school, Ariel served on the staff of the Cardozo Public Law, Policy & Ethics Journal, volunteered with the Cardozo Advocates for Battered Women, and participated in the National Institute for Trial Advocacy’s Intensive Trial Advocacy Program. Prior to attending law school, Ariel worked as an arbitrage trader for a small proprietary trading firm on Wall Street. Ariel graduated summa cum laude from Yeshiva University in 2006.

Ariel is licensed to practice law in the states of New York and New Jersey, and is a member of the New York State Bar Association (NYSBA), NYSBA’s Elder Law section, and the National Academy of Elder Law Attorneys (NAELA). In June, 2015, Ariel successfully completed a certificate program in mediation through the Program on Negotiation at Harvard Law School.