(updated 02/08)

Medicaid imposes a period of ineligibility for nursing home benefits on individuals who transfer assets for less than fair market value. The penalty period is based on the value of any assets transferred during the five years prior to application, and starts on the date the assets were transferred or the date the individual becomes eligible for Medicaid, whichever is later.

Countable assets include –

• Your bank accounts & certificates of deposit, stocks, U.S. saving bonds
• land other than your homestead property,
• the cash value of life insurance which exceeds $1,500,
• more than one automobile,
• Some promissory notes, mortgages, and loans,
• Equity in your homestead that exceeds $500,000 in most cases,
• improper asset transfers prior to 2/8/2006,
• anything else you can exchange for cash, food, or shelter.

Countable assets does not include –

Amounts in excess of the these limits are included as countable assets.

• Your homestead property – where you live or intend to return if you are in a nursing home, or is occupied by your spouse, or your siblings, or your minor child or disabled child of any age. However, individuals with more than $500,000 in home equity are ineligible for nursing home benefits. States may raise the limit to $750,000.
• Life estate in another individual's home (having the right to live in a home that someone else owns).
• All personal effects and household goods (not including collector's items or antiques which have some value).
• One automobile regardless of value for some programs, or up to a fair market value of $4,650 (for 2008) for other programs. The Food Stamp program currently exempts any vehicle whose equity value is less than $1,500 for persons aged 60 or older.
• Life Insurance owned by the claimant up to a $1,500 face (cash) value is exempt, however, the face value of this insurance reduces the amount of exempt burial funds described below. The claimant and spouse can both have exempted life insurance with a face value of $1,500 or less on each. Also exempt are term policies with no cash value, group policies provided by an employer or required for employment, policies on the life of an ineligible family member who is not the claimant’s responsible relative, and some policies on the life of the claimant owned by someone other than the claimant.
• Funeral merchandise, such as a grave site or plot, casket, urn, vault, mausoleum, niche, headstones, markers, opening/closing the grave site, etc.
• Up to $1,500 identified in a separate account or trust as a burial fund to cover funeral services or cremation expenses (reduced by amount of Life Insurance described above) ... OR ... $5,219 (for 2008, increases 3% per year) in an irrevocable prepaid burial contract with a funeral home or assigned life insurance.
• The interest earned on burial funds.
• gifts of clothing.
• one wedding ring and one engagement ring.
• retroactive SSI or Social Security benefits for up to nine months after you receive them (including payments received in installments).

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Spend down is the difference between your countable assets and monthly income and the amounts allowed by the State. You may “spend down” your assets and monthly income on allowable medical expenses to become eligible for assistance programs. See your county office of the Illinois Department of Human Services (formerly public aid) for more information.

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Specified net income, for the Food Stamp program, is your net income after certain allowable expenses are deducted, such as SSI income or monthly medical expenses after $35 out-of-pocket costs are paid. See your county office of the Illinois Department of Human Services (formerly public aid) for more information.

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Property & estate claims liens – the State has the legal right to recover the amount of financial assistance you receive through certain programs, such as AABD cash and medical assistance. Under certain circumstances, liens and estate claims can be made if you receive services under the Community Care Program. However, you will be notified and must sign an acknowledgement form of a possible lien or estate claim before you receive any benefits or services.

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Citizenship Requirements – means you must be and are able to prove that you are a U.S. citizen or eligible immigrant and live in Illinois to receive benefits.

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