Child Caregiver Exception Permitted for Transfer of House of Medicaid Applicant to Son

The transfer of a house owned by a Medicaid applicant to her caregiver son immediately preceding her application for benefits is not considered an uncompensated transfer subject to a Medicaid penalty period because it falls within the child caregiver exception.

V.P. v. Dept. of Human Services (N.J. Sup. Ct., App. Div., No. A-2362-09T1, Sept. 2, 2011).

Facts.  Mother lived with her Son in Mother’s residence until she suffered a stroke and required the full-time care of a nursing home.  Prior to applying for Medicaid benefits, Mother transferred her residence to her Son and then applied to the state.  The state of New Jersey found that Mother impermissibly transferred her home and was, therefore, subject to a penalty period (based on the value of the transfer) before she would be allowed to receive Medicaid benefits.

Mother appealed the state’s decision, arguing that her house should not be considered a countable asset because the transfer fell within the child caregiver exception to the uncompensated transfer rule.  At the appeal hearing, several family members and Mother’s doctor testified that Son regularly assisted Mother when she needed to walk, bathe, and cook, among other necessary activities.

Reversal of Administrative Law Judge’s (ALJ) Decision. The ALJ determined that the witnesses were credible and held that the child caregiver exception applied to Mother’s case. However, the state’s Medicaid director rejected the decision of the ALJ and determined that Mother only required normal support services, resulting in the transfer not being eligible for the child caregiver exception. Mother appealed.

Ruling of the New Jersey Superior Court.  The Appellate Division of the New Jersey Superior Court reversed the decision of the Medicaid director, holding that Mother is entitled to Medicaid benefits with no penalty period for the transfer of the residence to Son. According to the Superior Court, “the credible evidence in the record supports the ALJ’s finding that [Mother] needed, and [Son] provided, special care and attention essential to her health and safety.”