Fortunately, New Jersey ultimately interpreted the rule rationally. The New Jersey appeals court recently held that a Medicaid applicant’s transfer of her interest in her house to her son qualifies for the caretaker child exemption even though the son worked outside the home and hired aides to help care for his mother. See, A.M. v. Monmouth County Board of Social Services (N.J. Super. Ct., App. Div., No. A-5105-18, March 11, 2021). Unfortunately, the result was not easy, and was attained only after a protracted legal battle.
The son lived with his mother, and worked as a teacher. Mom transferred two-thirds of her interest in her home to her son and her daughter while retaining the remaining one-third interest. When mom was diagnosed with Alzheimer’s disease, the son arranged for caregivers to assist him with providing care for his mom while he was at work and paid the aides from mom's assets. Mom transferred her one-third interest in her house to him. Mom eventually entered a nursing home and applied for Medicaid. A doctor’s report stated that without the son's care, the mom would have entered the nursing home sooner. The Medicaid agency, nonetheless, imposed a penalty period based on mom’s transfer of her one-third interest to A.M.
The son requested a hearing, arguing that the transfer was exempt under the caretaker child exemption. An administrative law judge (ALJ) found that the care the son provided his mother went beyond the personal support a child is expected to provide and approved the exemption. The Medicaid agency reversed the ALJ’s decision, however, concluding that because the son had aides provide care for his mother and paid for the care out of her funds, the transfer was not exempt.
Understand the hypocrisy of the State's position here. The exemption is specifically designed to encourage a child to take care of their parents by permitting transfer of the home to them for doing so, where that care prevented institutional care. The State is essentially argues that if the child has a life beyond caregiving for the parent, and manages care for the mother through other caregiver's in order to ensure the highest continuity and quality of care, the child cannot be rewarded for the child's service. The State's position is essentially that a child can receive the benefit of the exemption only if the child devotes full time to caregiving, and more, refuses to engage paid assistance, potentially diminishing the quality of care provided. The State would bristle at the suggestion that its position encourages compromise to quality and safety, but is that not precisely the State's position?
Understandably, the son appealed. he New Jersey Superior Court, Appellate Division, reversed, holding that the transfer is exempt under the caretaker child exemption, ruling that there is nothing in the law preventing a caretaker child from working outside of the home or hiring aides to assist with caregiving. The court determined that there was ample evidence that before and after work, the son provided care beyond that normally expected of a child. According to the court, the “intent of the regulation – to encourage children to make the necessary arrangements to care for a parent in their home to avoid the public expense of institutionalization – would not be furthered by a requirement that the child caregiver work only a limited number of hours outside the home or earn no more than a particular income.”
The case represents an excellent result for aging in place proponents that is only diminished by the lengthy legal battle the son had to endure to attain the result.
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