Medicaid Applicant Who Began Paying Her Daughter After Two Years of Free Caregiving Receives Penalty Period

A New Jersey appeals court rules that a Medicaid applicant who paid her daughter to be a companion after two years of free caregiving did not rebut the presumption that a transfer of assets to a relative who previously provided services for free is an uncompensated transfer for Medicaid purposes. E.B. v. Division of Medical Assistance and Health Services (N.J. Super. Ct., App. Div., No. A-3087-15T4, July 13, 2018).

E.B. moved in with her daughter, J.W. After E.B. was diagnosed with Lewy body dementia, she needed a constant companion, and J.W. quit her job to care for her mother. After two years, J.W. began paying herself for companion services from her mother's savings. J.W. did not keep track of the services she provided or the days and hours. E.B. eventually moved in to a nursing home, and applied for Medicaid. The state determined that the payment of $69,211.90 for companion services over two years was an uncompensated transfer of assets and assessed a transfer penalty.

E.B. appealed, arguing that she rebutted the presumption she transferred assets for less than market value. The state ruled there was not sufficient proof of services provided for E.B. to justify the payment. E.B. appealed to court.

The New Jersey Superior Court, Appellate Division, affirms, holding that E.B. did not rebut the presumption that a transfer of assets to a friend or relative to compensate for care or services provided free in the past has been transferred for no compensation. According to the court, the lack of information about the specific services J.W. provided as well as the fact that E.B. was in a deteriorating condition that might require nursing home care when she began paying J.W. indicated the transfer was made for less than fair market value.

For the full text of this decision, go to: https://www.judiciary.state.nj.us/attorneys/assets/opinions/appellate/unpublished/a3087-15.pdf?cacheID=TSSOcTe

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