My father had cashed out a small pension, 3 years ago and spent it to pay random bills, debts, and medical adaptive necessities for home at that time. Does Medicaid deny him coverage now due to 5 year look back? He now had to move into a separate part of our home and pays me rent. I care for him and do all his shopping, food, care, etc. I don't consider him having any assets?

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He might not have assets (land, home, car) but he does have income.

The cash out $ - that would have been an asset - and if it was totally spent by him on his needs, his care, likely not an issue for Medicaid. You do want to make sure he keeps his bank statements & receipts for larger priced items he bought. Please ask & make sure there was no tax implications involved in doing cash out.

His paying you rent might be the sticky for his Medicaid eligibility. Rent is income to the property owner and should be reported as rental income on your taxes. Having rentals has its own set of tax issues. You want some sort of rental agreement that you both sign off on and get it notarized.

but you might want to instead of his paying rent is for him to pay you a personal services contract each month. He has some sort of income, like his SS$ to pay you from. Now all this has to be All above board with taxes and fica done. But depending on your age, it could be enough $ each month to add to base income and build up your own future SS retirement and maybe allow you to put off filing till closer to 70 so you get the max SS$ possible. Or if you don’t need the income, use it for an emergency fund. And depending on your income the extra $ he pays you might not adversely affect your tax rate. What he can pay you is based on your community standards so maybe $15 -$22 hr for 10-20 hrs a week. Average SS is abt $1200, dad could pay you $200 a week & leaves him $400 for his drug copay or food or personal spending. $800 a mo paid to you then with fica, taxes paid on it. It would be an extra 7k a year income you can save or use however.

Its somehting to mull over & discuss with a tax pro &/or elder law attorney. Sometimes extra personal income is better than rental income.
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If he spent the money to live on and to modify his home, he should be fine.

What they are looking for is fraud, did his family see this coming and have him cash it out and give them each large cash gifts or a home or (insert big ticket item).

You will see questions on here where people are asking how to protect their inheritance and get their LO on Medicaid. This is what can not happen, if they catch this going on it is very costly to the people that did it and it puts the senior at risk because Medicaid will pull out and the family will have to pay up.

Sad and sick behavior, but rampant.

From what you said, he should be fine. You do want to have a rental agreement and caregiver agreement in place for his payments to you. Those could throw up a flag if no contracts exist. The social worker at Medicaid will be able to explain how it works.

Being open and honest will help you understand what you are facing.

Best of luck.
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caringkid1950 Feb 2019
Thank you! No big money here, just want to get him the help he needs. I'm gonna just try to apply with help this time.
I Will posit to you what someone just did for me re the estate sale and Medicaid. Call and ask. Therefore, if there is a penalty, you will be prepared and know what you have to do.
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