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,
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Tuesday, July 14, 2009

10:71-4.1 Financial eligibility standards; resources
(a) The resources criteria and eligibility standards of this section apply to all applicants and
beneficiaries.
(b) Resources defined: For the purpose of this program a resource shall be defined as any
real or personal property which is owned by the applicant (or by those persons whose
resources are deemed available to him/her, as described in N.J.A.C. 10:71-4.6) and which
could be converted to cash to be used for his/her support and maintenance. Both liquid and
nonliquid resources shall be considered in the determination of eligibility, unless such
resources are specifically excluded under the provisions of N.J.A.C. 10:71-4.4(b).
(c) Availability of resources: In order to be considered in the determination of eligibility, a
resource must be "available." A resource shall be considered available to an individual
when:
1. The person has the right, authority, or power to liquidate real or personal property, or
his or her share of it:
2. Resources have been deemed available to the applicant (see N.J.A.C. 10:71-4.6
regarding deeming of resources); or
3. Resources arising from a third-party claim or action are considered available from the
date of receipt by the applicant/beneficiaries, his or her legal representative or other
individual acting on his or her legal behalf in accordance with the following definition and
provisions.
i. Definition of "availability of resources in third-party situations": In third-party situations in
which applicants/beneficiaries have brought an action or made a claim against a third party
who is or may be liable for payment of medical expenses related to the cause of the action
or claim, funds are considered available or countable at the moment of receipt by the
applicant/beneficiary, his or her legal representative, guardian, relative or any person acting
on the applicant's/beneficiary's behalf. Such funds should be considered available or
countable at the earliest date of receipt by any of the aforementioned entities.
(1) In determining resource eligibility in accordance with N.J.A.C. 10:71-4.5(a), those
funds actually available to the applicant/beneficiary or any person acting on his or her behalf
as of the first day of the month subsequent to the month of receipt shall be considered a
countable resource, unless otherwise excluded (see N.J.A.C. 10:71-4.4).
(2) If a bona fide lien or judgment exists against such funds, making all or some portion of
the funds inaccessible to the applicant/beneficiary, CBOSSs shall deduct the encumbrances
and consider the remaining amount as a countable resource.
(3) If between the date of receipt of such moneys and the first day of the subsequent
month the applicant/beneficiary pays outstanding medical expenses and/or other expenses,
the CBOSS shall consider only the funds remaining after such payment as a countable
resource.
(d) Evaluation of resources: The value of a resource shall be defined as the price that the resource can reasonably be expected to sell for on the open market in the particular
geographic area minus any encumbrances (that is, its equity value).
1. Real property:
i. Sole ownership: When the eligible individual is sole owner and has the right to dispose
of the property, the total equity value (see (d)1iv below) shall be counted toward the
resource maximum.
ii. Joint ownership or ownership in common: Under joint ownership or ownership in
common, the equity value of the property shall be divided by the number of owners and the
eligible individual's share counted toward the resource maximum.
iii. Ownership by the entirety: Ownership by the entirety (or tenancy by the entirety) refers
to property owned by a husband and wife whereby each member has ownership interest in
the whole property which is indivisible. When a married couple (either one or both are
eligible) is living together, the total equity value of all nonexempt property shall be counted
toward the resource maximum. The same policy shall apply to an eligible couple who have
been separated less than six months. If the eligible couple has been separated for six
months or more, one half of the value represents a resource to each individual. If one
spouse is institutionalized and the other spouse resides in the community, the extent to
which either spouse has ownership of the property shall be included pursuant to N.J.A.C.
10:71-4.8.
(1) When an eligible individual and an ineligible spouse own nonexempt property by the
entirety and the couple is separated for a full calendar month, the cooperation of both
owners is necessary to ascertain resource value. If the ineligible owner expresses
willingness to dispose of the property, then its value is divided by the number of owners. If
there is no such willingness by the ineligible owner, then no value may be assigned to the
property. (See also N.J.A.C. 10:71-4.4(b)6 regarding situations in which a co-owner refuses
to liquidate.)
iv. Equity value: The equity value of real property is the tax assessed value of the
property multiplied by the reciprocal of the assessment ratio as recorded in the most
recently issued State Table of Equalized Valuations, less encumbrance, if any. The Table is
available from the State of New Jersey, Department of the Treasury, Trenton, New Jersey
08625.
2. Savings and checking accounts: When a savings or checking account is held by the
eligible individual with other parties, all funds in the account are resources to the individual
so long as he or she has unrestricted access to the funds (that is, an "or" account)
regardless of their source. When the individual's access to the account is restricted (that is,
an "and" account), the CBOSS shall consider a pro rata share of the account toward the
appropriate resource maximum, unless the client and the other owner demonstrate that
actual ownership of the funds is in a different proportion. If it can be demonstrated that the
funds are totally inaccessible to the client, such funds shall not be counted toward the
resource maximum. Any question concerning access to funds should be verified through the
financial institution holding the account.
3. Verification of value: The CBOSS shall verify the equity value of resources through
appropriate and credible sources. Additionally, the CBOSS shall evaluate applicant's past
circumstances and present living standards in order to ascertain the existence of resources
which may not have been reported. If the applicant's resource statements are questionable, or there is reason to believe the identification of resources is incomplete, the CBOSS shall
verify the applicant's resource statements through one or more third parties.
i. Responsibility of applicant: If the third party contact is required in accordance with the
provisions above, the applicant shall cooperate fully with the verification process. If
necessary, the applicant shall provide written authorization allowing the CBOSS to secure
the appropriate information.
(e) Resource eligibility: Resource eligibility is determined as of the first moment of the first
day of each month. If an individual or couple is resource ineligible as of the first moment of
the first day of the month, subsequent changes within that month in the amount of countable
resources will not affect the original determination of ineligibility. If resource eligibility is
established as of the first moment of the first day of the month, resource eligibility is
established for the entire month regardless of any increase in the amount of countable
resources.
1. This policy applies equally to individuals and couples in the month of application.
Regardless of the date of application, resource eligibility is determined as of the first
moment of the first day of that month.
2. If, prior to the first moment of the first day of the month, the applicant or beneficiary has
drawn a check (or equivalent instrument) on a checking or similar account, the amount of
such check shall reduce the value of the account. The value of such accounts shall not be
reduced by any unpaid obligations for which funds have not already been committed by the
drafting of a check.
i. When checks have been drawn on an account, the CBOSS shall review the appropriate
account registers or check stubs to ascertain the actual balance as of the first moment of
the first day of the month. Full documentation of such circumstances is required.
(f) 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.
1. In order for the cash reward to continue to be excluded, the funds shall be separately
identifiable (that is, not commingles with other funds or assets), but held in a separate
account. Any increase in the value of the excluded cash reward shall also be excluded.
10:71-4.2 Countable resources
(a) Any resource which is not specifically excludable under the provisions of N.J.A.C.
10:71-4.4 shall be considered a countable resource for the purpose of determining Medicaid
Only eligibility.
1. No portion of a cash reward offered by the Division of an individual 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 resources for financial eligibility purposes, if
the resource is maintained in a separate account, in accordance with N.J.A.C. 10:71 –
4.4(b).
(b) Verification of resources: If verification is required in accordance with the provisions of
N.J.A.C. 10:71-4.1(d)3, the CBOSS shall proceed in the following manner: establish whether or not real property is producing income consistent with its current market
value (see N.J.A.C. 10:71-4.4(b)5), inquiry shall be made of local real estate brokers, tax
assessors, or other persons knowledgeable of the prevailing rate of return on real property
in the community.
2. Nonexcludable household goods and/or personal effects: If the CBOSS determines that
certain household goods and/or personal effects are not excludable (see N.J.A.C. 10:71-
4.4), inquiry shall be made of one or more local merchants who deal in used household
goods or personal goods in order to determine the current market value of the resource.
3. The CBOSS shall verify the existence or nonexistence of any cash, savings of checking
accounts, time or demand deposits, stocks, bonds, notes receivable, or any other financial
instrument or interest. Verification shall be accomplished through contact with financial
institutions, such as banks, credit unions, brokerage firms, and savings and loan
associations. Minimally, the CBOSS shall contact those financial institutions in close
proximity to the residence of the applicant or the applicant's relatives and those institutions
which currently provide or previously provided services to the applicant.
(c) Documentation of verification: Any verification which occurs in connection with the
determination or evaluation of resources shall be fully documented in the case record.