ALTCS Financial Eligibility Guidelines

There are three financial eligibility tests that an applicant must pass.

Resource Test * Income Test * Transfer Test

RESOURCESResources / assets are cash or other real or personal property that an individual owns which can be used to meet the needs of food or shelter.

For single applicants … do you have less than $2,000.00 in countable assets?

For married applicants … do you and your spouse have less than $26,180.00 in combined countable assets (for year 2017)?

If you answered yes, you may be resource eligible for ALTCS now.

If you answered no, you may want to consider scheduling an initial consultation to find out how you can become resource eligible for ALTCS.

Resources / assets may be, but are not limited to …

401(k) – 5th wheel – agent orange – Alaska Native claims settlement – Aleutian and Pribilof Islands payments – animals – annuities – ATV – Austrian Reparation payments – automobiles – boats – bonds – brokerage funds – buildings – burial funds – burial insurance – burial plots – burial space – business – business property – camper – cash – checking accounts – corporate bonds – credit union accounts – cremation plans – crime victim payments – death benefits – disaster assistance – dividends – E bonds – EE bonds – educational assistance – endowment care – financial accounts – German reparation payments – golf cart – government bonds – grazing rights – headstone – home property – house – household goods & personal effects – I bonds – inheritances – insurance-funded burial plans – investment accounts – IRAs – irrevocable burial trust – interest – jewelry – Keough funds – land – life insurance policies – loan agreements – marker – mobile homes – money market accounts – motorcycles – municipal bonds – musical instruments – mutual fund shares – niche – off-road vehicles – opening/closing of gravesite – patient fund accounts – perpetual care – personal effects – preneed burial plans – promissory notes – property agreements – property in another state or country – real property – recreational vehicles – relocation assistance – retirement funds – reverse mortgage payments – Roth IRA – royalties – RVs – savings accounts – stocks – time deposits – time shares – trailers – travel trailers – trucks – trust funds – UTMA – US savings bonds – vacation property – vans – vehicle

If you answered no and you are married, you may want to consider scheduling an initial consultation to find out how you may be able to retain more than half of the combined assets.

COMMUNITY SPOUSE RESOURCE ASSESSMENT (CSRA)

Arizona is a community property state, all assets are combined when determining if an applicant qualifies under the ALTCS resource guidelines. The CSRA is used to establish the community assets that must be spent before the ALTCS applicant will qualify for medical assistance. Does this mean that if an ALTCS applicant with a community spouse has $500,000.00 in assets, that the applicant can only spend $250,000.00 and qualify for ALTCS?

NO! As with all bureaucratic rules, there are always exceptions.

ALTCS applicants who have a SPOUSE that resides in a community settingin their own home, assisted living center, adult care home, adult foster care home, or in another setting—but not a nursing home or hospital have a separate set of rules to determine resource eligibility. One part of those rules includes a CSRACommunity Spouse Resource Assessment.

The first thing that ALTCS does when establishing resource eligibility for community spouse cases is determine the First Continuous Period of Institutionalization (FCPI). ALTCS is looking for the first period9/1/1989 – present that the ALTCS applicant either needed ALTCS services or was in a hospital and/or nursing home for 30 consecutive daysThe 30 consecutive days could be any combination of services (home– and community-based services, hospitalizations, nursing facility care, assisted living care, or adult care home) that occurred for 30 consecutive days (without a break of 30 days in-between the different services)..

Once ALTCS establishes this date, the eligibility specialist requests verification of the value of all assets owned during that period of time. The reason that ALTCS does this is because it is assumed that the applicant and his/her spouse, more likely than not, owned more assets then, than now.

By using this policy, ALTCS is attempting to allow the community spouse to retain a greater share of the community assets. However, even if the assets were not higher at the FCPI, ALTCS will still use those numbers in the calculation.

ALTCS divides the assets in 1/2 and places each half on the appropriate side of the pie (1/2 for the person needing long term care and 1/2 for the spouse). ALTCS then compares the community spouse’s share to the minimum and maximum amounts that ALTCS will allow the community spouse to keepamount saved for spouse to live on, does not need to be spent down for the ALTCS spouse to qualify for medical assistance.

If the community spouse’s 1/2 of the assets are above the maximum CSRD (Community Spouse Resource Deduction) $120,900.00*, then the community spouse is only allowed to keep $120,900.00* and the difference must be spent before the applicant will qualify for ALTCS.

If the community spouse’s 1/2 of the assets is between $24,180.00* and $120,900.00*, then the community spouse is allowed to keep his/her half, but the remainder must be spent before the applicant will qualify for ALTCS.

If the community spouse’s 1/2 of the assets are below $24,180.00*, then the community spouse is allowed to keep a minimum of $24,180.00* and the difference must be spent before the applicant will qualify for ALTCS.

Please note that the applicant is still entitled to his/her $2,000.00 resource limit, too. So, add $2,000.00 to the numbers listed above to determine the maximum amount of resources they can have, as a couple, and still qualify for ALTCS.

Example 1*
Total Resources $300,000
Divided by 2 $150,000
Community Spouse Half $150,000
Compare to Min Limit $24,180 Max Limit $120,900
Greater than Max; Community Spouse Keeps $120,900
Total Resources minus Community Spouse Keeps $179,100
Minus ALTCS Spouse Resource Limit $2,000
Spend Down $177,100
Example 2*
Total Resources $200,000
Divided by 2 $100,000
Community Spouse Half $100,000
Compare to Min Limit $24,180 Max Limit $120,900
Between Min & Max; Community Spouse Keeps $100,000
Total Resources minus Community Spouse Keeps $100,000
Minus ALTCS Spouse Resource Limit $2,000
Spend Down $98,000
Example 3*
Total Resources $40,000
Divided by 2 $20,000
Community Spouse Half $20,000
Compare to Min Limit $24,180 Max Limit $120,900
Between Min & Max; Community Spouse Keeps $24,180
Total Resources minus Community Spouse Keeps $15,820
Minus ALTCS Spouse Resource Limit $2,000
Spend Down $13,820

Help understanding the CSRA and CSRD is only a phone call away!
Call 480/464.4968!

*These numbers are valid from 01/01/2017 – 12/31/2017.

INCOMEIncome is anything received by an individual which can be used to obtain food or shelter. Income can be received daily, weekly, bi-weekly, semi-monthly, monthly, quarterly, semi-annually, annually.

For single applicants … when added together is your total gross income equal to or less than $2,205.00 per month (for year 2017)?

For married applicants … when added together do you and your spouse have total gross income equal to or less than $4,410.00 per month (for year 2017)?

If you answered yes, you may be income eligible for ALTCS now.

If you answered no, you may want to find out how an Income-Only Trust (aka: Miller trust) can help you income qualify for ALTCS.

Income may be, but is not limited to …

aid & attendance – alimony – allocated – annuity – Black Lung – bingo winnings – building lease income – census – child support – commissions – compensation – contributions from others – corporation – disability insurance – earned income – educational – federal pensions – gambling winnings – gifts – honoraria – income from boarders – income from roomers – Indian gaming – inheritances – in-kind income – insurance awards – jury duty – land lease income – legal settlements – life insurance proceeds – loan agreements – lottery winnings – medical insurance payments – military allowances – military retirement – mortgage contract income – partnerships – pensions and retirement – public assistance – Railroad retirement – rebates – refugee assistance – refunds – recycling – reparation payments – relocation – rental income – royalties from book writing – royalties from song writing – royalties from inventing – sales contract income – self-employment – Social Security Disability – Social Security Retirement – Social Security Survivors – spousal maintenance – SSI – Supplemental Security Income – TANF payments – tips – Title IV foster care payments – trust income – unemployment – UTMA – vendor payments – Veterans Benefits – volunteer service programs – wages – winnings – workers compensation

Community Spouse Income Rules

The set of rules that ALTCS uses when one spouse is at risk of institutionalization and the other continues to reside in the community

There are initially two income tests to determine if a community spouse case will income-qualify for ALTCS.

The first test is to add up the countable income of both spouses. Then divide that total by half. If the half is greater than $2,205.00*, then the applicant is over income for the program. However, ALTCS completes a second test.

The second test only counts the income of the institutionalized spouse (applicant). If the applicant’s income total is less than $2,205.00*, then the applicant qualifies. If the income is greater than $2,205.00*, then ALTCS will do a third and final test.

The third and final test is to determine if the applicant’s income is less than the current private pay rate in Arizona. If it is, the applicant can create and fund an Income-Only Trust (AKA: IOT, or Miller trust) to income qualify for the program.

ALTCS Planning.net can assist the applicant in creating, signing, and funding his/her Income-Only Trust. Our fees are typically 30-75% less than some of our law firm competitors. Find out more.

*The income amounts stated are the income limits for the year 2017.

TRANSFERSTransfers are all items of value (resources/assets or income) that are sold, traded, transferred, or given away.

For single applicants … In the past five yearsEffective July 1, 2006, the current look-back period is five (5) years. have you given away any money or assets that you could have used to pay for your care?

For married applicants … In the past five years have you or your spouse given away any money or assets that you could have used to pay for care?

If you answered no, you may be transfer-eligible for ALTCS now.

If you answered yes, you may want to schedule an initial consultation to find out how ALTCS will view these transfers as uncompensatedThis includes items that were sold or transferred for less than current market value, what your period of ineligibility will be, and to see if there is a way to fix or adjust your eligibility.

For uncompensated transfers made after July 1, 2006, the transfer penalty is applied beginning in the month in which the applicant meets all of the ALTCS criteria and is approved for the program.

For uncompensated transfers made after October 1, 2007, a partial month penalty period is assessed based on the carry-over amount of the transfer. Additionally, a pro-rated share of cost is determined based on the number of days in the partial month that the applicant is eligible for full long term care benefits.

Transfers may include, but are not limited to…

assigning income to another person – assigning an asset to another person – causing an asset / resource to not be received or unavailable – causing income to not be received or unavailable – changing titles – changing deeds – changing the degree of ownership – closing accounts – converting annuities to monthly income – giving away an asset / resource – giving away cash – giving away income – loans to other persons – purchasing an annuity – purchasing assets / resources – receiving less than market value for the sale of assets / resources – removal of a name from an asset – sale of item – sale of assets / resources – surrendering assets – surrendering life insurance – surrendering annuities – trade or exchange of one asset for another

Burial Funds and Burial Plans

ALTCS has rules pertaining to all types of resources. There are some resources which do not affect ALTCS eligibility or are considered “excluded” when determining if the applicant’s total resources exceed the guidelines. Burial funds/burial plans are considered a resource and must be evaluated to determine if the value of the fund/plan affects resource eligibility.

ALTCS applicants can:

Designate and set aside a set amount as a burial fund
Prepay for a cremation plan; or
Prepay for a burial plan.

If one chooses to designate and set aside funds rather than purchasing a plan through a funeral/cremation provider, the maximum that can be designated and set aside, and still be excluded from the resource determination is $1,500.00 per person.

These funds can be in any form: cash on hand, funds in financial institution accounts, life insurance cash surrender value, stocks, bonds, etc.

If the designated fund exceeds $1,500.00, ALTCS counts the difference between the fund value and $1,500.00 as a countable resource and then adds it to the other countable resources to determine eligibility.

When funds are “designated” for burial, ALTCS requires the applicant or their representative to sign a form declaring under penalty of perjury, the date the resource was designated as a burial fund, the value of the fund at the time of designation, the owner of the fund, how the funds are being held, and for whom their being held.

In order for the fund to remain an excluded resource, the funds must be held separately from other resources. The applicant may not withdraw funds from this account without invalidating the designation.

When someone has more than $1,500.00 “designated” for burial and the difference when added to their other resources causes them to go over the resource limit, the applicant has a choice to reduce the fund to $1,500.00 and spend down the difference, or to take the funds and purchase a prepaid burial/cremation plan.

In Arizona, most prepaid plans (burial or cremation) are now funded by life insurance or an annuity. When an applicant chooses this method, ALTCS evaluates the plan’s excludability based on the applicant’s access to the life insurance/annuity proceeds.

If the plan is “revocably” assigned to fund a burial/cremation contract, the same exclusion limits apply—$1,500.00 per person.

If the “revocable” plan exceeds $1,500.00, then ALTCS counts the difference between the amount of the plan and $1,500.00 as a countable asset.

If the difference when added to the other countable resources exceeds the ALTCS resource limit, then the applicant can choose to “irrevocably” assign the policy/annuity to fund the burial/cremation plan.

This is a fairly simple process: contact the company, request an irrevocable assignment form, sign it, copy it, and then return it to the company. It is valid the moment you sign it and the company accepts the assignment.

If the prepaid plan is already irrevocably assigned to the funeral/cremation provider (or becomes irrevocable during the application process), ALTCS excludes the entire value of the burial/cremation plan so long as the entire plan is for the benefit of the ALTCS applicant and/or their spouse.

Q: Can an applicant have a prepaid burial of any value?

A: Yes, as long as it is “irrevocably” assigned to the funeral provider.

Q: Can an applicant have a prepaid burial plan and a designated burial fund?

A1: Yes, if the combined total of both is less than or equal to $1500.00 and the prepaid plan is “revocably” assigned to fund the burial/cremation plan

A2: No, if the combined total of both is greater than $1500.00

A3: No, if the prepaid plan is “irrevocably” assigned to fund the burial/cremation plan. Any time a plan is “irrevocably” assigned to fund a burial/cremation plan, whether the fund is less than or greater than $1500.00, the entire burial fund exclusion of $1500.00 is used, and no further exclusion is allowed.

FREE ALTCS Assessment

Take our FREE ALTCS Assessment to find out if you or a loved one is potentially eligible for ALTCS now!

Click Here

FREE IOT Need Assessment

Take our FREE IOT Need Assessment to find out if you or a loved one may need an Income-Only Trust now!

Click Here

Questions about ALTCS Financial Eligibility Requirements?

2 + 3 =