Eligibility Online Manual

M804 Determining Resource Transfer Penalties

Purpose: This section will assist in determining resource transfer penalties.

Current Policy Effective Date: September 1,2018

Date Last Reviewed: August 27, 2018

Previous Policy: March 1, 2018


1. Penalties Apply To Non-Exempt Resource Transfers

Penalties for transferring a resource must be applied when applicants or clients cannot provide proof the transfer occurred for reasons other than gaining or maintaining eligibility.

2. Determining Uncompensated Value Of Transfers

The uncompensated value of a transfer is calculated by using 80% of the current market value of the transferred resource and deducting all of the following that apply:

    • Amount of the lien(s).

    • Unpaid principal of the mortgage or loan existing against the resource.

    • Any compensation received.

Example 1: Current market value - $100,000 x 80% = 80,000 - $40,000 (Mortgage) - $40,000 (Compensation received) = $0 (no transfer penalty)

Example 2: Current market value - $80,000 x 80% = 64,000 - $40,000 (Mortgage) = $24,000 (amount of transfer penalty). See Table 9 on how to calculate the penalty period.

The uncompensated value of jointly owned resources is calculated by using 80% of the current market value of the applicant or client's interest in the transferred resource, and deducting any compensation received for the resource.

3. Calculating Transfer Penalties

The uncompensated transfer value of the resource should be divided by the average private pay rate, refer to Table 1A.

    • Penalties must be figured on all days affected by the transfer. Reference Table 9 to determine the look back and penalty period.

4. Transfer Penalty Must Be Split Between Spouses

The transfer period must be split between two spouses if:

    • An institutionalized spouse has a transfer penalty due to a transfer made by the community spouse.

    • AND

    • The community spouse later becomes institutionalized.

The remainder of the penalty period must be assigned to the surviving institutionalized spouse if one spouse dies.

5. Transfer Penalty Waived For Undue Hardship

The transfer penalty must be waived if imposing the penalty would result in undue hardship, as determined by the Wyoming Department of Health (WDH).


Defining Requirement: 20 CFR 416, Subpart L

Clarifying Information:

Worker Responsibilities:

Documenting Transfer Penalties

1. Document date transfer occurred.

2. Document calculation used to determine uncompensated value of transferred property.

3. Document when penalty begins and ends.

Calculating Split Delayed Eligibility for Spouses

1. Determine number of months remaining in delayed period of eligibility.

2. Subtract from the original number.

3. Split between couple.

Establishing Undue Hardship

1. Receive Medicaid Hardship Exception Request (DHCH-303) from client.

2. Require the following verifications to be provided:

2A. Medicaid Hardship Exception Physician Statement DHCF-304.

2B. Require the client to meet one of the following criterion:

    • Receiving party cannot be located by the individual, spouse, fiduciary, or an agent of the nursing facility and all attempts to locate the receiving party have been exhausted;

    • Transferred resource was due to theft, fraud, or financial exploitation of the individual or their spouse, which has been reported and pursued through Adult Protective Service and law enforcement; or

    • The individual has exhausted all reasonable legal means to recover or regain possession or obtain fair market value of the transferred resource.

      • This may include seeking the advice of an attorney and pursuing legal or equitable remedies, such as asset freezing, assignment, or injunction; seeking modification, or nullification of a financial instrument, cooperating with any attempts to recover the transferred asset.

3. Approve undue hardship when client meets the criteria above and has provided the physician statement and required verifications.