Advocates are celebrating an important victory for individuals who provide care for their parents at home. The new decision will likely lead to a substantial expansion in the number of homes transferred to those caregivers. In A.M. v. Monmouth County Board of Social Services, the New Jersey Appellate Division recently reaffirmed the New Jersey regulation that allows older adults to transfer their homes to their adult caregiver children without Medicaid penalty. The regulation allows the transfer of the home without penalty when the adult child has provided care to the parent for a period of two years, which delayed the need for the parent to enter a long-term care facility.

Medicaid Penalty

New Jersey Medicaid has taken a hostile position to this rule and attempted to narrow it repeatedly over the years. In the past, the agency claimed that the regulation applied only to caregivers who did not work outside the home. In this decision, as in a couple of other recent cases, the Appellate Division has recognized that caregivers can qualify if they meet the requirements of the regulation regardless of whether they work outside the home. The Court held that the language of the regulation governs and requires only that:

1. The child lived with the parent for two years prior to institutionalization

2. The child provided special care that allowed the individual to remain at home when they would otherwise require a nursing home level of care

3. The care provided exceeded personal support activities and was essential to the health and safety of the parent

Major Victory

In the past, a major stumbling block to qualification for the caregiver exemption has been the agency’s position that the caregiver must either provide all care to their parent or pay for any other care provided from their own funds. This argument was rejected by the Court in the A.M. decision. The Court held that nothing in the regulation requires the child to be the sole caregiver. It further determined that the question of who paid for additional caregivers was completely irrelevant legally. Therefore, it is now clear that so long as the child personally provides essential care without which the senior would require a nursing facility, then the fact that additional caregivers are paid by the parent will not preclude transfer to the child. While this decision falls squarely within the plain language of the regulation, it is a seismic shift in practice, as the elder law community has fought against ever-stricter interpretations of the rule in recent years. This decision should lay to rest this issue and allow seniors to transfer their homes to their sons and daughters who provide essential care to them (thereby delaying the need for facility care) without fear of the Medicaid penalty.