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09/04/97 THERESA M. BREITKREUTZ v. DEPARTMENT

September 4, 1997

THERESA M. BREITKREUTZ, PETITIONER
v.
DEPARTMENT OF PUBLIC WELFARE, RESPONDENT



Appealed From No. 370080788-001. State Agency Department of Public Welfare.

Before: Honorable Dan Pellegrini, Judge, Honorable Bonnie Brigance Leadbetter, Judge, Honorable Silvestri Silvestri, Senior Judge. Opinion BY Judge Leadbetter.

The opinion of the court was delivered by: Leadbetter

OPINION BY JUDGE LEADBETTER

FILED: September 4, 1997

Theresa M. Breitkreutz (petitioner), on behalf of her deceased mother Mary Hayduchak, petitions for review of the November 20, 1996, final order of the Department of Public Welfare (DPW) upholding the denial of medical assistance/nursing home care benefits (MA). At issue is whether there is substantial evidence to support DPW's determination that Mrs. Hayduchak failed to rebut the presumption that the transfers of three (3) certificates of deposit (CDs) to her daughters for less than fair and adequate consideration were made for the prohibited purpose of qualifying for MA. We affirm.

On June 17, 1994, petitioner, acting as her mother's representative, applied for MA which the Lawrence County Assistance Office (CAO) denied. Petitioner appealed, and on January 24, 1995, a hearing was conducted at the Office of Hearings and Appeals (OHA) at which two (2) DPW representatives and petitioner testified.

In affirming CAO's determination, the hearing officer made the following relevant findings of fact. CAO determined that Mrs. Hayduchak was ineligible for MA after discovering that Mrs. Hayduchak had three (3) CDs, which she owned jointly with each of her three (3) daughters, totaling approximately $30,000.00. Prior to filing the application, all three daughters cashed their CDs, *fn1 and at about the same time, $4,000.00 was removed from a savings account which Mrs. Hayduchak held jointly with one of her daughters. Based upon the uncompensated value of these resources, CAO calculated that Mrs. Hayduchak would be ineligible for MA for 9.4 months. *fn2 As such, CAO rejected the application on September 13, 1994, explaining that it presumed that the transfers of the CDs were made to reduce Mrs. Hayduchak's assets in order to enable her to qualify for MA.

Mrs. Hayduchak was afforded an opportunity to rebut the presumption. However, upon reviewing her statement and a letter of rebuttal from her daughter, both indicating Mrs. Hayduchak's intention fifteen (15) years ago to give the CDs to her daughters, the Executive Director of CAO concluded that the rebuttal was unsuccessful and affirmed the denial of MA on September 23, 1994.

On February 29, 1996, the hearing officer upheld CAO's denial after determining, based on the evidence submitted, that petitioner failed to rebut the presumption that Mrs. Hayduchak transferred the CDs in order to gain eligibility for MA. *fn3 The Director of OHA affirmed the hearing officer's decision on February 29, 1996. On March 21, 1996, DPW granted petitioner's application for reconsideration and upheld OHA's order on November 20, 1996. *fn4 This appeal followed. *fn5

Petitioner first contends that DPW erred in determining that Mrs. Hayduchak was ineligible for MA based on the presumption that she gave money away in order to gain eligibility. Specifically, she asserts that her affidavit rebutted the hearing officer's presumption by clearly stating her mother's fifteen (15) year intention to grant complete ownership of the CDs to her daughters as unencumbered gifts. Petitioner further argues that DPW's Conclusion was in error because DPW did not present evidence to rebut petitioner's testimony.

Section 1404(a) of the Public Welfare Code (Code), Act of June 14, 1967, P.L. 31 as amended, 62 P.S. § 1404(a), provides that any medical assistance applicant who has transferred property within the two years immediately preceding the application, "must disclose the nature of the transfer and must demonstrate that it involves, a bona fide arm's length transaction resulting in compensation paid to the transferor in an amount equal to or greater than the fair market value of the property as determined by the department." 62 P.S. § 1404(a); See Williamson v. Department of Public Welfare, 166 Pa. Commw. 79, 646 A.2d 38, 39 (Pa. Commw. 1994); Groblewski v. Department of Public Welfare, 108 Pa. Commw. 102, 528 A.2d 1084, 1086 (Pa. Commw. 1987). *fn6

Further, 55 Pa. Code § 178.101 creates a rebuttable presumption that transfers for less than fair market value (FMV) within 30 months of filing an application are made for the purpose of qualifying for MA. The onus is on the applicant, and not DPW, to rebut this presumption. Williamson, 646 A.2d at 41; 55 Pa. Code § 178.102. Convincing rebuttal evidence includes: (1) the purpose of transferring the resource; (2) attempts to dispose of the resource at its fair market value (FMV); (3) reasons for accepting less than FMV for the resource; (4) applicant's means of, or plans for, self-support after the transfer; and (5) applicant's relationship to the person to whom the resource was transferred. 55 Pa. Code § 178.102(c). The presumption is rebutted only if the applicant proves that the transfer was solely for some purpose other than to qualify for MA. 55 Pa. Code § 178.102(d). Either the Executive Director of CAO or a delegate makes the determination of whether the presumption has been successfully rebutted. 55 Pa. Code § 178.102(e).

We conclude that substantial evidence exists to support the hearing officer's finding that the presumption was not successfully rebutted in this case.

First, it must be noted that although the CDs had been in joint names for a number of years, the relevant transfer is when they were cashed in, four days before the application for benefits. Section 6303(a) of the Probate, Estates and Fiduciaries Code, 20 Pa. C.S. ยงยง 6301-6306, establishes the presumption that during the lifetime of parties to a joint account, such an account belongs to the party or parties who contributed the funds. Here, the money used to establish the CDs came solely from Mrs. Hayduchak. (N.T. at 26-30.) Thus, the CDs must be deemed to have been owned solely ...


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