In most non-MAGI cases, it is best for the applicant/recipient group to treat the lump sum as a resource.
An applicant or recipient must report the receipt of a lump sum by the tenth day of the month after the individual receives it. For non-MAGI categories, if the lump sum makes the recipient ineligible for MA but the recipient spends the lump sum before the period allowed by the advance notice (PA/FS 162-A) sent by the CAO, the CAO will not stop benefits. If the applicant or recipient reports a lump sum by the tenth day of the month after the individual receives it, the CAO will not complete an overpayment referral.
Exception: Individuals who receive long-term care services in the community or in an institution must report receipt of a lump sum within ten calendar days.
When counting a lump sum as a resource, the CAO will follow these guidelines:
Confirm the date, amount, and source of the payment. If the lump sum is received by a legally responsible relative (LRR) living in the household, treat the payment as if the LRR were an applicant/recipient group member. (See Chapter 355, Deeming Income and Resources.)
Do not count a lump sum that is excluded as either income or a resource.
Add the lump sum payment to other resources available to the applicant/recipient group in the calendar month the lump sum is received.
If the applicant/recipient group's total resources are more than the resource limit, send an advance notice (PA/FS 162-A) letting them know that MA will be stopped.
NOTE: Explain on the notice that MA will not end if the applicant/recipient group verifies that resources have been reduced below the limit before the end of the advance notice period.
Continue MA if the individual shows proof that the amount of resources that was over the limit was spent before the end of the advance notice period.
NOTE: Complete an overpayment referral (OIG 189) only if the individual fails to report the lump sum by the tenth day of the month after the individual received it.
If any part of the lump sum is still left after the month it is received, continue to count the amount that is left as a resource.
If the CAO determines, at any point before they take action, that it would help the applicant/recipient group, they will count the lump sum as income in the month when it is received. After the first month, any amount of the lump sum that is left will be counted as a resource.
Example: On June 17, Mr. and Mrs. Williams apply for MA and are evaluated for NMP MA. Their net monthly income is $299. The income limit is $316. They have $300 in a checking account and have no other resources. The resource limit is $1000. On June 16, Mr. Williams receives a late paycheck from his previous employer for $636. The CAO counts the lump sum as a resource for June. Mr. and Mrs. Williams are eligible for NMP MA because their total resources ($936) are less than the limit.
NOTE: If the lump sum were treated as income, they would be ineligible.
Example: Ms. Clark receives TD for herself. On March 27, she reports that she received a lump sum payment of $3,000 from an inheritance on March 26. The resource limit is $2400. Because her resources are over the limit, the CAO sends a PA/FS 162-A for closure of MA. The advance notice expires on April 10. On April 9, Ms. Clark turns in receipts showing that she used the lump sum to buy home appliances. Her total resources, including what is still left from the lump sum, are now less than the limit. The CAO continues MNO for Ms. Clark because she reported the lump sum timely, there is no overpayment.
Updated February 13, 2025, Replacing May 3, 2024