Petitioner challenged a final agency decision of the Acting Director, Division of Medical Assistance and Health Services finding her eligible for Medicaid benefits but: (1) imposing a penalty of $496,333.33 for the value of the one-third interest in her home she transferred to her son during the five-year look - back period " established in N.J.A.C. 10:71-4.10; and (2) directing that the penalty be increased by the value of a life estate in the home she relinquished to her son at time of the transfer. The court reversed the Acting Director's decision, finding the transfer of both interests in the property to be exempt from the penalty under the child caregiver exemption established in N.J.A.C. 10:71-4.10(d)(4). The regulation has not been previously construed in a published opinion.
The exemption applies to a Medicaid applicant's transfer of an interest in her home to a child who has lived in the home for a minimum of two years and provided assistance to the applicant beyond that normally expected of a child and which delayed the parent's institutionalization. The Acting Director found the exemption did not apply because petitioner's son: (1) worked full-time outside the home four days a week; (2) did not establish that the assistance he provided to his mother before work, after work, overnight, and during the day when he was not working delayed her institutionalization; (3) used petitioner's funds to pay for home healthcare aides when he was working; and (4) did not prove his claim to have reduced his work hours when his mother's dementia progressed.
The court found that the Acting Director misapplied the regulation, given the substantial evidence in the record that petitioner's son provided assistance beyond that normally expected of a child, including bathing, clothing, feeding, toileting, and medicating petitioner daily, as well as monitoring her overnight wandering and other needs. In addition, the court held that a child's full-time employment and use of home healthcare aides paid with petitioner's funds did not negate the exemption, as the regulation did not require that a child devote his full-time and own funds to caring for his parent to qualify for the exemption. The court held that it is the qualitative nature of the care provided by the child and the resulting delay in institutionalization that are relevant to applicability of the exemption.