If a state Medicaid program files a claim against a parent's estate, heirs can ask for an undue hardship waiver. Medicaid.gov says every state must have procedures to waive estate recovery when it would cause undue hardship, but each state decides what counts and how to apply. Read the state's notice right away, because some states set short deadlines to apply.
How is a hardship waiver different from other protections?
Some estates are protected automatically. Medicaid.gov says states may not recover from the estate of someone survived by a spouse, a child under 21, or a blind or disabled child of any age. That isn't something you apply for. For the basics of estate recovery and these protections, see Medicaid estate recovery basics.
A hardship waiver is different. It's a request you make when recovery would cause serious harm to heirs, even though none of those automatic protections apply. This page focuses on how to ask for one.
What do states count as undue hardship?
Federal law requires states to have a waiver process but lets them define hardship. State examples show common themes.
Michigan's Medicaid agency says a hardship may exist when the estate is the survivors' main income-producing asset, like a family farm or business, or when it's a home of modest value. Michigan also uses a means test. The applicant's household income must be under 200% of the poverty level, and household savings and other resources under $10,000.
Indiana's estate recovery page says the state won't seek recovery if it would cause a "substantial and undue hardship" for the surviving heirs. Ask Indiana's estate recovery unit for its written criteria.
Other things some states consider:
- A family member who lived in the home and cared for the parent, which delayed nursing home care.
- An heir with a disability or very low income who lives in the home.
Michigan, for example, says the law presumes there's no hardship if the hardship came from moving assets to avoid estate recovery.
Your state's rules are what count. Ask the estate recovery unit for its written hardship criteria.
Who can apply?
Usually an heir or someone who would inherit, like a child or sibling. Indiana, for example, considers applications from immediate family members, and in exceptional cases from others. Check your state's rules.
What's the deadline?
It varies. Indiana says hardship applications must be submitted within 90 days of the date of the claim. Other states use different timeframes.
The notice of claim from the state should explain the deadline and how to apply. If it doesn't, call the number on the notice and ask.
What to say to the estate recovery unit:
"I received a notice of an estate recovery claim for [parent's name], who died on [date]. I'd like to apply for an undue hardship waiver. Can you send me the application, your written hardship criteria, and the deadline?"
What should I gather?
States usually want proof. Depending on the reason, that might include:
- Proof of your relationship to the person who died.
- Your household income and savings, such as tax returns, Social Security letters, and bank statements.
- Proof you live in the home, like a driver's license, utility bills, or mail with the address.
- The home's value, like a property tax assessment.
- Proof of caregiving, such as doctors' notes or letters saying you provided care that delayed nursing home placement.
- Proof of a family business or farm and the income it provides.
- Medical or disability records, if your health is part of the hardship.
Make copies of everything before you send it.