Is any Income Excludible When Determining Medicaid Eligibility?

Defining income sounds simple but over the years we have fielded many questions from our elder law clients as to how New Jersey treats might treat different scenarios.  Following are some of the more common ones.  Money received from the sale of an asset (resource)is not income.  The sale of a home does not create income.

Loans received by the Medicaid applicant, which are actually payable,,are not counted as income.  However regular contributions to the Medicaid applicant from family members over an extended period of time which are impossible to repay, given the applicant’s current and/or future financial status, are not considered loans by New Jersey.  They are instead treated as income.

Where children have been paying for their parent’s care, we can often get that money back to the children through the sale of the parent’s home.  Creating loan documents (but not back dating anything) is often helpful to show the New Jersey Medicaid caseworker that a loan was intended and there is a financial ability to repay.