When applying for Medicaid to help pay for nursing home care or home care services, one of the most misunderstood—and most critical—issues families face is the penalty for transfers made for less than fair market value. Many people discover too late that seemingly innocent financial decisions made years earlier—helping a child with a down payment, giving birthday gifts, paying a family member to provide care—can result in months of Medicaid ineligibility exactly when they need coverage most. This booklet explains: What constitutes a transfer for less than fair market value - How Pennsylvania calculates penalty periods - The critical $500 per month rule - Transfers that are exempt from penalties - How to rebut the presumption that a transfer was made to qualify for Medicaid - What documentation you need to protect yourself Important: This booklet explains the rules regarding transfers and penalties. It does NOT cover comprehensive Medicaid planning strategies. For information about protecting assets while qualifying for Medicaid, please ask about our Medicaid Application Approval Plan (MAAP) booklet and services.