Will Small Gifts Really Disqualify My Mother from Medicaid?

Yes, any gifts can cause a period of ineligibility for Medicaid. The period of time is determined by the amount of money given away and the average cost of nursing home care in the state, and only gifts made during the five years before moving to a nursing home, spending down, and applying for benefits are taken into account. So, if for instance the average cost of a nursing home was $300 a day in your state and over the five years prior to applying for benefits your mother gave away $3,000, she would be ineligible for benefits for 10 days. The family would have to come up with the funds to pay for her care during that time.

That said, the small gifts that you are describing, would likely "fall under the radar." While your mother would be obligated to report all gifts made during the five-year "look-back" period, such small gifts would probably never be discovered. Further, Medicaid is only supposed to penalize gifts made for the purpose of preserving assets and qualifying for benefits. That does not appear to be the purpose of the gifts you are describing. In short, the technical advice and the advice that any elder law attorney will feel most comfortable with is not to make any gifts. Practically, sporadic gifts of under $100 each are unlikely to present a problem. Just don’t stretch the envelope and try to use this as a way to save assets from being spent on your mother's care.

For more information about Medicaid's asset transfer rules, click here.