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When does New Jersey’s Medicaid Penalty Start?

New Jersey Medicaid determines that the Medicaid penalty begins when the applicant is below $2000 (or $4000 for some Medicaid programs), is in need of nursing home level care and applies for Medicaid, that is to say, the applicant is otherwise eligible for Medicaid “but for” the transfer of assets.

For example, if one transferred $140,000 without receiving anything of equal monetary value in return, within the five years immediately preceding the Medicaid application, the transfer penalty is 18 months.  The penalty does not begin until the applicant applies for Medicaid and meets all other qualifications “but for” the transfer of assets.