My Dad is in the nursing home and has been for a year. Can he give his 7 children Christmas gifts of a $1000?

Dad can do whatever with his $. BUT if in the future, Dad should need to apply for Medicaid to pay for his continued stay in the NH, then those 1K gifts would cause a transfer penalty by Medicaid. Medicaid can require up to 5 years review on all financials. So really the 7K will show up and be an issue.

Transfer penalties are totally sticky to deal with. If there are other possible "gifting" that has already been done, they too will show up, this could all get very complicated. Not worth running the risk.

I agree that gifts do not qualify as a spend down. He could though, prepay and plan his funeral. That would take a lot more that the $7,000.

No, gifts are penalized under Medicaid. He would be expected after spend down to pay around $7K out of pocket before he would qualify. He can purchase reasonable gifts for Christmas. I don't know what the upper price limits of such gifts would be.