N.J. Court Gives Guidance on Hiring Aides – Part1
Just last week the New Jersey Appellate Division issued a decision regarding Medicaid that provides a road map for anyone hiring aides at home who hopes to qualify for Medicaid benefits when private funds run out. The case itself is unpublished which means it cannot be relied on as precedent in future cases. Nevertheless, it gives us insight into how the State treats the hiring of private aides and it confirms what I have been telling clients and prospects for years about the dangers in hiring aides and paying them “off the books”.
First let’s review an overview of the facts in the case. D.Z., thru her son as power of attorney, filed an application for institutional Medicaid. She was approved but with a 21 month penalty resulting from a transfer for less than fair value of $210,000. She appealed and at a fair hearing- the first level of appeal – D.Z.’s son testified that he had hired several aides to assist D.Z. with her activities of daily living (ie. dressing, bathing, ambulating) as well cooking, cleaning and doing laundry. The aides were paid between $13 and $15 per hour. One aide lived with D.Z. for several months and was paid $700 to $750 per week. It was the payments to these aides that comprised almost all of the $210,000 the State found questionable.
There was no contract entered into with any of the aides. D.Z. paid the aides by check made to “Cash”. In the memo section of many but not all of the checks the aide’s first name or nickname was written. Many of the checks included not only payment for services but also payment for items the aide purchased or would purchase for D.Z. Sometimes the name of the store where the purchase was made was also noted on the check, however, some checks did not have such notation. For this reason, most of the checks had differing amounts. The way D.Z. paid her aides is almost exactly the way countless families I have spoken with over the years have paid their private aides, which I have warned is a problem for Medicaid. Next week I’ll share with you whether the judges agreed with the State.