What defines “giving away money” that disqualifies a person for Medicaid?

If a person who wishes to apply for Medicaid for a nursing home stay makes a transfer of any asset, without it being in exchange for something of equal value, then that is a gift of the difference in value. All such gift amounts made within the five years prior t the date of a Medicaid application are totaled at that time, and a penalty period is assessed for a certain number of months.

So for example, if I transfer $500 to my daughter in exchange for her helping me out, that is a gift of the full $500 unless she has given me an itemized list of what she did for me before or contemporaneous with the transfer of $500 to her, and the value of her work equals or exceeds $500. In other words, if she helped me out last year, but did not bill me at that time, I cannot now give her money for that service; it's too late.

You will find these rules in the Medicaid regulations of the state in which you reside. The federal rules simply mention "uncompensated transfers," i.e., gifts.

For a complete discussion of the rules of gifting for Medicaid purposes, see the chapter in my book "How to Protect Your Family's Assets from Devastating Nursing Home Costs: Medicaid Secrets" (MedicaidSecrets.com) or the less-expensive eBook "Gifts: Avoiding the Penalties," available here: medicaidsecrets.com/eBooks.html

Not in the biz, but think of what you'd do if it were the IRS. If you're buying medical supplies for them, keep the receipts. They should also write "Repayment for X or Y" on the checks.

Bless you. Also, keep receipts in addition to annotating checks with the reason in the memo line.. (For all you do for me is likely to not be sufficient in my opinion.)
You may also want to refresh yourselves on what assets are "countable Medicaid assets."

Grace + Peace,

Bob

If they look like gifts at $500 a time, they will, yes. You will need to demonstrate that these are not gifts of affection and parental gratitude, but are in fact reimbursement of money that you have already laid out on your parents' behalf for items that they need.

Ideally, stop doing that. Order your mother's supplies online and pay for them with your parents' money, not your own. Or keep any checks they give you in a separate, dedicated account and keep good records of what you are spending it on.

For now, you'd better add up and gather together any receipts, invoices and bank statements that will prove the pattern of spending. As long as you can show that you were in fact spending the money on your parents' needs it shouldn't matter too much what a frail elderly gentleman noted on the check stub.

This was most helpful. Thank you all so very much. I was just focused on getting things done. I’ll do a better job of keeping records while I’m doing it. I’ve learned so much from all of you, from my own and all the other questions. Bless you all!

Keep receipts for everything including groceries you shouldn't have a problem if you have the receipts. Medicaid has a 5 yr look back just keep everything and make sure you have the receipts you should be ok.

Melissa, I am moving your question back toward the front of the list. Hopefully someone will be able to answer your question.

Melissa, You have some good advice about expenditures. However, I am going to suggest a "white lie" for your parents sake. You may find that they still wish to write those checks. It gives them a sense of independence. My mother gives me checks as gifts. I take them and thank her. Later I tear them up and since I manage her finances, she does not know it hasn't been cashed. She gets to give. My thanks to her is for her giving.Everybody is happy.

Most banks don't return checks anymore. You have to request them. I pay $2 a month for mine to show at the bottom of my statement. Medicaid looks at statements. Don't think $500 a month withrawal a month would send up any flags. Ask your parents to put supplies in the memo line. As said, keep all receipts. I found those little bank books help. They already have debit and credit columns. List what you spent and enter the amount of the check when received.

Anytime you're on any public assistance program, giving or even lending money is frowned upon. That's because those kinds of programs are actually for those who really do need them due to lack of money and resources to care for their own needs. Anytime you're on public programs, you're supposed to use any money given to you by the state for your own basic needs. There's really not supposed to be any wiggle room for giving away or even lending money to anyone