(b) The Department will find undue hardship and will permanently waive its claim with respect to the primary residence of a decedent if the person requesting the undue hardship waiver meets all of the following conditions:

1. (1) The person has continuously resided in the primary residence of the decedent for at least 2 years immediately preceding the decedent’s receipt of nursing facility services, or, for at least 2 years during the period of time which Medicaid-funded home and community based services were received.
2. (2) The person has no other alternative permanent residence.
3. (3) The person has provided care or support to the decedent for at least 2 years during the period of time that Medicaid-funded home and community based services were received by the decedent, or for at least 2 years prior to the decedent’s receipt of nursing home services during which time the decedent needed care or support to remain at home

(c) The Department will find undue hardship and will permanently waive its claim with respect to an income-producing asset if a spouse, child, parent, sibling or grandchild of the decedent meets both of the following:

1. (1) The asset is used to generate the primary source of income for the household.
2. (2) There would be a gross family income of less than 250% of the Federal poverty guideline without use of the asset.