New Jersey Medicaid Penalty Divisor Increased For Gifts

In order for an applicant to eligible for long term care Medicaid in an assisted living facility or nursing home, there is a five-year look back period. This means that all financial records as well as any gifts made during the previous five years must be disclosed to Medicaid. In accordance with New Jersey law, if an individual or spouse made any monetary gifts over the course of the five years prior, then Medicaid would impose a gift penalty.

As of April 1, 2017, the New Jersey Medicaid Program increased the penalty divisor for applicants who make monetary gifts. The divisor was based on a survey conducted to determine the average cost of nursing home care within the State of New Jersey.

In order for an applicant to eligible for long term care Medicaid in an assisted living facility or nursing home, there is a five-year look back period. This means that all financial records as well as any gifts made during the previous five years must be disclosed to Medicaid. In accordance with New Jersey law, if an individual or spouse made any monetary gifts over the course of the five years prior, then Medicaid would impose a gift penalty.

A penalty period is a time frame in which an individual will not be entitled to receive Medicaid and will have to pay for their own cost of care in a nursing home facility or assisted living facility. For instance, if Medicaid imposes a three-month penalty period because you made gifts within the last five years, then you would be responsible for paying for the cost of care for those three months.

According to New Jersey State Law, the duration of a penalty period is based on the amount that an individual has made in gifts, and is determined using the penalty divisor. As of April 1, 2017, the New Jersey Medicaid Program increased the penalty divisor from $332.50 per day to $423.95 per day. This means that if an individual made $20,000 in gifts, her or she would incur a 48-day penalty.

Due to the increased penalty divisor, individuals will be penalized less for past gifts that were made. An experienced Medicaid planning lawyer can help you plan ahead for Medicaid and advise you how best to protect and distribute your assets. The attorneys at Hunziker, Jones, and Sweeney P.A. can explain the intricate Medicaid eligibility rules to you, help you decide if the program is right for you, and assist you with formulating a plan to divest yourself of assets. For more information or to schedule a consultation, call our New Jersey Medicaid planning law firm at (973) 256-0456 or fill out our contact form.

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