Revision 24-4; Effective Dec. 1, 2024

Revision 11-3; Effective September 1, 2011

There is no resource test for the Medicaid Buy-In for Children (MBIC) program. However, the income from income-producing resources is considered. See N-4200, Income.

F-1210 Definition

Revision 09-4; Effective December 1, 2009

Resources are cash, other liquid assets, or any real or personal property or other nonliquid assets that a person, a person’s spouse or parent could convert to cash to be used for his or her support and maintenance. Support and maintenance assistance not counted as income is not considered a resource.

F-1220 Ownership and Accessibility

Revision 09-4; Effective December 1, 2009

A person’s resource is property that:

• is owned, solely or in part, by the person; and
• is accessible to the person.

If the person has the right, authority or power to liquidate the property or his share of it, the property is a resource.

Federal guidelines do not provide any leeway for hardship cases in determining the availability of resources. Unless a court has judged a person to be incompetent and a guardian or other agent is appointed to act for the person, the person has access to resources he owns.

Questions concerning ownership and accessibility may arise with respect to co-owned resources. In certain proceedings, such as divorce, the community property owned by the applicant/recipient and spouse may be divided by the court and ownership awarded to one or the other of the spouses. If the court documents indicate that there is division of marital property, only consider the property awarded to the applicant/recipient as owned and accessible to the applicant/recipient.

When dealing with legal documents, such as deeds, wills or trusts, always consult with the regional attorney to determine the type of asset and therefore the appropriate treatment. See F-1230, Guardians, Fiduciaries and Other Agents.

F-1221 Co-owned Resources

Revision 11-4; Effective December 1, 2011

Treatment of co-owned resources differs depending on the person’s marital status, living arrangement and program requested.

For a person who has an ineligible community spouse and that person is in an institutional setting when determining eligibility for the institutional setting program, do not use the following policy. Instead, use the policy in Chapter J, Spousal Impoverishment.

For determination of Medicare Savings Programs (MSP) eligibility on these spousal institutional setting cases, the following does apply.

For an individual who has a co-owned resource with a sibling, parent, etc., and lives in an institution, the following does apply.

Note: Institutional settings are any Medicaid-certified long-term care facility or any §1915(c) waiver program.

For a person in a noninstitutional setting, co-owned resources may also be counted in certain situations, as follows:

• If a person's co-owned resource is available to him without obtaining the consent of the co-owner, the full value of the resource is counted.
• If a co-owner's consent is required for the resource to be available to the person, and if that co-owner gives the consent, the full value of the available resource is counted.
  • If a co-owner refuses to consent, the resource is neither considered available nor counted.
  • If, however, the co-owner who refuses to consent is an ineligible spouse living with the person, the resource is considered available to the person and is counted against the resource limit.
• If a person has partial ownership in undivided real property, the value of his interest in the property is counted because each co-owner usually has the right to sell his share with or without the co-owner's consent.

Texas law prohibits the sale of the Texas community homestead property without the consent of both spouses. If an ineligible spouse is unwilling to dispose of Texas community homestead property and the person does not live with the ineligible spouse, the Texas community homestead property is not an available resource for the person.

References:

• See F-4000, Liquid and Nonliquid Resources, for treatment of liquid resources including treatment of joint bank accounts.
• See F-5000, Potential Resource Exclusions, for treatment of nonliquid resources.
• See F-4330, Business Property, for treatment of business property.

F-1221.1 Co-owned Resource Examples

Revision 09-4; Effective December 1, 2009

• Co-owned liquid resource
  
  A joint bank account that requires both owners' signatures to withdraw funds is an example of a co-owned resource requiring the consent of the other co-owner before it is available to the person. These accounts are usually established as "Jean Brown and Doris Brown."
• Co-owned undivided real property:
  
  An example of co-owned, undivided real property is land acquired by heirs to an estate.

If a person has a co-owned resource, determine the amount of interest owned, accessibility and the value of the person's interest in the co-owned resource.

Determine accessibility according to whether the co-owner's consent is required for the person to dispose of his interest.

Verify and document ownership and the value of the resource according to the verification and documentation requirements for the type of resource involved.

After contacting a knowledgeable source to determine the equity value of an interest in property, provide the following information:

• Location and a description of the property.
• Percentage of the person's ownership interest in the total resource.
• Amount and a description of any debts, liens (including federal tax liens) or taxes.
• Explanation of factors that may affect the value of an ownership interest, such as need to partition.

Verify and document accessibility from:

• ownership papers or other legal documents; or
• statement from the co-owner, if his/her consent is required, indicating if he/she is planning to make the resource available to the person.

F-1230 Guardians, Fiduciaries and Other Agents

Revision 09-4; Effective December 1, 2009

F-1231 Guardians and Other Agents

Revision 16-3; Effective September 1, 2016

Guardian of the estate. Under Sections 1151.101 and 1151.151, Texas Estates Code, it is the duty of the guardian of the estate to take care of and manage the estate as a prudent individual would manage the individual's own property. The guardian of the estate collects all debts, rentals or claims due to the ward, enforces all obligations in favor of the ward, and brings and defends suits by or against the ward. Only the guardian of the estate can deal with resources.

Guardian of the person. Under Section 1151.051, Texas Estates Code, the guardian of the person has the:

• right to have physical possession of the ward;
• right to establish the ward's legal domicile;
• duty of care, control and protection of the ward;
• duty to provide the ward with clothing, food, medical care and shelter; and
• power to consent to medical, psychiatric and surgical treatment other than the in-patient psychiatric commitment of the ward.

For HHSC purposes, the guardian of the person can sign documents, represent the individual at hearings and deal with small amounts of money. The guardian of the person is like any other responsible party in that the guardian of the person has the authority to protect the interests of the ward.

Under Section 1151.004, Texas Estates Code, a court may appoint the same individual to be both guardian of the estate and guardian of the person. If there are two guardians, one of the estate and one of the person, then the eligibility specialist must examine the court orders establishing the guardianships to decide which is the most appropriate to represent the individual with HHSC.

Note: When a guardianship exists, only that person can act on the individual's behalf to sign applications and review forms.

An individual's resources are available to the individual if they are being managed by a legal guardian, representative payee, power of attorney or fiduciary agent. If, however, a court denies a guardian or agent access to the resources, HHSC does not consider the resources available to the individual.

If individual's guardianship papers do not show that the legal guardian is prohibited access, and if a court has not subsequently ruled a prohibition, the resources are considered available. A guardian's routine need to petition the court for permission to dispose of individual's resources is not a prohibition. When the court rules on a petition to dispose of individual's resources, resources are considered available only to the extent to which the court has made them available for the individual's benefit.

If a legal guardian exists, obtain a copy of the guardianship or power of attorney document.

F-1231.1 Examples of Treatment of Resources

Revision 09-4; Effective December 1, 2009

Situation 1: Louis Bennett has resources valued at $1,300, which are being managed by his son. The son claims that as the power-of-attorney he is the only one who has access to the funds.

Treatment 1: Because a power-of-attorney is given voluntarily, and management of the resources is with the person's consent and for his benefit, Louis Bennett's resources are available to him.

Situation 2: John Morgan's parents used their own funds to purchase a certificate of deposit (CD) for John. The CD was issued as "John Morgan, by Paul and Jean Morgan, Joint Representative Payees."

Treatment 2: The CD is an available resource to John Morgan because the designation indicates that the parents are acting in a fiduciary capacity in controlling funds belonging to John, regardless of the fact that Mr. and Mrs. Morgan paid the purchase price.

Situation 3: Amy Wilson recently left the hospital and entered a long-term care facility. She is in a coma, and there are no known living relatives or friends. After Ms. Wilson had a stroke, her landlady looked through Ms. Wilson's papers and found a $600 term life insurance policy and a checkbook showing a balance of $3,840.65. The bank balance verified by bank statements.

Treatment 3: Although court action to appoint a guardian would be necessary to allow disposal of Ms. Wilson's excess funds, the resources are available to her. Until a court judges Ms. Wilson to be incompetent and unable to handle her affairs, the eligibility specialist cannot assume that the court will prohibit an appointed guardian from disposing of any of the funds in the checking account. Ms. Wilson is ineligible because of excess resources.

F-1232 Fiduciary Agent

Revision 09-4; Effective December 1, 2009

A fiduciary agent is a person or organization acting on behalf of and/or with the authorization of another person. The term applies to anyone who acts in a financial capacity, whether formal or informal, regardless of title, such as representative payee, guardian or conservator. In the case of a trustee, refer to the trust instrument.

An action by a fiduciary agent is the same as an action by the person for whom the fiduciary agent acts.

Assets held by a person in his/her capacity as fiduciary agent for someone else are not countable assets to the person. Assets held by a fiduciary agent for a person are considered as available to the person, unless otherwise excludable.

Identify a fiduciary relationship by the way in which a resource is styled. A bank account established in two names connected by "for" or "by" indicates a fiduciary relationship. Another indication is an account established in two names with the designation of "representative payee" next to one of the names, or an account with the designation "special."

A Medicaid recipient may receive a lump sum payment as the payee for an individual who is not a Medicaid recipient. Consider the Medicaid recipient a fiduciary agent for the individual. Do not consider the individual’s lump sum funds as an available countable asset to the Medicaid recipient when all of the following conditions are met:

• The individual has no bank account.
• The Medicaid recipient is acting as the fiduciary agent.
• Deposits of the lump sum funds are made into the Medicaid recipient’s bank account.

F-1232.1 Medicaid Recipient Responsibilities as Fiduciary Agent

Revision 09-4; Effective December 1, 2009

If the individual’s lump sum funds held in the Medicaid recipient’s bank account are not considered as an available asset to the Medicaid recipient, the Medicaid recipient, as fiduciary agent for the individual, must:

• indicate the current needs of the individual such as food, clothing, housing, medical care and other personal comfort items;
• indicate reasonably foreseeable needs of the individual;
• keep accounting records of how lump sum funds are spent for the individual; and
• establish a separate fiduciary account with the remaining lump sum funds for the individual allowing the person until the next annual redetermination.

Do not use Form H1299, Request for Joint Bank Account Information, when the individual's lump sum funds have been deposited into the Medicaid recipient's account and the Medicaid recipient is allowed time to separate the individual’s funds and deposit them into a separate fiduciary account.

F-1240 Ownership of Unknown Assets

Revision 09-4; Effective December 1, 2009

If a person is unaware that he/she owns an asset, the asset is not counted as a resource for the period during which he/she is unaware of his ownership. For example, he/she may inherit property and not know about the inheritance for some time.

The asset is counted as income in the month that the person discovers his/her ownership.

Begin counting the asset as a resource effective the first of the month after the month of discovery.

F-1250 Patrimonial Assets

Revision 09-4; Effective December 1, 2009

Patrimonial assets are assets irrevocably turned over to a religious order following a vow of poverty. The assets are not countable resources and the transfer of assets penalty does not apply.

F-1260 Conversion of Resources

Revision 09-4; Effective December 1, 2009

If a person converts one type of resource to another, HHSC considers the new resource according to the policy governing that type of resource.

Any cash received from the sale of a resource is considered a resource, not income. This includes proceeds from the sale of a natural resource, such as cutting timber from the person's home property and selling it as firewood. There are two exceptions:

• The owner leases the land or resource rights. The income received from the lease is unearned income.
• The sale of the natural resource is part of the person's trade or business. The income received is self-employment income.

See E-3333, Mineral and Timber Rights.

See F-4000, Liquid and Nonliquid Resources, for nonliquid resources converted to cash.

F-1270 Replacement Value of Excluded Resources

Revision 09-4; Effective December 1, 2009

If an excluded resource is lost, damaged or stolen, the cash, including interest earned on the cash, or the in-kind replacement that the person receives from any source to repair or replace the resource, is excluded. This exclusion applies if the cash and the interest are used to repair or replace the excluded resource within nine months of the date the person received the cash.

Any of the cash or interest that is not used to repair or replace the excluded resource is counted as a resource beginning with the month after the nine-month period expires.

The initial nine-month time period can be extended for a reasonable period up to an additional nine months when the person has good cause for not replacing or repairing the resource. Good cause exists when circumstances beyond the person's control prevent the repair or replacement or the contracting for the repair or replacement of the resource. The nine-month extension can only be granted if the person intends to use the cash or in-kind replacement items to repair or replace the lost, stolen or damaged excluded resource and has good cause for not having done so. If good cause is found, any unused cash and interest are counted as a resource beginning with the month after the good cause extension period expires.

When the president of the United States declares a catastrophe to be a major disaster, the extension period described above can be extended for a reasonable period up to an additional 12 months if:

• the excluded resource is geographically located within the disaster area as defined by the presidential order;
• the person intends to repair or replace the excluded resource; and
• the person demonstrates good cause when he has not been able to repair or replace the excluded resource within the 18-month period.

If an extension of the time period is made for good cause and the person changes his/her intent to repair or replace the excluded resources, funds previously held for replacement or repair are counted as a resource effective with the month that the person reports this change of intent.

Determine the amount of the payment and the date of receipt. Schedule a special review to monitor for replacement or repair within the period allowed.

Sources for verifying the amount of money received are:

• statement from the payment source;
• copy of the person's check; and
• bank deposit slip.

Sources for verifying replacement or repair of the excluded resources are:

• receipt; or
• repair bill.

Revision 11-4; Effective December 1, 2011

A person or a couple meet resources criteria if the value of all countable resources does not exceed the appropriate established limit.

Individual limit. This limit applies to adults who are single, even if the person lives with relatives. The individual limit also applies to children and to adults whose spouses live in different households. The individual limit also applies to the institutional spouse in spousal impoverishment policy. Use the individual limit for the following:

• An adult person who is not married, even if the person lives with relatives. Consider only the person's own resources.
• A person with a spouse not living in the same household. If the spouse is eligible, consider the person's own resources, plus half the resources owned jointly by the person and spouse. If the spouse is not eligible, consider the person's own resources, plus any jointly owned resources available to the person.
• A child. Consider the child's own resources, plus certain deemed resources of the parents with whom the child lives.
• An institutional spouse using policy in Chapter J, Spousal Impoverishment.

Couple limit. This limit applies to married adults who live in the same household with their spouses, even if the spouses are ineligible. Consider the combined resources of the person and spouse. Use the couple limit for the following:

• A married person living in the same household with his spouse, when both spouses are eligible.
• A married person living in the same household with his spouse, when the spouse is ineligible.

The value of all countable resources must not exceed the following limits:

See Section Q-2000, Qualified Medicare Beneficiaries (QMB) – MC-QMB, Medicare Savings Programs (MSP), where the resource limit is higher for certain MSP programs.

If the countable resources are within $100 of the resource limit, set a special review to monitor eligibility. See Section B-8430, Special Reviews.

F-1310 Points in Time for Establishing Resource Values

Revision 25-3; Effective Sept. 1, 2025

Calculate the value of an applicant or recipient’s resources as of 12:01 a.m. on the first day of a calendar month. Changes in the value of a resource are considered in the resource determination for the month after the change.

If countable resources exceed the resource limit as of 12:01 a.m. on the first day of the month, a person or couple is not eligible for Medicaid for the entire month. Eligibility may be reestablished no sooner than the first day of the next month.

Income received in the current month is considered income for that month only. If the income is held by the person until the following month, it will be subject to resource counting rules.

For programs that require full verification, verify resources as of 12:01 a.m. on the first day of the month:

• of application, for ongoing eligibility; and
• for each of the three preceding months, for prior coverage.

For programs that allow client statement as an acceptable verification source, verify resources as of 12:01 a.m. on the first day of the month of application or any month through the month of certification. Verification of resources is not required for all months between the month of application and certification unless the applicant reports a change in the total resources.

For redeterminations, verify resources as of 12:01 a.m. on the first day of:

• the month the redetermination form was received;
• either of the two months before the redetermination form was received; or
• any month between the month the redetermination was received and the month the redetermination is completed.

Verify all resources as of 12:01 a.m. on the first day of the same month.

F-1311 Encumbered Funds

Revision 19-1; Effective March 1, 2019

When determining countable resources, a bank account balance may be reduced by the amount of funds encumbered (legally obligated) before 12:01 a.m. on the first day of the month.

Encumbered funds should be explored if the case is going to be denied due to excess resources. The account balance as of 12:01 a.m. on the first day of the month should be reduced by the amount of any outstanding checks that have not been processed by the financial institution.

Eligibility staff must:

• not deny the case before determining if excess resources can be reduced;
• pend using Form H1020, Request for Information or Action, to request verification of any encumbered funds that may reduce the account balance; and
• determine the purpose of the payments for which the checks were written in advance and explore the potential for a transfer of assets.

Payments for legally owed debts, such as health care expenses, or credit card charges and recurring monthly expenses consistent with routine banking activity are not a transfer of resources.

Payments made to reduce the 12:01 a.m. balance for items or services for which a person may not receive compensation, may be a transfer of assets. For example, an institution makes advance payments for future housing expenses made by a person in a nursing facility who is unlikely to return home during that time.  

Related Policy

Missing Information Due Dates, B-6420
Failure to Furnish Missing Information, B-6510
Refunds for Payments Before Medicaid Eligibility Approval, F-1312.2
Compensation, I-4100

F-1312 Nursing Facility Payments and Refunds

Revision 16-4; Effective December 1, 2016

Following an individual's approval for Medicaid, a Medicaid-contracted, long-term services and supports facility, such as a nursing facility, must refund any advance payments that exceed an individual's co-payment amount for periods covered by Medicaid. This refund policy also applies to advance payments made to home health agencies for Community Attendant Services recipients.

A Medicaid-contracted, long-term services and supports provider may charge a private pay rate that is different from the Medicaid rate, when Medicaid is not the payer of the bill. This private arrangement may occur:

• during a transfer of assets penalty;
• during a substantial home equity penalty; or
• before Medicaid eligibility is approved.

A Medicaid-contracted, long-term services and supports facility may allow a resident's family or friends to use personal funds to pay an agreed-upon amount, in addition to the Medicaid rate, in order to have a private room. These payments in excess of an individual's co-payment do not need to be refunded. However, for Medicaid eligibility purposes, if the family or friends pay the difference, consider how it is being paid:

• If the money is given directly to the individual to pay the difference between the Medicaid rate and a private room rate, that amount is considered income to the individual.
• If the family or friends pay the facility directly, do not consider the amount paid as income to the individual.

F-1312.1 Payment During a Penalty

Revision 16-4; Effective December 1, 2016

During a transfer of assets or substantial home equity penalty, Medicaid does not pay the long-term services and supports provider. Payments for long-term services and supports are a private arrangement between the recipient and the provider. Private pay rates may be collected during a penalty. In these situations, the individual is not owed a refund when the transfer of assets penalty period ends or there is no longer a substantial home equity penalty.

F-1312.2 Refunds for Payments Before Medicaid Eligibility Approval

Revision 19-1; Effective March 1, 2019

If a person paid a provider private pay rates or a deposit that exceeded the person's co-payment amount, once Medicaid eligibility is approved, and there is no penalty from a transfer of assets or substantial home equity, the excess amount must be refunded for those months Medicaid eligibility is established.

Consider the advance payment as encumbered funds in the resource test for the initial eligibility determination.

Do not consider the refund as income in the month of receipt.

Consider the refund or any remaining part of the refund as a resource as of 12:01 a.m. on the first day of the month after the month of receipt of the refund.

Related Policy

Encumbered Funds, F-1311
Special Reviews, B-8430

Revision 09-4; Effective December 1, 2009

The word "deeming," as used in this handbook, means counting all or part of the income or resources of another person (parent or spouse) as income or resources available to the person.

HHSC does not deem income or resources from an alien's sponsor.

F-1410 Deeming for Spouses

Revision 11-4; Effective December 1, 2011

HHSC deems spouse's resources as follows:

• If a married person lives in the same household with an ineligible spouse, HHSC counts both the ineligible spouse's and the person's resources and applies the couple resource limit to the combined countable resources. The spouse's resources are counted even if they are not available to the person. 
  
  Note: Pension funds owned by an ineligible spouse or parent are excluded from resources for deeming purposes. If the ineligible spouse is a TANF caretaker, his resources are not counted. Pension funds are monies held in a retirement fund under a plan administrated by an employer or union, or an individual retirement account (IRA) or Keogh account as described in the Internal Revenue Code.
• An ineligible spouse or parent who is absent from a deeming household solely because of an active duty military assignment continues to be considered a member of the household for resources deeming purposes. If the absent service member's intent to continue living in the household changes, deeming stops beginning with the month following the month in which the intent changed.

If the person does not live in the same household as his ineligible spouse, HHSC does not apply deeming policies. In situations where an institutionalized person has an ineligible spouse also living in a facility, only the person's resources are counted against the individual resource limit. HHSC includes in the person's resources the total amount of checking and savings accounts to which he has access.

Note: Follow joint bank account policy and exclude any separate resources of the ineligible spouse.

Example: Wayne and Ethel Thomas live together in their own home. Wayne was receiving SSI and RSDI as a disabled person. His most recent cost-of-living increase in RSDI benefits made him ineligible for SSI.

The eligibility specialist received Mr. Thomas' application for ME-Pickle. The reported and verified resources were:

F-1420 Deeming for Children

Revision 11-3; Effective September 1, 2011

Note: Deeming from parents does not apply in certain §1915(c) waiver programs.

Deeming of resources does not apply to Medicaid Buy-In for Children (MBIC). There is no resource test for MBIC.

Regarding deeming for children, HHSC requirements are as follows:

If a disabled child under 18 lives with his parents in the same household, HHSC must deem to the child certain resources of the parents. If a parent is a TANF caretaker or a recipient, his resources are not counted.

An ineligible spouse or parent who is absent from a deeming household solely because of an active duty military assignment continues to be considered a member of the household for resources deeming purposes. If the absent service member's intent to continue living in the household changes, deeming stops beginning with the month following the month in which the intent changed.

To determine the amount of resources deemed to an eligible child, HHSC:

• applies any appropriate resource exclusions to the resources of the parents to determine countable resources. Pension funds owned by a parent are excluded from resources for deeming purposes. See note in F-1410, Deeming for Spouses;
• deems to the child any resources in excess of the individual resource limit for one parent or the couple resource limit for two parents. If more than one child is potentially eligible for an SSI-related Medicaid program, the amount to be deemed is equally divided among the otherwise eligible children. None of the parents' resources are deemed to ineligible children; and
• excludes from deeming gifts from tax-exempt organizations to a parent for the benefit of a child with a life-threatening condition, per Public Law 105-306.

A parent is defined as a child's natural or adoptive parent or the spouse of the natural or adoptive parent.