South Florida is home to many Holocaust survivors who receive Holocaust reparations. Reparations get special treatment, both as income and assets, when an applicant applies for Florida Medicaid benefits.
Generally speaking, Florida Medicaid eligibility rules require that someone receiving benefits for longterm nursing care use a portion of his/her income for the nursing home bill. Holocaust reparations, however, are exempt from this requirement. Moreover, reparations that a Medicaid recipient has retained and are identifiable as such are considered exempt assets for Medicaid purposes, and not included in determing the individual's eligibility.
With regard to transfers of Holocaust funds, these also receive special status. Transfers made during the lookback period are not subject to the penalties normally incurred by transferring non-exempt assets.
The question that is often asked is, How can I substantiate that the funds I have transferred are in fact Holocaust funds? If the applicant has segregated Holocaust funds from other assets and income, obviously there is no problem. However, most people do not do so. In practice, reparations funds are usually comingled with other assets and income. In these situations, Florida law presumes that reparations monies are spent last, and ordinary income and investment income are spent first. This presumption can work to the advantage of a Holocaust survivor who applies for Medicaid benefits, as the example below illustrates:
A Holocaust survivor requires longterm nursing care and applies for Florida Medicaid benefits. He has received a total of $500,000 in reparations over the years. In the past three years - the lookback period - he and his spouse have given their children a total of $300,000. Based on the presumption that Holocaust funds are the last funds spent, and that the couple has not done any significant gifting prior to the lookback period, Medicaid would conclude that the gift represented reparations funds. The $300,000 gift would therefore be deemed exempt, notwithstanding the usual transfer rules and penalty periods.
Given the complexity of the application process for Florida Medicaid longterm care benefits, it is always advisable to consult with a Florida Certified Elder Law Attorney with ample experience in this area of the law.
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