New York Medicaid Look-Back Period (2025): The 5-Year Rule, Penalty Calculation and Exempt Transfers

By Albert Goodwin, Esq., New York estate and elder law attorney. Last reviewed for 2025 figures. New York updates its Medicaid income limits, resource limits and regional nursing home rates every January, and we revise this page when the NYS Department of Health publishes the new numbers.

This page covers the Medicaid look-back period as it is applied in New York State, including New York City. It is written for people who are applying, or expect to apply, for nursing home Medicaid in New York, and for their children and spouses who are trying to work out what a past gift will cost. If you want the general national explanation, Medicaid.gov has one. This page is about how the rule works at a New York local Department of Social Services (DSS) or the NYC Human Resources Administration (HRA), what the New York numbers are, and what New York law exempts.

The short version for New York

• Look-back for nursing home (institutional) Medicaid: 60 months before the date you are in a facility and have applied. Social Services Law § 366(5)(e); 18 NYCRR 360-4.4; 42 U.S.C. § 1396p(c).
• Look-back for community Medicaid (home care, assisted living program, MLTC): none is currently enforced. A 30-month look-back was enacted in 2020 but has never been implemented (details below).
• 2025 income limit: $1,800 per month for a single applicant, $2,433 for a couple who are both applying.
• 2025 resource (asset) limit: $32,396 for a single applicant, $43,781 for a couple.
• 2025 community spouse resource allowance (CSRA): the community spouse may keep the greater of $74,820 or one-half of the couple's combined countable resources, up to $157,920.
• 2025 minimum monthly maintenance needs allowance (MMMNA): $3,948 per month for the community spouse.
• 2025 home equity limit: $1,097,000.
• Personal needs allowance in a nursing home: $50 per month.
• Penalty formula: uncompensated transfers in the look-back, divided by the DOH regional nursing home rate for your region, equals the number of months (and days) of ineligibility for nursing home coverage.

What the look-back period is, and where the New York rule comes from

Medicaid pays for long-term care only after you have used your own resources. To stop people from giving everything away the month before they apply, federal law requires each state to review transfers made during a period before the application. That review window is the look-back period. Any transfer for less than fair market value found inside the window is treated as a gift and produces a period of ineligibility, called a penalty period.

The federal rule is 42 U.S.C. § 1396p(c), as amended by the Deficit Reduction Act of 2005. New York adopted it in Social Services Law § 366(5)(e) and in 18 NYCRR 360-4.4. The Department of Health's implementing directive is 06 OMM/ADM-5, which is still the document caseworkers rely on for penalty start dates, partial-month penalties and the treatment of returned gifts. If a caseworker's determination cites a rule you cannot find, it is usually in that ADM.

Two points of vocabulary matter in New York. First, the look-back period is the window the agency examines. The penalty period is the separate stretch of ineligibility that results. They are not the same length. A large gift can produce a penalty longer than five years. Second, the look-back applies to transfers by the applicant and by the applicant's spouse, so a gift from the community spouse's own account is reviewed too.

Which New York Medicaid programs have a look-back

Nursing home Medicaid: 60 months

For institutional Medicaid, the agency looks back 60 months from the baseline date, which is the first date on which you are both residing in a nursing facility and have an application on file. Every state except California now uses 60 months. California phased out its asset test and transfer penalty in 2024, so the older statement that forty-nine states have a five-year rule and California has thirty months is no longer accurate.

Community Medicaid: the 30-month look-back that has not started

New York has never applied a look-back to community-based long-term care, which includes personal care, the Consumer Directed Personal Assistance Program, Managed Long Term Care plans and the Assisted Living Program. In the April 2020 state budget, the Legislature amended Social Services Law § 366(5)(e) to add a 30-month look-back for those services, originally to begin October 1, 2020. Implementation was blocked by the federal maintenance-of-effort conditions tied to pandemic Medicaid funding, and the Department of Health has postponed it several times since. As of this review it has not been implemented, no start date has been announced, and DOH has said it will give advance notice before it starts.

What this means in practice: a person who needs home care in New York today can transfer assets and apply the following month without a transfer penalty. We still advise caution for two reasons. The statute as written reaches transfers made on or after October 1, 2020, so a future start date could pull older gifts into review. More importantly, a person receiving home care who later enters a nursing home is subject to the full 60-month institutional look-back, and the gifts made to qualify for home care will be counted at that point.

How DSS and HRA actually review transfers

The look-back is enforced through the application itself. For a nursing home application, the agency asks for 60 months of statements for every bank, brokerage and retirement account held by the applicant and the spouse, plus deeds, closing statements, life insurance values, annuity contracts and trust instruments. In New York City, HRA processes most nursing home applications through its Nursing Home Eligibility Division; outside the city the county DSS handles them.

The caseworker goes through the statements line by line and flags withdrawals and transfers above a dollar threshold the agency sets, commonly in the low thousands. For each flagged item you will receive a request for documentation. Items that cannot be explained are presumed to be gifts. Common sources of trouble in New York files include:

• Cash withdrawals with no receipts, especially regular ATM withdrawals that add up over five years.
• Checks to children or grandchildren labeled as birthday or holiday gifts. New York has no small-gift exception; a $500 gift is a $500 transfer.
• Adding a child's name to a deed or a bank account. Adding a name to a deed is a transfer of a share of the property. Adding a name to a joint bank account is not a transfer until the child withdraws funds.
• Paying a grandchild's tuition, or paying off a child's debt.
• Transfers to an irrevocable trust made within the window, including a Medicaid asset protection trust funded less than five years before the application.
• Selling a house to a relative below market value, or selling a car to a relative for a nominal sum.

If the agency finds uncompensated transfers, it issues a notice of decision stating the total transferred, the regional rate used, and the penalty period. You have 60 days to request a fair hearing under 18 NYCRR Part 358.

How the penalty is calculated in New York

The regional rates

New York divides the total uncompensated transfers by a regional rate that DOH publishes each year in a GIS message. The rate is meant to approximate the average monthly private-pay cost of a nursing home in that region. For 2024, DOH set the rates as follows:

• New York City: $14,273
• Long Island (Nassau, Suffolk): $14,136
• Northern Metropolitan (Westchester, Rockland, Putnam, Dutchess, Orange, Ulster, Sullivan): $13,906
• Northeastern: $13,065
• Rochester: $14,432
• Central: $12,009
• Western: $12,383

DOH revises these figures each January. Before you rely on a calculation, confirm the rate in the current year's GIS message or ask us for the figure in effect on your baseline date. The rate that applies is the one for the region where the nursing home is located, not where the applicant used to live.

Partial months

New York does not round. Under 06 OMM/ADM-5 the penalty is expressed in months and days. A quotient of 4.69 is a penalty of four months plus roughly 21 days. Small gifts therefore produce short penalties rather than being ignored.

When the penalty starts

This is the point most often misunderstood. Since 2006 the penalty does not run from the date of the gift. It begins on the later of the first day of the month in which the transfer was made or the date on which the applicant is otherwise eligible for nursing home Medicaid and is receiving an institutional level of care. "Otherwise eligible" means you are in the facility, have applied, and have resources at or below $32,396 and income accounted for. Until you have spent down to the limit, the clock does not start.

The consequence is that a gift made in 2021 does not quietly expire before a 2025 application. If the gift is inside the 60-month window, the penalty begins when you are in the nursing home and otherwise eligible, and during the penalty period someone has to pay the facility privately.

A worked New York City illustration

Take a widow with $100,000 in savings and a pension of $2,200 per month who enters a Brooklyn nursing home in 2025. Two years earlier she gave $60,000 to her son. She spends her remaining $40,000 on the facility until she has $32,396 and applies. HRA reviews her statements, identifies the $60,000, and divides it by the New York City rate. At the 2024 rate of $14,273 the result is 4.20, so the penalty is four months and about six days, starting the month she became otherwise eligible. Her pension is applied toward the bill during that time, and the balance of each month's charge must be paid from the son's funds, a return of part of the gift, or another source. Had she instead paid the $60,000 to the nursing home or to home care aides, there would have been no penalty at all. This is an illustration, not a client result.

Transfers New York exempts from the penalty

Social Services Law § 366(5)(e)(4) and 18 NYCRR 360-4.4(c) carry over the federal exemptions in 42 U.S.C. § 1396p(c)(2). A transfer that fits one of these categories can be made during the look-back without a penalty. Each one is fact-specific and the agency will ask for proof.

• Transfers to a spouse: any asset, in any amount, may be transferred to the applicant's spouse or to a third party for the sole benefit of the spouse. The spouse's resources are then measured against the CSRA, and in New York the spouse may also sign a spousal refusal (see below).
• Transfers to a blind or disabled child: any asset may be transferred to a child of any age who is blind or disabled under Social Security standards, or to a trust established solely for that child's benefit. The age-21 limit that appears on some websites applies only to the home, which may also be transferred to a child under 21 who is not disabled.
• Transfers to a trust for a disabled person under 65: assets may be placed in a trust for the sole benefit of a disabled individual under 65, including a first-party supplemental needs trust under EPTL 7-1.12. See our page on the benefits of a special needs trust.
• The home to a caregiver child: the residence may be transferred to a son or daughter who lived in the home for at least two years immediately before the parent entered the nursing home and who provided care that allowed the parent to stay at home rather than enter a facility. The agency will want a physician's statement about the level of care needed and evidence that the child lived there, such as a driver's license, tax returns and mail. A written care agreement helps but is not what creates the exemption; the residence and the care are.
• The home to a sibling with an equity interest: the residence may be transferred to a brother or sister who already holds an ownership interest in it and who lived there for at least one year immediately before the applicant entered the facility.
• Transfers for fair market value: a sale at market price, with a deed, contract and closing statement, is not a transfer for less than value. A sale to a relative at a discount is a gift of the difference.
• Transfers made exclusively for a purpose other than qualifying for Medicaid: the applicant may rebut the presumption by showing the gift had nothing to do with Medicaid, for example a pattern of identical annual gifts begun years earlier while the applicant was healthy. New York agencies apply this narrowly and the burden is on the applicant.

Paying a family member for care under a written caregiver agreement at a reasonable hourly rate, with time records, is compensation for services and not a gift. Paying a relative a lump sum for past, undocumented care is treated as a transfer.

Curing a penalty by returning the gift

New York allows a gift to be returned to the applicant, in full or in part, to reduce or eliminate the penalty. A full return erases the transfer; the money is then a countable resource of the applicant and must be spent down or planned for. A partial return reduces the penalty proportionately, so returning half of a $60,000 gift cuts the penalty roughly in half. The return must go back to the applicant (or to the applicant's spouse), not to a third party, and the agency will want to see the deposit. If the recipient has already spent the money, the cure is unavailable and the family is left with the hardship waiver or private payment.

The undue hardship waiver

18 NYCRR 360-4.4 and 06 OMM/ADM-5 allow the agency to waive a transfer penalty when enforcing it would deprive the applicant of medical care to the point of endangering health or life, or deprive the applicant of food, clothing, shelter or other necessities. The applicant must show that the transferred assets cannot be recovered and that reasonable steps were taken to recover them, which can include a demand on the recipient and, in some cases, litigation. The nursing home may file the hardship request on the resident's behalf. Waivers are granted sparingly. They are most often seen where an elderly person was financially exploited by the recipient of the "gift" and the money is gone.

Planning options inside the five-year window

If a nursing home admission is imminent and the assets are still in the applicant's name, the goal is to convert countable assets into exempt assets or into a penalty that can be paid through. These are the techniques used in New York practice.

Spend-down on exempt purchases and debts

Paying off a mortgage, credit cards or a car loan, prepaying an irrevocable funeral trust, repairing the home, buying a replacement vehicle, and prepaying the nursing home itself are all spending for value. None creates a transfer penalty.

Transfers to the community spouse and spousal refusal

Assets above the CSRA can be moved to the community spouse without penalty. New York then permits the community spouse to sign a spousal refusal under Social Services Law § 366(3)(a), declining to make his or her resources available. The applicant is then evaluated on his or her own resources. The agency retains the right to seek contribution from the refusing spouse under the implied-contract theory, and in New York City HRA does pursue these claims in some cases, so this is a decision to make with counsel.

Gift and promissory note ("half a loaf")

Where a single applicant has assets well above the limit and no time left, a common New York approach is to gift part of the excess and lend the rest to a family member under a promissory note. The gift creates a penalty. The note, if it complies with 42 U.S.C. § 1396p(c)(1)(I), is not a transfer: it must have a repayment term that is actuarially sound based on the applicant's life expectancy, require equal payments with no deferral and no balloon, and prohibit cancellation on the lender's death. The monthly note payments, together with the applicant's income, pay the facility during the penalty period. The amounts are calculated so that the note runs out as the penalty ends. Because the applicant becomes otherwise eligible immediately after the gift and loan, the penalty starts right away rather than waiting. Done correctly this preserves a portion of the estate; done without the correct note terms, the loan is treated as a second gift.

Medicaid-compliant annuities

A single-premium immediate annuity that is irrevocable, non-assignable, actuarially sound, pays in equal installments and names the State of New York as remainder beneficiary converts a countable asset into an income stream. It is used mainly for the community spouse, whose income is not counted against the applicant.

Irrevocable Medicaid asset protection trust

Transferring assets to an irrevocable trust is a gift and starts the five-year clock. It is the main tool for people planning ahead, not for someone being admitted next month. The trust must deny the grantor access to principal; the grantor may keep the income and the right to live in the home. We discuss these trusts and related techniques in our page on advanced New York estate planning techniques, and on which assets can and cannot go into a revocable trust, since a revocable trust offers no Medicaid protection at all.

Excess income: nursing home versus community Medicaid

The look-back is about assets. Income is handled differently depending on the program, and the two are often confused.

In a nursing home, there is no income spend-down in the ordinary sense. The resident keeps the $50 personal needs allowance, may pay health insurance premiums, and may allocate income to the community spouse up to the MMMNA of $3,948. Everything else, called the net available monthly income or NAMI, goes to the facility, and Medicaid pays the balance.

For community Medicaid, a person with income above $1,800 can either pay the excess to the agency each month as a spend-down or deposit the excess into a pooled supplemental needs trust under Social Services Law § 366(2)(b)(2)(iii) and EPTL 7-1.12. The trust pays the person's living expenses from the deposits. New York allows this at any age, which is unusual and is the main reason home care Medicaid is workable for middle-income New Yorkers. Deposits into a pooled trust are not transfers for look-back purposes.

Mistakes we see in New York applications

• Assuming the federal gift-tax annual exclusion ($19,000 in 2025) is a Medicaid exemption. It is not. Medicaid counts every dollar.
• Transferring the house to the children outright, which starts a penalty, loses the step-up in basis, and exposes the house to the children's creditors and divorces. A trust or a life estate deed is usually better.
• Waiting for the 30-month community look-back to "start" before planning for home care, instead of acting while there is no look-back.
• Gifting to qualify for home care without considering the 60-month nursing home rule that still applies if the person later needs a facility.
• Letting a family member pay bills from the parent's account without records, so that five years of ordinary spending looks like transfers.
• Signing a nursing home admission agreement as "responsible party" and personally guaranteeing payment during a penalty period.

Frequently asked questions

Does New York look back five years for home care?

No. As of this review there is no look-back for community Medicaid in New York. The 30-month rule was enacted in 2020 and remains unimplemented.

Is the look-back period in New York City different from the rest of the state?

The look-back is 60 months statewide. What differs is the regional rate used to compute the penalty, and the practice of the agency processing the file.

Can I give away $19,000 a year without a penalty?

Not for Medicaid. The annual exclusion is a federal gift-tax rule. Each gift inside the look-back is a transfer unless it fits a statutory exemption.

What if the gift was made more than five years ago?

It is outside the look-back and the agency does not ask about it. The agency may still ask for proof of the date of the transfer.

Does the penalty period count against the five years?

No. The look-back is a review window measured backward from the application. The penalty period runs forward from the date you are otherwise eligible, and it can exceed five years for a very large gift.

What happens if I lie about a transfer on the application?

Misstatements on a Medicaid application can lead to denial, recovery of benefits paid, and prosecution. See our page on misrepresentation on Medicaid and food stamp applications.

Talk to a New York Medicaid planning attorney

The look-back rule punishes guesswork. Before a nursing home application in New York, every withdrawal and transfer from the past five years should be reviewed, the exemptions considered, and any penalty calculated at the current regional rate with a plan for who pays during the penalty. The Law Offices of Albert Goodwin handles Medicaid eligibility, transfer penalty disputes and fair hearings for clients in New York City, Brooklyn, Queens and Long Island. You can read about Albert Goodwin, call 212-233-1233, or email email@nyestateslawyer.com to discuss your situation.

Sources: Social Services Law §§ 366(2)(b), 366(3)(a), 366(5)(e); 18 NYCRR 360-4.4 and Part 358; 42 U.S.C. § 1396p(c); NYS DOH 06 OMM/ADM-5; the annual NYS DOH GIS messages setting Medicaid income and resource levels, spousal allowances and regional nursing home rates. Figures on this page are for 2025 except where a different year is stated. Verify current figures before relying on any calculation; this page is general information and not legal advice for your situation.