Kenneth Vercammen, Esq is Chair of the ABA Elder Law Committee and presents seminars to attorneys and the public on Wills, Probate and other legal topics related to Estate Planning and Elder law. He is author of the ABA's book "Wills and Estate Administration. Kenneth Vercammen & Associates,
2053 Woodbridge Avenue - Edison, NJ 08817
(732) 572-0500 More information at www.njlaws.com/

Wednesday, July 15, 2009

10:71-9.5 Eligibility for other programs
(a) Review: The CBOSS will review each MAAC case in accordance with (a)1 below for
potential eligibility for other assistance programs through which the costs of medical care
may be met. Those programs will not include General Assistance but will include such
programs as SSI and Medicaid Only.
1. Review times: The CBOSS will conduct a review with respect to other program eligibility
at time of initial certification, at the beginning of the review month, whenever any change in
client income occurs and at the time of any change in standards of other appropriate
programs.
(b) Referral: If eligibility is found for regular Medicaid Only, the CBOSS will convert the case
accordingly. If potential eligibility is found for a program administered by another agency,
the CBOSS will make referral promptly and will institute procedures for follow-up of the
referral. Upon acceptance of the individual into any other program through which medical
costs are met, the CBOSS will terminate the MAAC case.
10:71-9.4 Continuation of medical need
(a) Submittal of data to DMAHS/MRT: Thirty days prior to the end of each certification
period, the CBOSS will forward to DMAHS/MRT photocopies of all forms and reports
bearing on the individual's need for continued inpatient hospital services, skilled nursing
home services, or home health care services required by reason of an illness necessitating
confinement at home for a prolonged period.
(b) Response by DMAHS/MRT: The DMAHS/MRT will review the submitted material and
notify the CBOSS of its determination. The determination will specify whether continuation
does or does not exist.
(c) CBOSS Action: Upon receipt of the DMAHS/MRT determination the CBOSS will, as
appropriate, move to terminate or recertify the case for such periods as may be required to
make the review month become the final month of the new certification period.
10:71-9.3 Termination
Once terminated for any reason, including loss of medical certifications, a case shall not be
reopened under the provisions of this subchapter.
10:71-9.2 Initial certification
(a) Certification begins for those persons and only for those persons who were in certified
status in the MAA program at the close of business on June 30, 1982 and those persons
that filed MAA applications on or before June 30, 1982 and whose eligibility was established
in accordance with regulations and case circumstances in effect on that date. The initial
certification period in MAAC consists of the remainder of the current MAA certification period
(see N.J.A.C. 10:71-9.4(a)).
(b) Recertification: Eligible persons will be recertified by the CBOSS for such additional
periods, usually for three months or as specified by DMAHS/MRT (see N.J.A.C. 10:71-9.4).
(c) Extension of certification periods: The CBOSS will extend initial or subsequent
certification periods in units of one month as may be necessary, pending receipt of a
medical need determination from DMAHS/MRT and/or, if applicable, to comply with
requirements for timely notice of adverse action (see N.J.A.C. 10:71-8.3). Extensions shall
not be made for any other reasons
10:71-9.1 General statement
The Medical Assistance for the Aged Continuation (MAAC) provides payment for the costs
of medical services for certain former beneficiaries of the program of Medical Assistance for
the Aged (MAA). Eligibility is based on continued medical need and lack of eligibility for any
other program through which the cost of medical care is provided. Beneficiaries receive the
full spectrum of Medicaid services.
10:71-8.8 Nondiscrimination in public assistance programs
Title VI of the Federal Civil Rights Act of 1964 (Public Law 88-352) and Section 504 of the
Federal Rehabilitation Act of 1973 prohibit discrimination on the ground of race, color,
national origin, or handicap in the administration of a program for which Federal funds are
received. Therefore, the policies and procedures relating to those acts, as outlined in
N.J.A.C. 10:81-7.36 through 7.38 (nondiscrimination in public assistance programs) are to
be strictly observed.
10:71-8.7 Safeguarding information
The Federal Social Security Act requires that a state must provide safeguards which restrict
the use or disclosure of information concerning applicants and beneficiaries to purposes
directly connected with the administration of public assistance. Therefore, the policies and
procedures outlined in N.J.A.C. 10:69-9.8 through 9.10 (safeguarding information) apply to
the Medicaid Only program.
10:71-8.6 Reporting criminal offenses to law enforcement authorities
Investigation of new applications or investigations for redetermination or eligibility may on
occasion present indications to the CBOSS that a crime may have been committed. In such
a situation, the procedures outlined in N.J.A.C. 10:69-9.19 through 9.20 (reporting criminal
offenses to law enforcement authorities) are to be followed.
10:71-8.5 Fraudulent receipt of assistance
To protect the assistance agency and the public against the commission of fraud, the
policies and procedures as defined in N.J.A.C. 10:81-7.40 through 7.45 (fraudulent receipt
of assistance) shall apply to the Medicaid Only program.
10:71-8.4 Complaints and fair hearings
(a) It is the right of every applicant for, or beneficiary of, Medicaid Only to be afforded the
opportunity for a fair hearing in the manner established by the policies and procedures set
forth in N.J.A.C. 10:49-10 and 10:69-6, regarding complaints and fair hearings (see N.J.A.C.
1:1). Complaints and fair hearings regarding Medicaid Only eligibility should be referred to:
Division of Medical Assistance and Health Services
Office of Legal and Regulatory Liaison
PO Box 712
Mail Code #3
Trenton, New Jersey 08625-0712
(b) In situations where an applicant or recipient is denied medical services to which he or
she feels that he or she is entitled, a request for a hearing and a brief explanation of the
situation should likewise be sent to the Office of Legal and Regulatory Liaison
10:71-8.3 Notice of county board of social services decision
The county board of social services shall promptly notify, in writing, the applicant for, or
beneficiary of, Medicaid Only of any agency decision. The policies and procedures outlined
in N.J.A.C. 10:87-7.1 through 7.6 shall be followed.
10:71-8.2 Redetermination of medical eligibility
(a) Redetermination of disability and blindness factors shall be done for every Medicaid
Only beneficiary at intervals set by the Division of Medical Assistance and Health Services,
Medical Review Team (MRT), except those beneficiaries who are currently receiving SSA
Disability Insurance Benefits. The redetermination review date is designated on Form PA-8,
Record of Action: Medical Eligibility Factor (see N.J.A.C. 10:71-3.13(g)).
(b) An individual who has been determined to be disabled or statutorily blind shall, if
requested with reasonable notice, present himself or herself for and submit to examinations
or tests, and shall submit medical and other evidence necessary for the purpose of
determining whether he or she continues to be disabled or statutorily blind.
(c) In Medicaid Only cases, the CBOSS shall take into account the redetermination review
date on Form PA-8 in scheduling both the annual review and interim visits. The CBOSS
may adjust the date for case submittal to the Medical Review Team (MRT), to coincide as
closely as is practical with either the annual review or with an interim visit, but such
adjustment shall assure that the case will be submitted not more than two months earlier
and in no event later than the date originally set on Form PA-8.
(d) The Medical Review Team (MRT) will maintain a control file in order to ensure
appropriate and timely reevaluation by the medical review team (MRT). The Medical Review
Team (MRT) will notify county board of social services one month in advance of cases
scheduled for such review by means of Form PA-655, Cases for Medical Review Team
Reevaluation Due During the Month.
(e) The eligibility worker shall organize his or her caseload controls (notebooks, index, and
other related materials or equipment) so that he or she will be alerted sufficiently in advance
of redetermination review dates to enable him or her to obtain any specific medical
information or reports requested on the last Form PA-8. The data and reports so submitted
must be "current."
(f) When a case is to be submitted to the Medical Review Team (MRT) for redetermination
review, the eligibility worker shall prepare Form PA-6A, Interim Medical Social Report in
detail. Form PA-6A shall be placed on top of all forms, reports and related data previously
submitted.
(g) Medicaid coverage shall be continued, if financial and resource eligibility continues to exist, unless and until the CBOSS is advised by the Medical Review Team (MRT) that the
individual no longer meets the disability and blindness requirements or the individual
withdraws voluntarily.
(h) Upon receipt of records from the Medical Review Team (MRT), the CBOSS shall follow
the procedures as outlined in N.J.A.C. 10:71-3.13(g)
10:71-8.1 Other agency responsibilities
(a) Determination of continuing eligibility: The eligibility of each case shall be redetermined
at least once every 12 months. This redetermination provides an opportunity to evaluate the
total situation and enables the eligibility worker to ascertain whether the individual's eligibility
has changed.
1. It shall be the agency's responsibility to review indications of ineligibility as they occur
and to discontinue Medicaid Only eligibility when appropriate and without delay. The agency
shall notify each applicant/beneficiary of any agency decision that relates to his or her
eligibility status in accordance with the provisions of (d) below and 8.3.
2. The individual, or his or her authorized representative, shall execute a formal written
application, Form PA-1G, Application and Affidavit for Medical Assistance Only (Aged, Blind,
or Disabled), for continuance of assistance at least once every 12 months.
(b) Process of redetermination:
1. Redeterminations of eligibility require the completion of Form PA-1G-NJR2
(Redetermination Form). The CBOSS may require that the form be completed during a faceto-
face interview. However, at the option of the CBOSS, and with the approval of the
beneficiary, the face-to-face interview may be eliminated. Form PA-1G-NJR2
(Redetermination Form) may be mailed to and completed by the beneficiary and mailed to
the CBOSS. All factors of eligibility subject to change (with the exception of disability and
blindness factors) must be verified or reverified.
i. When a loss of assistance will result, the face-to-face interview shall be required, unless
the agency documents a clear refusal by the beneficiary to have a face-to-face meeting.
Before benefits are terminated, a beneficiary shall be offered a face-to-face home visit. The
visit shall not be required to be in the office, but at the beneficiary's request, in the home.
2. Redetermination of financial and resource eligibility: The eligibility worker shall review all
eligibility factors in accordance with the provisions set forth in N.J.A.C. 10:71-3, 4, and 5.
Particular attention shall be directed to identification of any changes in resources and
income.
3. Completion of the Medicaid Eligibility Worksheet: It is the responsibility of the eligibility
worker to complete a new Form PA-1E when eligibility is to be continued, or terminated. A
PR-1 Statement of Income Available for Long Term Care Facility Payment should be
prepared for persons in institutions only when there is a change with regard to the amount
of income available for medical reimbursement.
4. Need for institutional care: Official review of this factor on a routine basis is not required,
but when medical or social evidence indicates that specific determination should be made,
the CBOSS shall institute such an investigation.
(c) Recording and recommendation: A Summary Report, Form PA-2D, concerning all
pertinent information shall be completed for each contact with the individual, whenever it
occurs. Whenever a change in circumstances affects any facet of eligibility, a Medicaid
Eligibility Worksheet (Form PA-1E) shall be prepared. The summary shall clearly state the basis for any termination of eligibility. Following each redetermination of eligibility, it is the
responsibility of the eligibility worker to recommend that eligibility be continued or
terminated.
(d) Notice of agency decision: Each applicant/beneficiary shall receive written notice of any
agency decision which relates to his or her eligibility status at least 10 days prior to any
change in his or her eligibility status.
10:71-7.5 Payment of burial and funeral expenses
The county board of social services is directed, under certain situations, to provide
payments for burial and funeral expenses on behalf of Supplemental Security Income and
adult "Medicaid Only" beneficiaries, as well as former Old Age Assistance, Disability
Assistance and Assistance for the Blind beneficiaries. The procedure authorizing these
payments is located at N.J.A.C. 10:90-8.
10:71-7.4 Emergency assistance payments
Eligible applicants and beneficiaries of Medicaid Only are not eligible to receive emergency
assistance as defined in N.J.A.C. 10:69-10.23.
10:71-7.3 Other service payments
Eligible applicants and beneficiaries of Medicaid Only are also eligible to receive certain
service payments as authorized at N.J.A.C. 10:69-10.22(b) and 10.23. These include
payments for expenses incident to homemaker service, travel costs for health care, and
childcare in certain situations.
10:71-7.2 Services and service payments
Eligible applicants and beneficiaries as defined under the State Plan for Title XX of the
Social Security Act may receive the services and related service payments specified in the
State Plan. The Division of Youth and Family Services is responsible for providing the
county board of social services with policies and procedures regarding these service
programs, including those specified in N.J.A.C. 10:71-7.3.
10:71-7.1 General provisions
Medicaid Only beneficiaries, like Supplemental Security Income (SSI) beneficiaries, are
eligible to receive services and related service payments for services identified at N.J.A.C.
10:71-7.2 and for payment of burial and funeral expenses as authorized by N.J.A.C. 10:71-
7.5. Such payments as deemed necessary and appropriate by the county board of social
services shall be paid either directly to the vendor of the service or by a check issued to the
eligible person.
10:71-6.1 Purpose of case records
The case record is a complete record in support of the CBOSS's decisions and actions for
each case.
10:71-6.2 Contents of the case record
(a) The following items shall be included in the case record:
1. The narrative recording;
2. All medical reports and record of action from the MRT (appropriate cases);
3. All forms related to financial eligibility; and
4. All related correspondence, memoranda and documents except those which are
required by law and regulation to be maintained in some other files.
10:71-6.3 Forms applicable to the Medicaid Only program
Forms applicable to the Medicaid Only program (aged, blind and disabled) are listed on
page 1 of Appendix A; sample forms follow that list.
10:71-6.4 Maintenance and custody of case records
All case record material relevant to each family shall be maintained under an appropriate
registration number. All records shall be appropriately indexed and filed.
10:71-6.5 Movement of case records
(a) No case record or official part of such record shall be removed from its designated filing
cabinet without an identifying record of the person who has custody of it.
(b) No case record or official part shall be removed from the offices of the county welfare
board except at the specific authorization of the director, deputy director or duly designated
representative of the director.
10:71-6.6 Retention and destruction of records
For policy and procedure on retention and destruction of case records see N.J.A.C. 10:69.
10:71-5.9 Deeming from sponsor to alien
(a) For the purposes of determining eligibility for Medicaid Only for a legal alien (applying
for the first time on or after October 1, 1980), the income and resources (see N.J.A.C.
10:71-4.7) of any person who sponsored the alien's entry into the United States will be
deemed to the alien. Such deeming applies for a period of three years from the month of
the alien's entry into the United States. However, deeming shall not apply to any alien who
is:
1. Admitted to the United States under the provisions of section 203(a)(7) of the
Immigration and Nationality Act which were in effect prior to April 1, 1980;
2. Admitted to the United States under the provisions of section 207(c)(1) of such Act
which became effective March 31, 1980;
3. Paroled into the United States as a refugee under section 212(d)(5) of such Act;
4. Granted political asylum by the Attorney General;
5. Determined to be blind or disabled if such blindness or disability began after the date of
admission into the United States for permanent residence; or
6. Sponsored by an institutional sponsor such as an employer or a church.
(b) In the event an alien is sponsored by a person subject to the deeming rules at N.J.A.C.
10:71-5.5, those rules will be used in lieu of the sponsor-to-alien rules.
(c) No inquiry shall be made regarding a sponsor's financial circumstance unless the alien's
own countable income and resources indicate potential program eligibility.
(d) Normal income exclusions do not apply in deeming of a sponsor's income to an alien.
Additionally, SSI benefits, TANF payments, as well as any other public income maintenance
payments are not excluded in sponsor-to-alien deeming.
(e) To determine the amount of income to be deemed to an alien, the dollar amounts in (e)2
and 3 below will be updated annually by publication of a notice of administrative changes in
the New Jersey Register reflecting the Federal cost-of-living adjustment to the SSI
standards established pursuant to 42 U.S.C. § 1382f. The CBOSS shall proceed as follows:
1. Determine the total gross earned (wages and net earnings from self employment) and
gross unearned income of the sponsor (and spouse if living with the sponsor).
2. Subtract $564.00 for the sponsor, $846.00 for the sponsor if living with his or her
spouse, $1,128 for the sponsor if his or her spouse is a co-sponsor.
3. Subtract $282.00 for any other dependent of the sponsor who is or could be claimed for
Federal Income Tax purposes.
4. The remaining amount is deemed as unearned income to the alien.
(f) In the event that a sponsor has sponsored more than one alien, there is no proration of
deemable income among the sponsored aliens. The income is fully charged to each alien
for which the sponsor has executed an affidavit of support.
10:71-5.8 Eligibility under life care and pay-as-you-go agreements
(a) In a contractual agreement where the individual has transferred his available assets to
the facility in exchange for full medical care in the institution, the institution has a legal
responsibility to provide such care and Medicaid benefits are not payable for the institutional
care. However, Medicaid eligibility may exist in the following circumstances (see also
N.J.A.C. 10:71-5.4(a)13):
1. When it can be determined that no enforceable contract exists (for example, because
the facility is financially unable to fulfill its responsibilities under the contract and all terms of
the agreement are thus void), the facility has a legal obligation to refund to the individual
any assets which remain from the amount assigned at the time the contract was signed.
The individual may be eligible for Medicaid Only as long as all other eligibility criteria
(including resources) are met.
2. When a contract is not actually rescinded and the individual retains his or her right under
the terms of the contract but, where his or her contract rights for care in the facility are not
fully met, Medicaid benefits may be available for those medical expenses not being met by
this facility if the individual meets eligibility requirements.
3. When the contractual agreement for care in the facility does not include all of the
medical care (for example, is limited to basic room and board), Medicaid benefits may be
available for those medical expenses not covered by the contract as long as all eligibility
criteria are met.
4. In those contractual situations above in which Medicaid eligibility may exist, the value of
in-kind room and board is not considered income.
10:71-5.7 Post-eligibility treatment of income; institutionalized individuals
(a) The amounts specified in (b) through (h) of this section shall be deducted from the
income of an institutionalized individual prior to the application of his or her income to the
cost of the long term care. These deductions apply only after the individual is determined
eligible for Medicaid and shall not be deducted in the determination of income eligibility.
1. Should the total deductions authorized under this section exceed the institutionalized
individual's income, no assistance is available from the Medicaid program to make up the deficit. In such circumstances, available funds shall first be used to provide the
institutionalized individual with his or her personal needs allowance. Any remaining
deductible income may be distributed to the community spouse or other family members as
decided by the institutionalized individual, not to exceed the amount authorized under this
section for any individual.
2. The deductions authorized in (c) through (e) below for the maintenance of the
community spouse and other family members apply only so long as there is a community
spouse as defined in (c) below. Deductions for the community spouse and other family
members shall cease in the first full-calendar month after the community spouse dies,
becomes divorced, or is institutionalized.
(b) A personal needs allowance in the amount of $35.00 shall be deducted from the
institutionalized individual's income. In addition, gross income derived from employment
that is considered essential toward satisfying the individual's developmental need to achieve
a certain amount of independence shall be deducted from the individual's income. The
combination of these deductions shall not exceed the amount in Table B for an individual
living alone as found at N.J.A.C. 10:71-5.6(c)5.
(c) There shall be deducted from the institutionalized individual's income an amount for the
maintenance of the community spouse. Except as specifically provided below, the deduction
for the maintenance of the community spouse shall not exceed $1,383. For purposes of this
section, a community spouse shall be defined as an individual who is legally married to an
institutionalized individual under the provisions of State law and who is not himself or herself
institutionalized. In arriving at the amount that may be deducted for the maintenance of the
community spouse, the deductions authorized by this section shall be reduced by the gross
income of the community spouse. The community spouse deduction is authorized only to
the extent that the income deducted is actually made available to (or for the benefit of) the
community spouse. No amount of the community spouse's maintenance deduction may be
retained by the institutionalized individual.
1. If the community spouse's average monthly shelter expenses for his or her principal
place of residence exceed $414.00, the amount of that excess shall increase the maximum
community spouse maintenance deduction. Shelter expenses are limited to rent or
mortgage (including principal and interest), taxes and insurance, a utility standard for the
individual's utility expenses, and in the case of a condominium or cooperative, the monthly
required maintenance charge.
2. A utility allowance shall not be authorized unless the community spouse directly incurs
charges for utilities. A community spouse who directly incurs charges for heating fuel (in
accordance with food stamp regulations at N.J.A.C. 10:87-5.10(a)5iv) separate and apart
from their rent or mortgage payments, shall be entitled to a utility allowance in the amount
specified as the "Heating Utility Allowance" at N.J.A.C. 10:87-12.1. If the community spouse
does not directly incur heating fuel charges but does directly incur charges for a utility other
than telephone, water, sewerage, or garbage collection, a utility allowance in the amount
specified as "Standard Utility Allowance" at N.J.A.C. 10:87-12.1 shall be authorized. If the
only direct utility charge incurred by the community spouse separate and apart from the rent
or mortgage is the telephone the amount specified at N.J.A.C. 10:87-12.1 as "Uniform Telephone Allowance" shall be added to the community spouse's monthly shelter costs.
The telephone allowance shall not be used if either of the above utility allowances have
been used because those standard allowances include telephone charges.
(d) When the institutionalized individual's income is insufficient to provide the maximum
authorized deduction for the community spouse, either the institutionalized spouse or the
community spouse can request a fair hearing in accordance with N.J.A.C. 10:71-8.4. If
either member can establish at the fair hearing that the income generated from the
community spouse's share of the couple's resources is inadequate to raise the community
spouse's income (together with the community spouse maintenance deduction) to the
maximum authorized level, additional resources (beyond the community spouse's share as
established at N.J.A.C. 10:71-4.8) may be set aside for the community spouse. The amount
of resources to be set aside shall be that amount that is determined sufficient to generate
sufficient income to raise the community spouse's gross income to the maximum authorized
level.
(e) If either the institutionalized spouse or the community spouse is dissatisfied with the
determination of the amount of the community spouse maintenance deduction, he or she
may request a fair hearing in accordance with N.J.A.C. 10:71-8.4. If it is established at the
fair hearing that the community spouse needs income above the amount established by the
community spouse maintenance deduction due to exceptional circumstances resulting in
financial duress, there shall be substituted for the community spouse maintenance
deduction such amount as is necessary to alleviate the financial duress and for so long as
directed in the final hearing decision.
(f) If a court has entered an order against an institutionalized spouse for monthly income for
the support of a community spouse and the amount of the order is greater than the amount
of the community spouse deduction, the amount so ordered shall be used in place of the
community spouse deduction.
(g) A family member maintenance deduction shall be calculated for each family member of
the institutionalized individual.
1. For purposes of this section, family members must reside with the community spouse
and shall be limited to the following persons:
i. Children of either member of the couple who are under the age of 21;
ii. Children over the age of 21 who are claimed as dependents by either member of a
couple for tax purposes under the Internal Revenue Code;
iii. Parents of either member of a couple who are claimed as dependents for tax purposes
under the Internal Revenue Code as dependents by either spouse; or
iv. A brother or sister (including half-brothers and half-sisters and siblings gained through
adoption) of either member of a couple and who are claimed as dependents for tax
purposes under the Internal Revenue Code.
2. The family member deduction shall be computed as follows. The family member's gross
income shall be subtracted from $1,383. One-third of the remaining amount shall be the
family member deduction for that family member. (h) If a physician has certified that the individual will be institutionalized for a temporary
period only and is likely to return to the residence within six months of the date of
institutionalization, a maximum of $150.00 may be deducted from the institutionalized
individual's income for the maintenance of his or her home in the community. This
deduction shall be limited to the actual costs of such maintenance (for example, mortgage
or rent payments, taxes, insurance, and other incidental costs) or $150.00, whichever is
less. This deduction may be applied against the individual's income for no longer than six
months. This deduction may not be applied if a deduction has been made for the
maintenance of a community spouse or other family member residing in that residence.
1. This deduction must be applied to the costs of maintaining the residence and may not
be accumulated by the institutionalized individual.
(i) If the institutionalized individual has health insurance covering himself or herself, the
amount of the insurance premiums shall be deducted.
1. If the premium is billed other than monthly, the amount of the premium shall be prorated
and deducted accordingly.
2. If the premium covers other individuals in addition to the institutionalized individual, only
that portion of the premium attributable to the institutionalized individual shall be deducted.
(j) No portion of a cash reward provided to any individual by the Division for providing
information about fraud and/or abuse in any program administered in whole or in part by the
Division shall be included in the computation of income for financial eligibility purposes.
10:71-5.6 Income eligibility standards
(a) Table B which follows shall be used to determine income eligibility for aged, blind, and
disabled persons who make application for Medicaid Only benefits. The standard used for
applicants/beneficiaries shall be determined in accordance with the following living
arrangement categories. (For cases involving the deeming of income, this section shall be
used in conjunction with N.J.A.C. 10:71-5.5). The income eligibility standards in Table B
which follows will be revised annually to reflect the annual cost-of-living adjustments to the
SSI payment standards made by the Social Security Administration in accordance with 42
U.S.C. § 1382f. A notice of administrative changes containing the revisions will be
published annually in the New Jersey Register.
(b) The income standard for Residential Health Care Facilities (RHCFs) (Table B, Figure I)
shall be used for individuals/couples residing in such facilities which are licensed by the
New Jersey Department of Health and Senior Services. Individuals in unlicensed facilities
shall always be categorized as "living alone" (N.J.A.C. 10:71-5.6(c) and Table B, II).
(c) Non-institutional living arrangements:
1. The category "living alone" (Table B, Figure II) shall be used for individuals/couples who
are:
i. Living physically alone;
ii. Living in a commercial establishment, such as a motel, hotel, rooming or boarding
house (including type A, B, and C, formerly known as unlicensed boarding homes) that
holds itself open to the public as such;
iii. Living in a business-like arrangement;
iv. Purchasing or preparing food separately, which applies to persons living with others in
a private dwelling, but separately purchasing or preparing their own food. The
determination is based on the person's customary food purchase and preparation habits.
Occasional joint purchase or preparation of food does not preclude a person from this
classification.
v. Taking of all meals elsewhere, which applies to persons living with others in a private
dwelling but taking all meals elsewhere.
vi. Persons living as members of a household but having ownership or rental
responsibility and paying more than their pro rata share of the household expenses
(because other members are paying less) are considered to be living alone.
(1) It is assumed that a couple share rental or ownership responsibility. Therefore, the
following steps are necessary to determine if the eligible individual with ineligible spouse
and other household members is paying more than his or her pro rata share of household
expenses.
(A) If the eligible individual's contributions (singly) are more than his/her pro rata
share of household expenses, he/she will be considered living alone. If not, proceed to
(c)1vi(1)(B) below.
(B) If the contributions of both the eligible individual and ineligible spouse to the
household are more than their pro rata share, they shall be considered to be living alone. If
their contribution is equal to or less than their pro rata share, the applicants/beneficiaries
shall be considered to be living with others (see N.J.A.C. 10:71-5.6(c)3).
(C) Household expenses are limited to: food; mortgage or rental payments; real
property taxes; heating fuel; gas; electricity; water; sewer; garbage removal.
2. The category "living alone with ineligible spouse" (Table B, Figure III) applies when an
individual lives with his or her ineligible spouse and there are no other persons who are part
of the household. If any other persons, even minor children, are present in the same
household, this category does not apply. Parents with minor children are always considered
to be in the same household; therefore, the presence of minor children would result in the
living arrangements described in either N.J.A.C. 10:71-5.6(c)3 or 5.6(c)4.
3. The category "living with others" (see Table B, Figure II) applies when the
individual/couple resides with others and either:
i. Has ownership or rental liability and pays an amount equal to or less than pro rata
share of household expenses (see N.J.A.C. 10:71-5.6(c) 1vi(1)(C)); or
ii. Does not have ownership or rental liability and is sharing household expenses with
other members of the household. Sharing is defined as paying a pro rata share or more of
household expenses (see N.J.A.C. 10:71-5.6(c) 1vi(1)(C)).
4. If the individual/couple lives in a household with adults other than a spouse and the
living arrangement has not already been determined in N.J.A.C. 10:71-5.6(c)1 through
5.6(c)3 above, the individual/couple may be considered to be living in the household of
another (Table B, Figure IV). The specific criteria for categorization in this living
arrangement is the receipt of both support and maintenance. That is, the individual/couple
does not purchase either food or shelter separately in accordance with (c)4i below.
i. If meals are consumed by an individual/couple in the household and the
individual/couple does not purchase either food or shelter separately, the individual/couple
shall be considered living in the household of another.
(1) Separate purchase of food means that the individual/couple pays a pro rata share of
the household's food or actually purchases food separately. An individual/couple receiving
food stamps as a separate food stamp household shall be considered to be purchasing food
separately.
(2) Separate purchase of shelter exists when the individual/couple contributes an amount
equal to the pro rata share of the household's shelter expenses. Shelter expenses are
limited to all items except "food" in N.J.A.C. 10:71-5.6(c)1vi(1)(C).
ii. Persons determined to be living in the household of another shall not be considered to
be receiving support and maintenance in-kind pursuant to N.J.A.C. 10:71-5.4(a)12 because
such in-kind income has already been taken into account in the eligibility standards.
5. Table B follows:
TABLE B
Variations in Living Arrangements Medicaid Eligibility Income Standards
Individual Couple
I. Residential Health Care Facility $ 714.05 $1,409.36
II. Living Alone or with Others $ 595.25 $ 871.36
III. Living Alone with Ineligible Spouse $ 871.36
IV. Living in Household of Another $ 420.31 $ 657.09
V. Title XIX Approved Facility: Includes persons in
acute general hospitals, nursing facilities,
intermediate care facilities/mental retardation
(ICFMR) and licensed special hospitals (Class A, B, C) and Title XIX psychiatric hospitals
(for persons under age 21 and age 65 and over)
or a combination of such facilities for a full $1,692.00+
calendar month.
+ Gross income (that is, income prior to any income exclusions) is applied to this Medicaid
"Cap."
(d) For the purpose of the Medicaid program, Title XIX approved facilities shall include
acute care general hospitals, nursing facilities, intermediate care facilities for the mentally
retarded (ICF/MR), and licensed special hospitals (Class A, B, and C) and Title XIX
psychiatric hospitals (for persons under age 21 and age 65 and over).
1. Persons are considered institutionalized if they enter a Title XIX approved facility and a
physician has certified that the duration of stay in the Title XIX facility (or a combination of
such facilities) is expected to be 30 consecutive days or more. Income eligibility shall be
determined in accordance with the variations contained in N.J.A.C. 10:71-5.4(b). However,
the income of the institutionalized individual shall not be reduced by any of the income
exclusions found in N.J.A.C. 10:71-5.3.
2. Institutionalized individuals, identified in (d)1 above, who are found Program eligible will
receive benefits as of the date of admission.
3. Persons in a facility which is not Title XIX approved or whose stay is expected to be a
period of less than 30 consecutive days will have eligibility determined in accordance with
the community living arrangement which existed prior to entering the facility.
4. Temporary absence from the institution: Any temporary absence, during which the
individual remains a patient of the institution, does not interrupt a continuous stay in the
institution.
5. Persons living in the community who do not otherwise qualify for Medicaid benefits and
who elect to participate in the hospice program, or who are assigned a slot in the CCPED or
other waiver programs, will have financial eligibility determined in the same manner as those
who reside in an institution.
i. Such individuals who are found eligible will receive benefits on the date of the election
of hospice benefits, or the date of assignment to a waiver slot, whichever is applicable.
(e) No portion of a cash reward provided to any individual by the Division for providing
information about fraud and/or abuse in any program administered in whole or in part by the
Division shall be included in the computation of income for financial eligibility purposes.
10:71-5.5 Deeming of income
(a) When an applicant/beneficiary is an adult residing in the same household with his or her
ineligible spouse or is a child residing in the same household with his or her parent(s) or
spouse of the parent, the income of the ineligible spouse or parent(s) is considered in the
determination of financial eligibility. The amount included as income to the
applicant/beneficiary, whether or not it is actually available, is called deemed income and is
computed as described in N.J.A.C. 10:71-5.5(c), (d), (e) and (f).
1. Child: For the purpose of this section, a child is an individual who is not married and is
under the age of 18 (see N.J.A.C. 10:71-5.3(a)15i regarding earnings of a child who is a student). Additionally, deeming of parental income to a blind or disabled child ceases when
the child reaches age 18.
2. Parent: A parent, for deeming purposes, is a natural or adoptive parent or stepparent
living in the same household as an applicant/beneficiary child. However, death or divorce of
the natural or adoptive parent terminates deeming responsibility of a stepparent.
(b) Items not included in deeming: In determining the income of an ineligible spouse,
parent and/or spouse of a parent, or income of any ineligible children in the household, the
following are not included as income:
1. Any assistance based on need and any income considered in the determination of the
amount of such assistance;
2. That portion of any grant, scholarship, or fellowship, used to pay the cost of tuitions and
fees at an educational institution or costs of vocational technical training designed to
prepare the individual for gainful employment;
3. Amounts received for foster care of an ineligible child;
4. The value of food stamps or U.S. Department of Agriculture donated foods (e.g.,
supplemental food programs);
5. Home produce grown for personal consumption;
6. Refund of taxes paid on income, real property, or food purchased by the family;
7. Such income used to comply with the terms of court-ordered support and support
payments pursuant to Title IV-D of the Social Security Act;
8. The value of in-kind support and maintenance furnished to the ineligible spouse,
ineligible parent(s) or ineligible spouse of a parent, and ineligible children in the household;
9. Income and benefits received under certain Federal programs described in Section
N.J.A.C. 10:71-5.3(a)7;
10. The earned income of an ineligible child who is a student (subject to the limitations of
N.J.A.C. 10:71-5.3(a)15, unless the child actually makes the income available to the family);
11. Income necessary for a plan to achieve self-support but only if the spouse's or parental
income is actually being used according to the plan to achieve self-support.
(c) Deeming of income from spouse to spouse: If the applicant's/beneficiary's own
countable income, as determined in accordance with N.J.A.C. 10:71-5.2, less appropriate
exclusions in N.J.A.C. 10:71-5.3, exceeds the applicable Medicaid Only income eligibility
standard in Table B at N.J.A.C. 10:71- 5.6(c)5, the applicant/beneficiary is financially
ineligible for Medicaid Only based on his or her own countable income, and there is no
deeming. However, if the applicant's/beneficiary's own countable income renders him or her
financially eligible for Medicaid Only, the following steps shall be used to compute deemed
income:
1. Step 1: Calculate separately the ineligible spouse's earned and unearned income, less
any income excluded in accordance with N.J.A.C. 10:71-5.5(b). Do not combine the two
totals.
2. Step 2: Determine the living allowance for each ineligible child not receiving public
assistance, by subtracting the child's countable income from the amount of the living
allowance for an ineligible child in Table A, Figure 1. 3. Step 3: Subtract the living allowance for each ineligible child, determined in Step 2
above, from the unearned income of the ineligible spouse. Subtract any remaining living
allowance from the earned income of the ineligible spouse. For any ineligible child receiving
public assistance, no living allowance may be subtracted.
4. Step 4: If the total remaining income (earned plus unearned) of the ineligible spouse is
equal to or less than the appropriate remaining income amount in Table A, Figure 2, no
income is available for deeming to the applicant/beneficiary. The deeming process stops.
i. Determine the beneficiary's income eligibility for Medicaid Only by comparing his or her
own countable income to the appropriate Medicaid Only income eligibility standard in Table
B at N.J.A.C. 10:71-5.6(c)5.
5. Step 5: If Step 4 above does not apply, and the ineligible spouse's remaining total
income (earned plus unearned) exceeds the appropriate remaining income amount in Table
A, Figure 2, the deeming process continues and the applicant/beneficiary and his or her
ineligible spouse are treated as a couple. The following deeming steps shall be used to
compute the couple's countable income:
i. Add the ineligible individual's remaining unearned income after the deduction of the
living allowance for the ineligible child(ren) to all of the beneficiary's unearned income.
Determine the value of in-kind support and maintenance in deeming situations, in
accordance with N.J.A.C. 10:71- 5.4(a)12.
(1) Do not apply the $20.00 general income exclusion to the beneficiary individual's
income before combining the income.
ii. Add the ineligible individual's remaining earned income after deduction of the living
allowance for the ineligible child(ren) to all of the applicant's/beneficiary's earned income.
iii. Treat the two totals of unearned and earned income in the same manner as those of
an eligible couple. Apply appropriate income exclusions and compute the couple's
countable income as follows:
(1) First, subtract the $20.00 general income exclusion from the total unearned income.
Then, subtract any unused portion of the general income exclusion from the total earned
income, if any.
(2) From the remaining earned income, subtract $65.00 (work expense allowance) and
one-half of the remainder of earned income.
(3) Add the remaining earned and unearned income together to arrive at the couple's
total countable income.
6. Step 6: If the couple's (applicant/beneficiary and ineligible spouse) remaining countable
income is less than the amount in Table A, Figure 3, for the appropriate living arrangement,
the applicant/beneficiary is financially eligible for Medicaid Only. If the couple's remaining
income is equal to or greater than the amount in Table A, Figure 3, for the appropriate living
arrangement, the applicant/beneficiary is financially ineligible for Medicaid Only.
(d) Deeming of income to spouse and child(ren): In situations when an ineligible individual
is subject to deeming of his or her income to both an applicant/beneficiary spouse and an
applicant/beneficiary child, the following deeming procedures are used:
1. Step 1: Determine the amount of income, if any, to be deemed to the
applicant/beneficiary spouse in accordance with the procedures in N.J.A.C. 10:71-5.5(c). 2. Step 2: If, after deeming of income from the ineligible spouse, the adult
applicant/beneficiary is financially eligible for Medicaid Only, there is no income available for
deeming to the applicant/beneficiary child(ren). The deeming process stops.
3. Step 3: If, in the process of deeming of income to the applicant/beneficiary spouse, such
spouse becomes financially ineligible for Medicaid Only, that portion of deemed income that
exceeds the eligibility level in Table A, Figure 3, for the appropriate living arrangement for
the adult applicant/beneficiary shall be deemed to any child applicant/beneficiary. This
income is treated as unearned income to the child.
4. Step 4: If there is more than one child applicant/beneficiary in the household, divide the
deemable income equally among them. However, income is not deemed to any child in
excess of that amount which, in combination with his or her own countable income, creates
financial ineligibility for the child. That portion of deemed income that exceeds the eligibility
level in Table B, for the appropriate living arrangement, shall be available for deeming
equally to any other applicant/beneficiary child(ren) in the household (in accordance with
Step 5 below) in addition to their equal shares of the total parental deemable income.
5. Step 5: Combine any income deemed to the eligible child together with any countable
income of the eligible child.
i. First, subtract the $20.00 general income exclusion from the child's unearned income.
ii. If the child's total income is less than the appropriate income eligibility standard in
Table B, the child is financially eligible for Medicaid Only.
iii. If the child's total income is greater than the appropriate income eligibility standard in
Table B, the child is financially ineligible for Medicaid Only, and that portion of deemed
income that exceeds the eligibility level in Table B, for the appropriate living arrangement for
the applicant/beneficiary child, shall be available for deeming equally to any other
applicant/beneficiary children in addition to their equal shares of the total deemable income.
(e) Deeming of income from a parent (and spouse of a parent) to a child: The computation
methods for deeming of income from an ineligible parent (and spouse of a parent) to a child
differ depending on the type of parental income.
1. Step 1: Determine the total monthly parental income, both earned and unearned
(separately), less any income excluded in N.J.A.C. 10:71-5.5(b). Do not combine the two
totals.
i. Determine the living allowance for each ineligible child not receiving public assistance,
by subtracting the child's countable income from the amount of the living allowance for an
ineligible child in Table A, Figure 1. No allowance may be deducted for a child receiving
public assistance.
ii. Subtract the living allowance for each ineligible child, determined in (e)1i above, from
the unearned income of the parent(s). Subtract any remaining living allowance from the
earned income of the parent(s).
iii. The remaining parental income should be treated in accordance with the procedures of
Step 2, 3, or 4 below, as appropriate.
2. Step 2: Remaining parental income is earned income only:
i. From the remaining parental earned income, subtract $85.00 ($20.00 general income
exclusion plus $65.00 work expense exclusion).
ii. Next, subtract the appropriate parental living allowance for the parent (and spouse of a
parent) living in the household. This parental allowance is found in Table A, Figure 4a.
iii. The remaining amount is the income deemed to the applicant/beneficiary child(ren).
This deemed income is treated as unearned income.
iv. Combine any income deemed to the eligible child together with any countable income
of the eligible child.
(1) Subtract the $20.00 general income exclusion from the child's unearned income.
v. If the child's total countable income is less than the appropriate income eligibility
standard in Table B, the child is financially eligible for Medicaid Only.
3. Step 3: Remaining parental income is unearned only:
i. From the remaining parental unearned income, subtract $20.00 (general income
exclusion).
ii. Next, subtract the appropriate parent living allowance for the parent (and spouse of a
parent) living in the household. This parental allowance is found in Table A, Figure 4b.
iii. The remaining amount is the income deemed to the applicant/beneficiary child(ren).
This deemed income is treated as unearned income.
iv. Combine any income deemed to the eligible child together with any countable income
of the eligible child.
(1) Subtract the $20.00 general income exclusion from the child's unearned income.
v. If the child's total income is less than the appropriate income eligibility standard in
Table B, the child is financially eligible for Medicaid Only.
4. Step 4: Remaining parental income is both earned and unearned:
i. First, subtract the $20.00 general income exclusion from the remaining parental
unearned income. Then, subtract any unused portion of the general income exclusion from
the remaining parental earned income.
ii. From the remaining earned income, subtract $65.00 (work expense allowance) and
one-half of the remainder of earned income. Combine any remaining earned income with
the remaining unearned income.
iii. Subtract the appropriate parental living allowance for the parent (and spouse of
parent) living in the household. This parental allowance is found in Table A, Figure 4c.
iv. The remaining amount is the income deemed to the applicant/beneficiary child(ren).
This deemed income is treated as unearned income.
v. Combine any income deemed to the eligible child together with any countable income
of the eligible child.
(1) Subtract the $20.00 general income exclusion from the child's unearned income.
vi. If the child's total income is less than the appropriate income eligibility standard in
Table B, the child is financially eligible for Medicaid Only.
(f) Treatment of income deemed to a child: Any income deemable to a child is treated as
unearned income and thus subject to the $20.00 general income exclusion. If there is more
than one applicant/beneficiary child in the household, the deemable income is divided
equally among them. However, no income is to be deemed in excess of the amount which,
when combined with the child's own countable income, creates ineligibility. That portion of
deemed income that exceeds the eligibility level in Table B, for the appropriate living
arrangement, is available for deeming equally to other applicant/beneficiary children in the household in addition to their equal shares of the total parental deemable income. The
following steps shall apply in treatment of income deemed to a child:
1. Step 1: Combine any income deemed to the eligible child together with any countable
income of the eligible child.
2. Step 2: Subtract the $20.00 general income exclusion from the child's unearned
income.
3. Step 3: If the child's total remaining income is less than the appropriate income eligibility
standard in Table B the child is financially eligible for Medicaid Only. The child has no
excess deemed income available for other applicant/beneficiary children.
4. Step 4: If, in the process of deeming of income to an applicant/beneficiary child, such
child becomes financially ineligible for Medicaid Only, that portion of deemed income that
exceeds the appropriate income eligibility standard in Table B shall be divided equally
among other applicant/beneficiary children in the household, in addition to their equal
shares of the total parental deemable income, and shall be counted in determining financial
eligibility for Medicaid Only for such other children.
(g) Table A which follows shall be used in deeming computation amounts. Table A will be
revised annually in accordance with Federal cost-of-living adjustments made pursuant to 42
U.S.C. § 1382(f). A notice of administrative changes containing the revisions will be
published annually in the New Jersey Register.
TABLE A
Deeming Computation Amounts
1. Living allowance for each ineligible child $282.00
2. Remaining income amount
Head of Receiving Support
Household and Maintenance
$ 282.00 $ 188.00
3. Spouse to Spouse Deeming--Eligibility Levels
a. Residential Health Care Facility $1,409.36
b. Eligible Individual Living Alone or with Ineligible $1,153.36
Spouse
c. Living Alone or with Others $ 877.25
d. Living in the Household of Another $ 657.09
4. Parental Allowance--Deeming to Children Remaining Income is:
Parent and
One Parent Spouse of Parent
a. Earned only $1,128.00 $1,692.00
b. Unearned only $ 564.00 $ 846.00
c. Both earned and unearned $ 564.00 $ 846.00
10:71-5.4 Includable income
(a) Any income which is not specifically excluded under the provisions of N.J.A.C. 10:71-5.3
shall be includable in the determination of countable income. Such income shall include, but
is not limited to, the following:
1. Wages, salaries, tips, and commissions: Any and all compensation for services
performed as an employee shall be included as earned income.
2. Income from self-employment: Net adjusted income from self-employment shall be
included as earned income.
i. Determination of net adjusted income from self-employment: In the determination of net
adjusted income, IRS rules shall apply.
(1) Individual business: Net adjusted income shall be the amount of gross income, less
all allowable deductions attributable to the trade or business.
(2) Partnership: Net adjusted income shall be the individual's distributive share of the
trade or business in which he/she is a partner.
ii. Annualization of income: If income from self-employment is received on other than a
monthly basis, such income shall be averaged over the most recently ended taxable year in
order to determine the average monthly or quarterly income to the individual, with the
following exceptions:
(1) Seasonal self-employment: An individual whose income from seasonal selfemployment
is supplemented by income from employment and/or other sources during the
balance of the year shall not have his/her self-employment income annualized. Income
from self-employment shall be averaged only over the period in which it is intended to cover.
3. Annuities, pensions, and other benefits: Payments received in an annuity, pension,
retirement or disability benefits, workers or unemployment compensation, veteran's Social
Security (gross income), or strike benefits shall be included as unearned income.
i. Social security income: SSA gross income shall be defined as the actual amount of the
check, plus any premium deduction made under the Supplemental Medical Insurance
Program (SMI on Part B Medicare).
4. Educational grants and loans: Scholarships, educational grants, fellowships, and
veteran's educational benefits shall be included as unearned income, except as provided in
N.J.A.C. 10:71-5.3(a)10.
5. Support, alimony, and inheritances: Support, alimony, and inheritances, in the amounts
actually received, shall be included as unearned income except as provided in N.J.A.C.
10:71-5.3(a)14.
6. Vendor payments: Cash payments, except those for medical costs, which are made on
behalf of the individual by an organization or other third party shall be included as unearned
income.
7. Proceeds of life insurance policies: Payments made as the result of the settlement of a
life insurance policy claim shall be included as unearned income except as provided in
N.J.A.C. 10:71-5.3(a)8.
8. Prizes, gifts, and awards: Cash or in-kind payments which are received as prizes, gifts,
or awards shall be included as unearned income. (Occasional gifts, such as Christmas
presents, with a value of $20.00 or less, are excluded.)
i. Gift defined: A gift shall be defined as any payment which is neither given as
compensation for services or other consideration, nor as satisfaction of any legal obligation
to the beneficiary of the gift.
ii. Value of in-kind prizes, gifts, or awards: The value of an in-kind prize, gift, or award
shall be its cash value.
9. Dividends, interest royalties: Dividends, interest, and royalties shall be included as
unearned income.
10. Rental income and income from roomer-boarder: The amount remaining, after all the
costs (except depreciation costs) of producing the income have been deducted, shall be
included as unearned income.
11. Lump-sum payments: A lump-sum payment shall be included as income (either earned
or unearned, as appropriate) either in the month in which it is received or prorated over
three months when the payment exceeds the individual's monthly deficit, except as follows:
i. No portion of a cash reward provided to any individual by the Division for providing
information about fraud and/or abuse in any program administered in whole or in part by the
Division shall be included in the computation of income for financial eligibility purposes.
12. Support and maintenance furnished in-kind (community cases): Support and
maintenance encompasses the provision to an individual of his or her needs for food,
clothing, and shelter at no cost or reduced value. Persons determined to be "living in the
household of another" in accordance with N.J.A.C. 10:71-5.6 shall not be considered to be
receiving in-kind support and maintenance as the income eligibility levels have been
reduced in recognition of such receipt. Persons not determined to be "living in the
household of another" who receive in-kind support and maintenance shall be considered to
have income in the amount of:
$208.00 for an individual
$302.00 for a couple
i. In the event the individual/couple can demonstrate that the actual value of in-kind
support and maintenance is less than the assigned value, the lesser value shall be
counted as unearned income.
ii. The income levels in (a)12 above shall be revised annually to reflect the annual cost-ofliving
adjustment to the SSI payment standard made by the Social Security Administration in
accordance with 42 U.S.C. § 1382f. The income level revisions to (a)12 above will be
published annually as a notice of administrative change in the New Jersey Register.
13. Support and maintenance furnished in-kind (other living situations):
i. Title XIX facilities: In-kind support and maintenance is not counted in cases in which the
individual is considered institutionalized for program purposes (i.e., the individual's eligibility
is determined under the Medicaid "Cap").
ii. Private nonprofit domiciliary care facility: The value of in-kind support and maintenance
provided an individual in a nonprofit residential care facility is excluded when all the
following conditions are met:
(1) The facility is not a public facility. A public facility is one which is the responsibility of a
governmental unit or over which a governmental unit exercises administrative control.
(2) The facility, or the distinct portion in which the individual resides, is neither a Title XIX
in-kind nor an institution for educational or vocational training.
(3) The facility is tax-exempt under Section 501(c) or (d) of the Internal Revenue Code.
(4) The facility (or organization controlling it) provides support and maintenance to the
individual but does not receive payment for that part to be excluded or receives such
payment from a private nonprofit organization which is also tax exempt under Section 501(c)
or (d) of the Internal Revenue Code.
(5) The nonprofit facility or nonprofit organization has not undertaken an express
obligation to furnish full support and maintenance to the individual. An express obligation to
provide full support and maintenance exists when an institution agrees to provide lifetime
care in return for a specified lump sum payment and there is no requirement for any current
or future payment. An express obligation also exists if, as a result of the membership of the
individual or of a relative, in an organization (fraternal or religious order, union, etc.) there
exists a written document requiring the facility to provide lifetime care regardless of payment
provided.
(6) If the criteria in (a)13ii(1)-(5) above are not met, the value of support and maintenance
is determined in accordance with (a)13iii below.
iii. Other nonmedical facilities:
(1) Facility is proprietary (private for-profit) or private non-profit and no third party pays:
The value of in-kind support and maintenance is excluded from income if it is provided by
such a facility, no third party payment is made for it, and:
(A) The individual makes some payment which the facility accepts as payment in full
(even though its usual charge may be higher); or
(B) The individual contracts a written indebtedness to the facility for his/her support
and maintenance and the facility accepts the amount of the debt plus the individual's
payment, if any, as payment in full.
(2) Facility if proprietary or private nonprofit and third party pays: When a proprietary
(private for-profit) or private nonprofit facility provides support and maintenance to an
individual because a third party pays the facility on that individual's behalf, that individual is
receiving in-kind support and maintenance. The value of the in-kind support and
maintenance is determined in accordance with (a)12 above.
(3) Other situations regardless of third-party payment: In other types of facilities, support
and maintenance provided by that facility is unearned income to the individual in
accordance with (a)12 above.
(b) Countable income: Income remaining after appropriate income exclusions shall be
applied toward the applicable income eligibility standard. The applicant's living arrangement affects the method of treatment of income and its relationship to the standards as stated in
the variations appearing below.
1. Applicant/beneficiary living alone: If the applicant/beneficiary lives alone, only his or her
countable income shall be applied to the appropriate income standard.
2. Applicant/beneficiary couple: In the case of an applicant/beneficiary couple, living
together, the total amount of husband's and wife's countable income shall be combined and
applied to the appropriate income eligibility standard for a couple. Such individuals will
continue to have their countable income combined until they have been separated for a
period of six months.
i. One member of couple institutionalized: When one member of an applicant/beneficiary
couple is institutionalized and the other remains in the community, no income of the
community spouse will be used in the determination of income eligibility beginning in the
month of admission into a Title XIX facility.
ii. Institutionalized couple: When an applicant/recipient couple is institutionalized in the
same facility, the gross income of each individual is combined and applied to an amount
equal to two times the Medicaid "Cap." If, however, the applicant/recipient couple is
institutionalized in separate facilities, the income of each is applied individually to the
Medicaid "Cap."
3. Applicant/beneficiary living with ineligible spouse: if the applicant/beneficiary lives with
an ineligible spouse, the income of the ineligible spouse is deemed to the
applicant/beneficiary (see N.J.A.C. 10:71-5.5). Such individual's income shall continue to be
deemed until the husband and wife have been separated for one month. At such time the
individuals will be considered to be living alone and deeming shall cease.
i. Effect of institutionalization: Income of the community spouse shall not be considered in
the determination of income eligibility of the institutionalized individual beginning with the
month of admission into a Title XIX facility.
4. Applicant/beneficiary unmarried and under 18 years of age, living with parents: If the
applicant/recipient is an unmarried child under 18 years of age who lives with his or her
parents (including stepparents), the income of the parents is deemed to the child (see
N.J.A.C. 10:71-5.5(c)3). Such deeming will cease when a child has ceased living with
his/her parents for a period of one calendar month.
i. Child not living with parents due to institutionalization: If a physician has certified that
the child's duration of stay in a Title XIX facility (or a combination of such facilities) is
expected to be a full calendar month or more, such child shall be considered to be not living
with his/her parents and deeming shall cease at the time of such certification.
10:71-5.3 Income exclusions
(a) Only the following income shall be excluded in the determination of countable income.
Income exclusions shall be applied to unearned income first, then to earned income as
appropriate. Exclusions shall be applied in the order of their appearance in this section.
1. Monies received as a result of the sale of a resource shall be excluded. These monies
shall be treated as a resource (see N.J.A.C. 10:71-4.2 and N.J.A.C. 10:71-4.4(b)8ii).
2. Monies received as a result of the settlement of a casualty insurance claim, if such
settlement is intended as compensation for the loss or destruction of a previously
excludable resource, shall be excluded (see N.J.A.C. 10:71-4.4(b)8i).
3. Third-party payments for medical care or services, including room and board furnished
during medical confinement, shall be excluded.
4. The value of social services (for example, advice, training, consultation) performed by
any governmental or private agency shall be excluded.
5. The value of food stamps shall be excluded.
6. All loans which are actually repayable shall be excluded.
i. Regular contributions to an individual by his or her family, which are made over an
extended period of time and which would be impossible to repay given the individual's
current and/or future financial status, shall not be considered loans. Contributions of this
nature shall be treated as income in accordance with N.J.A.C. 10:71-5.2.
7. Benefits received under the following Federal programs shall be exempt:
i. The value of benefits received under the Federal WIC program shall be exempt.
ii. The value of meals provided under the National School Lunch Act shall be exempt.
iii. Training incentive payments made under the Comprehensive Employment Training Act
(CETA) of 1973 shall be exempt.
iv. Payments received under Title II of the Uniform Relocation and Real Property
Acquisition Policies Act of 1970 shall be exempt.
v. Payments received for services performed in connection with the Domestic Volunteer
Service Act of 1973 shall be exempt. Such programs include the Foster Grandparents
Program, Older Americans Community Service Program, the Retired Senior Volunteer
Program (RSVP), the Service Corps of Retired Executives (SCORE), Volunteers in Service
to America (VISTA), the Active Cooperative Volunteer Program (AVP), the Active Corps of
Executive (ACE), and other programs which are coordinated by the Federal ACTION
agency.
vi. Payments made by the Disaster Assistance Administration shall be exempt.
vii. The value of assistance to children under the Child Nutrition Act of 1966 shall be
exempt.
viii. Payments from Home Energy Assistance (HEA) and the Crisis Intervention Program
shall be exempt.
ix. Payments received from the Youth Incentive Entitlement Pilot Projects, Youth
Community Conservation and Improvement Projects, and the Youth Employment and
Training Programs under the Youth Employment and Demonstration Projects Act of 1978
shall be exempt. However, payments from the Adults Conservation Corps under that Act or
any other payments under the Comprehensive Employment and Training Act (CETA) of
1973 (with the exception of (a)6iii above) may not be excluded.
x. The amount of the annual cost-of-living increase in Social Security benefits for those
individuals who became ineligible for Supplemental Security Income (SSI) solely as a result
of SSA cost-of-living increases after June 30, 1977 shall be exempt. Individuals eligible for
this exemption are entitled to an additional exemption of the dollar amount of all SSA costof-
living increases subsequent to that increase which created their SSI ineligibility.
xi. For certain individuals, the dollar amount of the October 1972, 20 percent cost-of-living
increase in Social Security benefits shall be exempt. In order to qualify for this exemption,
the individual must have been, for the month of August 1972:
(1) Eligible for or receiving cash assistance under Old Age Assistance, AFDC, Aid to the
Blind, or Disability Assistance (including persons who were eligible for such assistance but
not receiving such assistance because they had not applied for it or because they were
residents in medical or intermediate care facilities); and
(2) Entitled to a monthly insurance benefit under Title II of the Social Security Act (RSDI).
8. That part of the proceeds of a life insurance policy which is used to pay the last illness
and burial expenses of the insured shall be excluded.
i. Last illness and burial expenses shall include related hospital, medical, funeral, burial
plot, interment expenses, and related costs.
9. Refunds on taxes for food, real property, or income shall be exempt.
10. That portion of a grant, scholarship, or fellowship which is to be used to pay tuition and
mandatory fees (as defined by the educational institution) shall be excluded.
11. The value of agricultural produce, if raised for home consumption, shall be excluded.
12. Certain irregular and/or infrequently received income shall be excluded as follows:
i. Unearned income which totals $60.00 or less per quarter (any consecutive three-month period), and which is received less frequently than twice per quarter or cannot be
reasonably anticipated shall be excluded.
ii. Earned income which totals $30.00 or less per quarter (any consecutive three-month
period), and which is received less frequently than twice per quarter or cannot be
reasonably anticipated shall be excluded.
13. Monies paid to an individual as compensation for the care of a legally assigned foster
child shall be excluded. (This income is not excludable if the child is an eligible individual in
his or her own right, or if he or she does not reside in the home of the eligible individual(s).)
14. One-third of the amount received as child support from an absent parent shall be
excluded.
15. Income received as compensation for services performed as an employee, or from
self-employment, by an unmarried student who is under 22 years of age, shall be excluded
to the extent that such income does not exceed $1,200 in a calendar quarter and/or $1,620
per calendar year.
i. A person shall be considered a student if he or she meets the following criteria:
(1) He or she is enrolled in a course or courses of study and attends to the extent
required for continued enrollment. Specifically, a person must attend:
(A) A college or university at least eight semester or quarter hours weekly; or
(B) A secondary school at least 12 clock hours weekly; or
(C) A course of vocational or technical training (other than at a secondary school,
college, or university) designed to prepare the student for gainful employment involving
shop practice, at least 15 clock hours a week; or without shop practice, at least 12 clock
hours per week; or
(D) Less than the appropriate requirements in (a)15i(1)(A), (B), and (C) above, if it is
determined that there are extenuating circumstances beyond the control of the student and
he/she is pursuing a course of study comparable to the requirements of (a)15i(1)(A), (B),
and (C) above.
(2) A student shall be considered in regular attendance if he or she is engaged in home
study provided by a secondary school, college, university, or governmental agency, and a
home visitor or tutor supervises the study or training. For purposes of this section,
government-sponsored courses in the various self-improvement and anti-poverty programs
are considered to be for the purposes of preparing the student for gainful employment.
(3) A student shall be considered in regular attendance during normal vacation periods if
he or she is in regular attendance in the month immediately preceding and immediately
following the vacation period.
(4) A student shall be considered to be in regular attendance for the month in which he or
she completes or discontinues his or her school or training program.
16. Benefits provided under the State's Lifeline Utility Credit Program shall be excluded.
17. Interest on or appreciation in value of burial funds excluded from consideration as
resources at N.J.A.C. 10:71-4.4(b)9 shall be excluded from income.
18. The first $20.00 per month of income, other than income received as a VA pension
based upon need, shall be excluded. This exclusion shall be applied first to unearned
income, and any remaining amount of exclusion then applied to earned income. In the
determination of countable income of a couple, this $20.00 exclusion is applied to the
combined income of both.
19. Earned income, in the amount of $65.00 per month plus one-half of the remaining sum,
shall be excluded. In the determination of countable income of a couple, this exclusion
applies to the combined earned income of both.
20. In the case of blind persons only, all expenses reasonably attributable to the earning of
income shall be excluded.
21. In the case of blind or otherwise disabled persons, the amount of money which is
needed to achieve an approved plan of self-support shall be excluded.
i. In order for this exclusion to apply, the plan of support must have been approved, in
writing, by the Division of Vocational and Rehabilitation Services or the Commission for the
Blind and Visually Impaired. The plan must also be current.
10:71-5.1 Income; financial eligibility standards
(a) As a condition of eligibility for the Medicaid Only Program, applicants must comply with
the income standards set forth in this subchapter (see N.J.A.C. 10:71-5.6).
(b) Income defined: For the purpose of this program, income shall be defined as receipt, by
the individual, of any property or service which he/she can apply, either directly or by sale or
conversion, to meet his/her basic needs for food, shelter,or clothing. All income, whether in
cash or in-kind, shall be considered in the determination of eligibility, unless such income is
specifically exempt under the provisions of N.J.A.C. 10:71-5.3
1. Availability of income: In order to be considered in the determination of eligibility,
income must be "available." Income shall be considered available to an individual when:
i. With the exception of income from self-employment, the individual actually receives the
income;
ii. With the exception of income from self-employment, the income becomes payable but is
not received by the individual due to his/her preference for voluntary deferment;
iii. Income has been deemed available to the applicant (see N.J.A.C. 10:71-5.5 regarding
the deeming of income);
iv. Net earnings from self-employment have been determined in accordance with N.J.A.C.
10:71-5.4(a)2.
2. Earned income: Earned income shall be defined as payment received by an individual
for services performed as an employee, or the net earnings as the result of selfemployment.
When the individual is both employed as self- employed, earned income shall
consist of gross wages (or salary, etc.) plus any net earnings from self-employment.
3. Unearned income: Unearned income shall be defined as any income which is not
coincident with the provisions of (b)2 above. This definition includes deemed income (see
N.J.A.C. 10:71-5.5).
(c) The grandfather clause: An individual (including an essential person) meeting the
criteria delineated in N.J.A.C. 10:71-4.5(e) may have his/her income eligibility determined in
accordance with the procedures formerly used in New Jersey's OAA, AB, and DA programs
if it is more advantageous (see Financial Assistance Manual, Chapter 300, for regulations in
effect prior to January 1, 1974).
10:71-5.2 Determination of countable income
(a) Countable income shall be determined by adding the applicant's nonexempt unearned
income (less appropriate exclusions) to his/her earned income (less appropriate exclusions).
(b) Procedures regarding the determination of income eligibility shall be as follows:
1. Determination of initial income eligibility shall be based on all earned and unearned
income which has or will be received during the month for which application is made,
beginning with the first day of such month, except that quarterly, semiannual, or annual
payments shall be prorated in accordance with (b)2 below. (See N.J.A.C. 10:71-5.3(a)15 regarding exclusion of student earnings.)
2. The following shall apply to income received other than monthly:
i. Income received weekly shall be multiplied by 4.333 to determine the monthly amount;
biweekly income shall be multiplied by 2.167. (If earned income is irregular, the initial
determination shall be based on the average of the amounts received for any four weeks
within the 10 week period which includes the five weeks immediately before and after the
date of application.)
ii. When income received on a quarterly, semi-annual, or annual basis is of sufficient
amount to affect the individual's eligibility, it shall be prorated as a monthly amount and
entered on the Medicaid Eligibility Worksheet (Form PA-1E) accordingly. (See also N.J.A.C.
10:71-5.4(a)11, regarding lump-sum payments.)
3. The period of income eligibility begins with the month in which application is made and
continues until the scheduled redetermination, or until a change in status or income occurs
which requires an earlier redetermination. (See N.J.A.C. 10:71-8.1(a), regarding
determination of continuing eligibility.)
4. At the time of application, the applicant shall identify any income which he or she
receives periodically (less frequently than once a month) or anticipates receiving prior to the
time of redetermination.
5. In situations where earned or unearned income is received irregularly or in irregular
amounts, redetermination shall be made as frequently as necessary. The individual shall be
advised of his or her responsibility to report significant changes in income. (See N.J.A.C.
10:71-5.3(a)12 regarding exclusion of certain irregular income.)

Tuesday, July 14, 2009

10:71-4.11 Trusts
(a) For purposes of this subchapter, effective June 18, 2001, a trust is any legal instrument,
device, or arrangement which is similar to a trust, in which a grantor transfers property to an
individual or entity with fiduciary obligations (considered to be a trustee for purposes of this
section). The grantor transfers the property with the intention that it be held, managed, or
administered by the trustee for the benefit of the grantor or others. For the purposes of this
chapter, a trust shall include, but not be limited to, escrow accounts, annuities, investment
accounts, and other similar devices managed by an individual or entity with fiduciary
obligations.
(b) The standards set forth in this section shall apply to trusts without regard to:
1. The purposes for which the trust is established;
2. Whether the trustee(s) has discretion or exercises such discretion under the trust;
3. Any restrictions on when or whether distribution can be made from the trust; or
4. Any restrictions on the use of distributions from the trust.
(c) Definitions, for the purposes of this section, shall be as follows:
1. A grantor shall be any individual who creates a trust. This section shall apply only to
situations in which the grantor is:
i. The individual;
ii. The individual's spouse;
iii. A person, including a court or administrative body, with legal authority to act in place of,
or on behalf of, the individual or the individual's spouse; or
iv. A person, including a court or administrative body, acting at the direction or upon the
request of the individual or the individual's spouse.
2. A revocable trust is a trust which can, under State law, be revoked by the grantor. A
trust, which provides that the trust can be only modified or terminated by a court, is
considered to be a revocable trust, since the grantor (or his or her representative) can
petition the court to terminate the trust. Also, a trust that declares itself to be irrevocable, but
which terminates upon conditions relating to the grantor during his or her lifetime, shall be,
for the purposes of this section, considered to be revocable. For example, a trust may
require a trustee to terminate a trust and disburse the funds to the grantor if the grantor
leaves a nursing facility. Such a trust shall be considered to be revocable.
3. An irrevocable trust is a trust which cannot, in any way, be revoked by the grantor.
4. A beneficiary is any individual or individuals designated in the trust instrument as
benefiting in some way from the trust. The term "beneficiary" shall not include the trustee or
any other individual whose benefit consists only of reasonable fees or payments for
managing or administering the trust. The beneficiary can be the grantor, another individual,
or individuals, or any combination of any of these parties.
5. For purposes of this chapter, a payment from a trust shall be any disbursal from the
corpus of the trust or from income generated by the trust which benefits the party receiving
it. A payment may include actual cash, as well as noncash or property disbursements, such
as the right to use or occupy real property.
(d) Individuals to whom the trust provisions apply shall include any individual who
establishes a trust and who is an applicant or beneficiary of Medicaid. An individual shall be
considered to have established a trust if any of his or her assets, regardless of the amount,
were used to form part or all of the corpus of the trust and if any of the parties described as
a grantor in (c)1 above established the trust, other than by will.
1. When the corpus of a trust includes assets of another person or persons not described
in (c)1 above, as well as assets of the individual, the rules apply only to the portion of the
trust attributable to the assets of the individual. Thus, in determining countable income and
resources in the trust for eligibility and post-eligibility purposes, the county board of social
services shall prorate any amounts of income and resources, based on the proportion of the
individual's assets in the trust to those of other persons.
2. When the corpus of a trust includes assets of either an institutionalized spouse as
defined in N.J.A.C. 10:71-4.7(b)3 or a community spouse, this section shall apply to the
portion of the trust attributable to either spouse for the purposes of determining eligibility for
the institutionalized spouse.
(e) Treatment of trusts, for purposes of determining Medicaid eligibility, shall be dependent
on the characteristics of the trust. The look-back period for evaluation of resource transfer
shall be 60 months. The following are the rules for consideration of various kinds of trusts:
1. In the case of a revocable trust:
i. The entire corpus of the trust shall be counted as a resource available to the individual;
ii. Any payments from the trust made to or for the benefit of the individual shall be counted
as income (unless otherwise excludable, see N.J.A.C. 10:71-5.3); and
iii. Any payments from the trust which are not made to or for the benefit of the individual
shall be considered assets disposed of for less than fair market value (see N.J.A.C. 10:71-
4.10).
2. In an irrevocable trust from which payment can be made under the terms of the trust to
or for the benefit of the individual from all or a portion of the trust, the following shall apply to
that trust or that portion of the trust:
i. Payments from income or from the corpus made to or for the benefit of the individual
shall be treated as income to the individual unless otherwise excludable (see N.J.A.C.
10:71-5.3);
ii. Income on the corpus of the trust which could be paid to or for the benefit of the
individual shall be counted as a resource available to the individual;
iii. The portion of the corpus that could be paid to or for the benefit of the individual shall
be treated as a resource available to the individual; and
iv. Payments from income or from the corpus that are made, but not to or for the benefit of
the individual, shall be treated as a transfer of assets for less than fair market value (see
N.J.A.C. 10:71-4.10).
3. In the case of an irrevocable trust from which payments from all or a portion of the trust
cannot, under any circumstances, be made to or for the benefit of the individual, all of the
trust, or any such portion or income thereof, shall be treated as a transfer of assets for less
than fair market value (see N.J.A.C. 10:71-4.10).
i. In treating these portions as a transfer of assets, the date of transfer shall be considered
to be the date the trust was established, or, if later, the date on which the right of payment to
the individual was foreclosed.
ii. For transfer of assets purposes, in determining the value of the portion of the trust which
cannot be paid to the individual, amounts that have been paid, for whatever purpose, shall
not be subtracted from the value of the trust on the date the trust was created or, if later, the
date that payment to the individual was foreclosed. The value of the transferred amount
shall be no less than the value on the date the trust is established or on the date that
payment is foreclosed. If additional funds are added to this portion of the trust, those funds
shall be treated as a new transfer of assets or less than fair market value.
4. Payments made from a revocable or irrevocable trust to or on behalf of the individual
shall include payments of any sort, including an amount from the corpus or income
produced by the corpus, paid to another person or entity such that the individual derives some benefit from the payment. For example, such payments may include purchase of
clothing or other items, such as a radio or television, for the individual. Such payments may
also include payment for services the individual may require, or care, whether medical or
personal, that the individual may need. Payments to maintain a home shall also be
considered payments for the benefit of the individual.
i. When a payment to or for the benefit of the individual is made which would not be
considered income in the eligibility process, then the payment shall not be counted as
income to the individual under this section. For example, payments made on behalf of an
individual for medical care are not counted in determining income eligibility for Medicaid,
and are therefore not counted as income under these trust provisions.
5. In determining whether payments can or cannot be made from a trust to or for an
individual, the county board of social services shall take into account any restrictions on
payments, such as use restrictions, exculpatory clauses, or limits on trustee discretion that
may be included in the trust. Any amount in a trust for which payment can be made, no
matter how unlikely the circumstance of payment might be or how distant in the future, shall
be considered a payment that can be made under some circumstances.
i. For example, if an irrevocable trust provides that the trustee can disburse only $1,000 to
or for the individual out of a $20,000 trust, only the $1,000 is treated as a payment that
could be made. The remaining $19,000 is treated as an amount which cannot, under any
circumstances, be paid to or for the benefit of the individual and may be subject to a transfer
penalty. On the other hand, if a trust contains $50,000 that the trustee can pay to the
grantor only in the event that the grantor needs, for example, a heart transplant, this full
amount is considered as payment that could be made under some circumstances, even
though the likelihood of payment is remote. Similarly, if a payment cannot be made until
some point in the distant future, it is still payment that can be made under some
circumstances and the funds are included.
6. Placement of excluded assets in trust, with the exception of a home, shall not result in a
penalty of ineligibility because the transferred asset is not an asset for transfer purposes.
However, a home, whether excluded or not, when transferred into a trust shall be presumed
to have been transferred for the purposes of qualifying for Medicaid.
(f) Transfer to a trust (or similar instrument, including an annuitized trust) for the sole benefit
of a community spouse shall be treated in accordance with the provisions of (e) above. If the
trust is established by either member of the couple (using at least some of the couple's
assets), the trust shall be reviewed by the county board of social services for availability of
resources, in accordance with (e) above. If the payment from such a trust shall be
considered an available resource to either spouse, the trust shall be included as a countable
resource in determining Medicaid eligibility for the institutionalized spouse pursuant to
N.J.A.C. 10:71-4.8.
(g) The trust provisions shall not apply to the following trusts so long as the trust document
meets all the requirements set forth in this chapter:
1. A special needs trust, that is, a trust containing the assets of a disabled individual and
which is established prior to the time the disabled individual reaches the age of 65 and
which is established for the sole benefit of the disabled individual by a parent, grandparent, legal guardian of the disabled individual, or a court, may be excluded from the rules
regarding the treatment of a trust. To qualify for the exclusion, the trust shall contain the
following provisions:
i. The trust shall be identified as an OBRA '93 trust established pursuant to 42 U.S.C. §
1396p(d)(4)(A).
(1) The trust shall not contain any provisions intended to give anyone or a Court the
power to alter the form of the trust from an individual trust to a "pooled trust" under 42
U.S.C. § 1396p(d)(4)(C). Similarly, there shall be no provisions permitting the trust to be
altered for any other reasons.
ii. The trust shall specifically state that the trust is for the sole benefit of the trust
beneficiary.
(1) Only trusts which are intended for the sole benefit of the disabled individual are
special needs trusts. Any trust which provides benefits to other persons shall not be
considered an individual special needs trust. If expenditures are made from the trust which
shall also incidentally provide an ongoing and continuing benefit to other persons, those
other persons who also benefit shall contribute a pro-rata share to the trust for the
subsequent expenses associated with their use of the acquisition,
(A) For example, if the trust acquires housing for the benefit of the trust beneficiary, and
other family members also live in that house, the trust document shall provide that the
trustee shall require and collect a pro rata contribution for the expenses of uses incurred,
and shall return such contribution to the trust. Such collections shall be reflected in the
annual required trust accounting. Any property acquired by the trust shall be titled solely in
the trust's name. In addition, unless the trust is given equity in any improvements to real
property, the trust shall not pay for upkeep, property taxes or other expenses associated
with the property or any additions to the existing property.
iii. The trust shall specifically state that its purpose is to permit the use of trust assets to
supplement, and not to supplant, impair or diminish, any benefits or assistance of any
Federal, State or other governmental entity for which the beneficiary may otherwise be
eligible or which the beneficiary may be receiving.
(1) If the trust provides for food, clothing or shelter, such expenditures shall be considered
income under Social Security and Medicaid eligibility rules.
(2) It may be permissible for the trust to acquire property which is used to provide shelter
for the trust beneficiary, but the trustee shall take care to ensure that such acquisitions do
not create unintended problems (such as disqualifying someone for Federal benefits).
Additionally, parents shall not be relieved of their duty to support their minor child, if they are
capable of doing so. A minor's funds in a trust shall not be expended on routine support,
unless the parents' income is insufficient for these expenses. N.J.S.A. 3B:12-43.
iv. The trust shall specifically state the age of the trust beneficiary, that the trust
beneficiary is disabled within the definition of 42 U.S.C. § 1382c(a)(3), and whether the
trust beneficiary is competent at the time the trust is established.
(1) If the trust beneficiary is a minor, the trustee shall execute a bond to protect the child's
funds or shall get a court's permission not to do so.
(2) If there is some question about the trust beneficiary's disability, independent proof
may be required.
(3) If the trust beneficiary is a minor, the trust shall state whether the trust beneficiary is expected to be competent at his or her majority.
v. The trust shall specifically identify, in an attached schedule, the source of the initial trust
property and all assets of the trust. If the trust is being established with funds from the
proceeds of a settlement or judgement subsequent to the bringing of a legal cause of action,
Medicaid's claim for its expenditures that are related to the cause of action shall be repaid
immediately upon the receipt of such proceeds and prior to the establishment of the trust.
(1) Subsequent additions made to the trust corpus shall be reported to the appropriate
eligibility determination agency. Subsequent additions to the trust (other than interest on the
corpus) shall cease when the trust beneficiary reaches age 65, or shall be subject to
transfer provisions.
(2) If subsequent additions are to be made to the trust corpus with funds not belonging to
the trust beneficiary, it shall be understood that those funds are a gift to the trust beneficiary
and cannot be reclaimed by the donor.
vi. If the trust makes provisions which are intended to limit invasion by creditors or to
insulate the trust from liens or encumbrances, the trust shall state that such provisions are
not intended to limit the State's right to reimbursement or to recoup incorrectly paid benefits.
vii. The special needs trust shall state that it is established by a parent, grandparent, or
legal guardian of the trust beneficiary, or by a court.
(1) The trust shall identify the grantor/settlor by name and as the parent, grandparent,
legal guardian, or court. A court can be named as the grantor, if the trust is established
pursuant to a settlement of a case before it, or if the court is otherwise involved in the
creation of the trust.
viii. The trust shall specifically state that it is irrevocable. Neither the grantor, the
trustee(s), nor the beneficiary shall have any right or power, whether alone or in conjunction
with others, in whatever capacity, to alter, amend, revoke, or terminate the trust or any of its
terms or to designate the persons who shall possess or enjoy the trust estate during his/her
lifetime.
(1) Notwithstanding the irrevocability provision above, the trust can state that "the trust
shall be irrevocable except that the trust may be amended as necessary to conform with the
requirements of 42 U.S.C. 1396p and/or state law."
ix. The trustee shall be specifically identified by name and address. The trust shall state
that the original trust beneficiary cannot be the trustee. The trust shall make provisions for
naming a successor trustee in the event that any trustee is unable or unwilling to serve. The
Bureau of Administrative Control, Division of Medical Assistance and Health Services, as
well as the trust beneficiary and/or guardian, shall be given prior notice if there is a change
in the trustee.
x. The trust shall specifically state that the trustee shall fully comply with all State laws,
including the Prudent Investor Act, N.J.S.A. 3B:20- 11.1 et seq. The trust shall provide that
the trustee cannot take any actions not authorized by, or without regard to, State laws. If the
trust gives the trustee authorization or power not provided for in the Prudent Investor Act, an
accompanying letter shall provide an explanation for each such authorization or power.
xi. The trust shall specifically state that the trustee shall be compensated only as provided
by law (N.J.S.A. 3B:18-1 et seq.) If the trust identifies a guardian, the trust shall specifically
identify him or her by name. A guardian shall be compensated only as provided by law. The
parent of a minor child shall not be compensated from the trust as the child's guardian. (1) If an adult beneficiary is not competent, the trust shall specifically state that the
"guardianship protections for the incompetent's funds which are required by New Jersey law
and Court rules are incorporated by reference into this trust." The trustee shall either file a
bond or shall get the Court's permission not to do so.
xii. The trust shall specifically state that, upon the death of the primary beneficiary, the
State will be notified, and shall be paid all amounts remaining in the trust up to the total
value of all medical assistance paid on behalf of the beneficiary. The trust shall comply fully
with this obligation under the statute to first repay the State, without requiring the State to
take any action except to establish the amount to be repaid. Repayment shall be made to
the Treasurer, State of New Jersey, and shall be sent to the Division of Medical Assistance
and Health Services, to the attention of the Bureau of Administrative Control, PO Box 712,
Trenton, New Jersey 08625-0712, or to any successor agency.
xiii. If there is a provision for repayment of other assistance programs, the trust shall
specifically state that the Medicaid Program shall be repaid prior to making repayment to
any other assistance programs.
xiv. The trust shall specifically state that if the beneficiary has received Medicaid benefits
in more than one state, each state that provided Medicaid benefits shall be repaid. If there is
an insufficient amount left to cover all benefits paid, then each state shall be paid its
proportionate share of the amount left in the trust, based upon the amount of support
provided to the beneficiary.
xv. No provisions in the trust shall permit the estate's representative to first repay other
persons or creditors at the death of the beneficiary. Only what remains in the trust after the
repayments specified in (g)1xii, xiii and xiv above have been made shall be considered
available for other expenses or beneficiaries of the estate. The trust may provide for a
prepaid burial plan, but shall not state that it will pay for reasonable burial expenses after
the death of the trust beneficiary.
xvi. The trust shall specify that a formal or informal accounting of all expenditures made by
the trust shall be submitted to the appropriate eligibility determination agency on an annual
basis.
xvii. The State shall be given advance notice of any expenditure in excess of $5,000, and
of any amount which would substantially deplete the principal of the trust. Notice shall be
given to the Division of Medical Assistance and Health Services, Bureau of Administrative
Control, PO Box 712, Mail Code 6, Trenton, New Jersey 08625-0712, or any successor
agency, 45 days prior to the expenditures.
xviii. New Jersey rules and laws do not permit a trust to create a will for an incompetent or
a minor. The money creating the trust, any additions and/or interest accumulated, cannot be
left to other parties, but shall pass by intestacy. The trust shall not create other trusts within
it.
2. A pooled trust is a special needs trust, containing the assets of a disabled individual,
which meets the following conditions:
i. The trust shall be established and managed by a non-profit association;
ii. A separate account shall be maintained for each beneficiary of the trust, but for
purposes of investment and management of the funds, the trust may pool the funds from
those accounts;
iii. Accounts in the trust shall be established solely for the benefit of the disabled individual by the individual, by a parent, grandparent, or legal guardian of the individual, or by a court;
iv. To the extent that amounts remaining in the beneficiary's account upon the death of the
beneficiary are not retained by the trust, the trust shall pay to the State of New Jersey the
amount remaining in the account, up to an amount equal to the total amount of medical
assistance paid under Title XIX of the Social Security Act on behalf of the individual. To
meet this requirement, the trust shall include a provision specifically providing for such
payment; and
v. Funds of an individual 65 or older which are transferred to a pooled trust shall be
subject to the transfer penalty provisions contained in N.J.A.C. 10:71-4.7.
(h) Title XIX of the Social Security Act (42 U.S.C. § 1917(d)(4)(B)) provides for an
exemption from the trust provisions for qualified income trusts (also known as Miller trusts).
Special provisions for this form of trust apply, under the law, only in those states which do
not provide medically needy coverage for nursing facility services. Because New Jersey
does cover services in nursing facilities under the medically needy component of the
Medicaid program, the establishment of a qualified income trust shall be presumed to be an
asset transfer for the purposes of qualifying for Medicaid. This presumption shall apply
whether the individual is seeking nursing facility services or home and community based
services under one of the waiver programs.
(i) Upon the denial of eligibility or the termination of long-term care level services due to the
application of these trust provisions, the county board of social services shall notify the
applicant/beneficiary of his or her right to request an undue hardship exception. An
applicant/beneficiary may apply for an exception to these trust provisions if he or she can
show that the transfer will cause an undue hardship to him or herself. The
applicant/beneficiary shall provide sufficient documentation to support the request for an
undue hardship waiver to the county board of social services within 20 days of notification of
the denial of eligibility or termination of benefits due to these trust provisions.
1. For the purposes of this chapter, undue hardship shall be considered to exist when:
i. The application of the trust provisions would deprive the applicant/beneficiary of medical
care such that his or her health or his or her life would be endangered. Undue hardship may
also exist when application of the trust provisions would deprive the individual of food,
clothing, shelter, or other necessities of life; and
ii. The applicant/beneficiary can irrefutably demonstrate the assets placed in trust are
beyond his or her control and that the asset cannot be recovered. The applicant/beneficiary
shall demonstrate that he or she made good faith efforts, including exhaustion of remedies
available at law or in equity, to recover the assets placed in trust.
2. In the event that a waiver of undue hardship is denied, neither the Department of
Human Services, the Department of Health and Senior Services, nor the county boards of
social services shall have any obligation to take any action to assure that payment of
services is provided during the penalty period.
3. If the request for undue hardship consideration is denied by the county board of social
services, the county board of social services shall notify the applicant of the denial and that
the applicant may request a fair hearing in accordance with the provisions of N.J.A.C. 10:49-
10.