WSR 97-05-040

PERMANENT RULES

DEPARTMENT OF

SOCIAL AND HEALTH SERVICES

(Public Assistance)

[Filed February 14, 1997, 4:50 p.m.]

Date of Adoption: February 12, 1997.

Purpose: To provide further clarification of the rules regarding transfer of assets and the establishment of a period or periods of ineligibility for an institutionalized person.

Citation of Existing Rules Affected by this Order: Amending WAC 388-513-1365.

Statutory Authority for Adoption: RCW 74.08.090, 74.04.050, 74.04.057.

Other Authority: RCW 74.09.585, 17 of the Social Security Act.

Adopted under notice filed as WSR 97-02-032 on December 24, 1996.

Changes Other than Editing from Proposed to Adopted Version: Clarifies that a gift or donation of $1000 or under in any month is not considered as the transfer of an asset.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, amended 0, repealed 0; Federal Rules or Standards: New 0, amended 0, repealed 0; or Recently Enacted State Statutes: New 0, amended 0, repealed 0.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, amended 0, repealed 0.

Number of Sections Adopted on the Agency's own Initiative: New 0, amended 1, repealed 0.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, amended 1, repealed 0.

Number of Sections Adopted using Negotiated Rule Making: New 0, amended 0, repealed 0; Pilot Rule Making: New 0, amended 0, repealed 0; or Other Alternative Rule Making: New 0, amended 1, repealed 0.

Effective Date of Rule: Thirty-one days after filing.

February 12, 1997

Merry A. Kogut, Manager

Rules and Policies Assistance Unit

AMENDATORY SECTION (Amending Order 3818, filed 12/28/94, effective 1/28/95)

WAC 388-513-1365 Transfer of assets. (1) The terms in this section shall have the following definitions:

(a) "Assets" means all income and resources of a client and the client's spouse, including such income or resources the person is entitled to but does not receive because of action by:

(i) The client or the client's spouse;

(ii) A person, court or administrative body, with legal authority to act in place of or on behalf of the client or the client's spouse; or

(iii) A person, court or administrative body, acting at the direction or upon the request of the client or the client's spouse.

(b) "Community spouse" means the person married to an institutionalized client.

(c) "Fair market value (FMV)" means the price the asset may reasonably sell for on the open market at the time of transfer or assignment. A transfer of assets for love and affection is not considered a transfer for FMV.

(d) "Institutional services" means a level of care provided in a nursing facility, equivalent nursing facility in a medical institution, or in a home-based or community-based program under WAC 388-515-1505 or 388-515-1510.

(e) "Institutional spouse" means a client who meets the requirements of subsection (1)(f) of this section and is married to a spouse who is not:

(i) In a medical institution;

(ii) In a nursing facility; or

(iii) Receiving home-based or community-based services under WAC 388-515-1505 or 388-515-1510.

(f) "Institutionalized client" means a person who is:

(i) An inpatient in a nursing facility;

(ii) An inpatient in a medical institution where the payment is made for a level of care provided in a nursing facility; or

(iii) In need of the level of care provided in a nursing facility or medical institution, but receiving home-based or community-based services under WAC 388-515-1505 or 388-515-1510; and

(iv) Expected to be in ((the)) a nursing facility, in a medical institution, or receiving home-based or community-based services under WAC 388-515-1505 or 388-515-1510 for thirty consecutive days or more.

(g) "Transfer" means any act or omission to act, by a client or a nonapplying joint tenant, whereby title to or any interest in property is assigned, set over, or otherwise vested or allowed to vest in another person, including but not limited to:

(i) Delivery of personal property;

(ii) Bills of sale, deeds, mortgages, and pledges; or

(iii) Any other instrument conveying or relinquishing an interest in property.

(h) "Uncompensated value" means the FMV of an asset at the time of transfer minus the value of compensation the person receives in exchange for the resource.

(i) "Undue hardship" means the client's inability to meet shelter, food, clothing, and health needs.

(j) "Value of compensation received" means the consideration the purchaser pays or agrees to pay. Compensation includes:

(i) All money, real or personal property, food, shelter, or services the person receives under a legally enforceable agreement whereby the eligible client shall transfer the resource; and

(ii) The payment or assumption of a legal debt the client owes in exchange for the resource.

(2) The department shall not impose any penalty for the transfer of any exempt asset for less than FMV except as specified under subsection (((9))) (11) of this section when the client transfers the client's home.

(3) The department shall determine whether the client or the client's spouse transferred an asset within a look-back period of the following duration:

(a) Thirty months when determining eligibility for services received:

(i) On or before September 30, 1993; or

(ii) On or after October 1, 1993, with respect to transfers of assets on or before August 10, 1993;

(b) Thirty-six months when determining eligibility for services on or after October 1, 1993, with respect to transfers of assets on or after August 11, 1993; or

(c) Sixty months when determining eligibility for services received on or after October 1, 1993, and all or part of the transferred assets are placed in a trust established on or after August 11, 1993, and all or part of the assets are deemed transferred as described under WAC 388-505-0595.

(4) The department shall consider the look-back period as the number of months described under subsection (3) of this section but not including any month before August, 1993 in the case of subsections (3)(b) and (3)(c) of this section, before the first day of the month the client:

(a) Becomes an institutionalized person, if the client is eligible for medical assistance on that date; or

(b) Applies for institutional care when the client is not eligible for medical assistance as of the date the client initially became institutionalized.

(5) The department shall calculate a period of ineligibility for nursing facility services, equivalent nursing facility services in a medical institution, and services described under WAC 388-515-1505 and 388-515-1510, for the institutionalized client when the client or the client's spouse transfers an asset for less than FMV during or after the look-back periods as described under subsections (3) and (4) of this section.

(6) When the client or the client's spouse has transferred assets, the department shall establish a period of ineligibility:

(a) Under subsection (7) of this section for assets transferred on or before August 10, 1993; ((and))

(b) Under subsection (8) of this section for assets transferred on or after August 11, 1993 and on or before February 28, 1997; and

(c) Under subsection (9) of this section for assets transferred on or after March 1, 1997.

(7) With respect to transfers of assets on or before August 10, 1993, and in any month within the applicable look-back period, ((such)) the department shall establish a period of ineligibility ((shall)) which:

(a) Begins the first day of the month in which the assets were transferred;

(b) ((Be)) Is the lessor of:

(i) Thirty months; or

(ii) The number of whole months found by dividing the total uncompensated value of the assets transferred in the month by the state-wide average monthly cost of nursing facility services to a private patient at the time of the application; and

(c) Runs concurrently when transfers of assets have been made in multiple months during the look-back period.

(8) With respect to transfers of assets on or after August 11, 1993 and on or before February 28, 1997, and in any month within the applicable look-back period occurring on or after August 11, 1993, ((such)) the department shall establish a period of ineligibility ((shall)) as follows:

(a) For such transfers during the look-back period((, except for a transfer made during a period of ineligibility established under this section)):

(i) The period of ineligibility shall begin on the first day of the month ((in the look-back period)) in which such assets were transferred; and

(ii) Equal the number of whole months found by dividing the total, cumulative uncompensated value of all such assets transferred during the look-back period by the state-wide average monthly cost of nursing facility services to a private patient at the time of application.

(b) For such transfers of assets made while receiving medical assistance as an institutionalized client, or for such transfers made during a period of ineligibility established under this section:

(i) The period of ineligibility shall begin on the first day of the month in which such assets were transferred, or after the expiration of all other periods of ineligibility established under this section, whichever is later; and

(ii) Equal the number of whole months found by dividing the total, uncompensated value of such transferred assets by the state-wide average monthly cost of nursing facility services to a private patient at the time of application.

(9) With respect to transfers of assets on or after March 1, 1997 and in any month within the applicable look-back period occurring on or after August 11, 1993, the department shall:

(a) For a single transfer or multiple transfers within a single month during the look-back period:

(i) Add the value of all transferred assets;

(ii) Divide the total value of all transferred assets by the statewide average monthly cost of nursing facility services to a private patient at the time of application; and

(iii) Establish a period of ineligibility:

(A) Equal to the number of whole months as established under subsection (9)(a)(i) and (ii) of this section; and

(B) Which begins on the first day of the month of transfer.

(b) For multiple transfers during multiple months during the look-back period:

(i) Treat assets transferred in each month as a separate event with its own period of ineligibility;

(ii) Divide the total value of assets transferred in a month by the statewide average monthly cost of nursing facility services to a private patient at the time of application; and

(iii) Establish multiple periods of ineligibility:

(A) Equal to the number of whole months as established under subsection (9)(b)(i) and (ii) of this section; and

(B) Which begin the latter of:

(I) The first day of the month of each transfer; or

(II) The first day of the month following the expiration of a previously computed period of ineligibility.

(10) The department shall not consider gifts or donations totaling one thousand dollars or under in any month as transfers of assets under subsections (7), (8), or (9) of this section.

(11) The department shall not find the institutionalized client ineligible for institutionalized services when the transferred asset was a home and the home was transferred to the client's:

(a) Spouse; or

(b) Child who is:

(i) ((Aged,)) Blind, or permanently and totally disabled; or

(ii) Twenty years of age or under.

(c) Sibling who has:

(i) Equity in the home; and

(ii) Lived in the home for at least one year immediately before the client became institutionalized.

(d) Child, other than described under subsection (11)(b) of this ((sub))section((,)) who:

(i) Lived in the home for two years or more immediately before the client became institutionalized; and

(ii) Provided care to the client to permit the client to remain at home.

(((10))) (12) The department shall not find the institutionalized client ineligible for institutionalized services if the asset other than the home was transferred:

(a) To the client's spouse or to another person for the sole benefit of the client's spouse;

(b) From the client's spouse to another person for the sole benefit of the client's spouse;

(c) To the client's blind or permanently and totally disabled child, or to a trust established solely for the benefit of such child; or

(d) To a trust established solely for the benefit of a person sixty-four years of age or younger who is disabled according to SSI criteria.

(((11))) (13) The department shall only consider a transfer of assets or trust established under subsection (12) of this section for the sole benefit of the named person when:

(a) The transfer or trust document provides for the expenditure of funds for the benefit of the person; and

(b) Such expenditures must be on a basis that is actuarially sound, based on the life expectancy of the person.

(14) The department shall consider a transfer of asset or trust established under subsection (12) of this section which does not meet the criteria found under subsection (13) of this section under subsection (7), (8), or (9) of this section.

(15) The department shall not find a person ineligible under this section when the client can satisfactorily show the department that:

(a) The client intended to transfer the asset at FMV or other valuable consideration; ((or))

(b) The client transferred the asset exclusively for a purpose other than to qualify for medical assistance;

(c) All assets transferred by the client for less than FMV have been returned to the client; or

(d) The client's denial of eligibility would cause an undue hardship.

(((12))) (16) The department shall not impose a period of ineligibility on a client unless the client is subject to a period of ineligibility, as calculated under this section, with respect to any month for which eligibility for institutional services is sought.

(17) A client or the spouse of such a client, the department determines ineligible under this section, may request a hearing to appeal the determination of ineligibility. The procedure for the hearing is described under chapter 388-08 WAC.

(((13))) (18) The department shall:

(a) Exempt cash received from the sale, transfer, or exchange of an asset to the extent that the cash is used for an exempt asset within the same month, except as specified under WAC 388-511-1160; and

(b) Consider any cash remaining as an available asset.

(((14))) (19) When the transfer of an asset has resulted in a period of ineligibility for one spouse, the department shall not impose a period of ineligibility for the other spouse for the transfer of the same asset.

(20) The department shall disregard the transfer of assets to a family member when:

(a) The family member has received the assets for providing care to the client which keeps the client out of a nursing facility;

(b) The client and the family member initiated a written agreement at the time the care began; and

(c) The written agreement states:

(i) The fair market value of the care; and

(ii) That the care is to be paid from the assets of the client.

(21) When the fair market value of the care described under subsection (20) of this section is less than the value of the transferred asset, the department shall consider the difference as the transfer of an asset without adequate consideration.

(22) The department shall consider the transfer of an asset in exchange for care given by a family member without a written agreement as described under subsection (20) of this section as a transfer of an asset without adequate consideration.

(23) When the transfer of an asset includes the right to receive a stream of income received on a regular basis which has been transferred to a spouse, to the extent the income is not derived from a transferred resource, the department shall consider such a transfer under WAC 388-513-1330(6).

(24) When the transfer of an asset includes the right to receive a stream of income received on a regular basis which has been transferred to a person other than a spouse, to the extent the income is not derived from a transferred resource, the department shall:

(a) Add the total amount of income expected to be transferred during the person's lifetime, based on an actuarial projection of the person's life expectancy to the extent the income is not derived from a transferred resource; and

(b) Divide the total value of the transferred income by the statewide average monthly cost of nursing facility services to a private patient at the time of application; and

(c) Establish a period of ineligibility:

(i) Equal to the number of whole months as established under subsection (24)(a) and (b) of this section; and

(ii) Which begins the latter of:

(A) The first day of the month the person transferred the income stream; or

(B) The first day of the month following the expiration of a previously computed period of ineligibility.

[Statutory Authority: RCW 74.08.090. 95-02-027 (Order 3818), 388-513-1365, filed 12/28/94, effective 1/28/95; 94-10-065 (Order 3732), 388-513-1365, filed 5/3/94, effective 6/3/94. Formerly WAC 388-95-395.]

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