The New Jersey Department of Military and Veterans Affairs owns and operates three nursing homes in New Jersey, referred to as the New Jersey Veterans Memorial Homes (“NJ Veterans Nursing Homes”). The three NJ Veterans Nursing Homes are located in Paramus, Edison and Vineland. These are state facilities, governed by the state regulations found in N.J.A.C. 5A:5-1 et seq., and are not part of the network of facilities owned by the U.S. Department of Veterans Affairs.

Eligibility Requirements

A. Veteran Status and New Jersey Residency.

Admission to one of the NJ Veterans Nursing Homes is limited to veterans, spouses, surviving spouses, and Gold Star parents and widows. There is an order of priority for applicants set forth in N.J.A.C. 5A:5-2.2. Preference is also given to applicants who resided in New Jersey for at least two years immediately prior to the date of application.

B. Financial Eligibility.

1. Assets. A single applicant cannot have more than $20,000, and a married couple cannot have more than $80,000, in “accountable assets”. “Accountable assets” is defined as “any item that has a determined value and is owned solely by the applicant or spouse, owned jointly with the applicant’s spouse, jointly with others or jointly by the spouse and others, and must be spent down or liquidated and used toward payment of the resident’s care and maintenance… .” N.J.A.C. 5A:5-2.1.
2. Income. The resident’s fee is 80% of net income, not to exceed the “Established Rate.” The Adjutant General determines an “Established Rate” each year. The individual pays a portion of the cost of care based on their monthly income and ability to pay. N.J.A.C. 5A:5-5.2 and 5A:5-5.3.  Allowable deductions include a personal needs allowance ($110 per month), health insurance premiums, contribution toward a prepaid burial account, court-ordered payments and other expenses. N.J.A.C. 5A:5-5.2. In addition, 12% of the remaining 20% of the resident’s net income (maximum $20 per month) is set aside in a welfare fund at the institution. The income of a veteran’s spouse (called the “community spouse”) is countable and aggregated in determining the facility fee. N.J.A.C. 5A:5-5.3(d). The community spouse is permitted to deduct certain expenses from income. For example, the community spouse receives a flat $1,000 exemption for food, transportation, clothing, telephone and home maintenance. N.J.A.C. 5A:5-5.3(e).  In addition, deductions requiring verification are permitted for rent, first mortgage payments, real estate taxes and insurance, heat and electric, water and sewer, life insurance for burial accounts, and other extraordinary expenses. N.J.A.C. 5A:5-5.3(e).
3. Spend-Down. If assets exceed the limits for accountable assets, the resident must pay privately until the excess assets are spent down on care until they reach the acceptable level of accountable assets.

Major Differences Between NJ Veterans Nursing Home Eligibility And Medicaid Eligibility

1. Look-back Period – Under the Medicaid rules, there is a 60 month, or 5-year, look-back for transfers of assets. This means that any transfer of resources for less than fair market value in the 5-year period prior to the month of the Medicaid application must be reported at the time the Medicaid application is filed and will result in the imposition of a penalty. In contrast, there is a 36 month look-back period under the rules governing NJ Veterans Nursing Homes. Transfers made beyond the look-back period under both programs are not penalized.
2. Penalty Period – Under the Medicaid rules, transfers for less than fair market value made during the look-back period result in the imposition of a penalty, or a period of ineligibility for Medicaid. To calculate the penalty, divide the amount transferred by the average monthly cost of nursing home care in New Jersey, currently $7,282. In contrast, under the Veterans rules if an asset is transferred during the 36 month look-back period, the transferred assets are considered accountable assets and must be spent down on the resident’s care. N.J.A.C. 5A:5-2.1.
3. IRAs and Annuities – These are countable assets under the Medicaid rules and must be spent down before eligibility can be achieved. Under the Veterans rules, however, any payments from these assets are treated as income, but there is no requirement that the assets be spent down in order to achieve benefit eligibility.
4. Primary residence and household effects – Under Medicaid rules, the primary residence and all household effects therein are exempt assets only if the community spouse resides in the home. If not, the home and all household effects are countable, must be sold and the proceeds used to pay care costs. Under the Veterans rules, however, the primary residence and household effects are non-accountable assets even if the community spouse resides elsewhere.
5. Estate Recovery and Liens – Under Medicaid law, following the death of the Medicaid recipient a state must attempt to recover from his or her estate whatever benefits it paid for the recipient’s care. However, no recovery can take place until the death of the recipient’s spouse, or as long as there is a child of the deceased who is under age 21 or who is blind or disabled. Under the Veterans rules, there is no estate recovery.

Conclusion

Approximately 60% of the population age 65 or over will require some form of long-term care. Some will require institutionalization for relatively short periods of time. However, a significant percentage will remain in a nursing home for many years. The average stay in a nursing home is 2.9 years, but many stay much longer. The cost of a private nursing home in New Jersey today is approximately $100,000 – $120,000 per year. Fortunately, the cost of a NJ Veterans Nursing Home is usually significantly less than the cost of a private nursing home. There are also other advantages. Thus, for those who qualify, a NJ Veterans Nursing Home may be a viable residential option, and a better choice.

The regulation governing the computation of a resident’s fee at a  New Jersey Veterans Memorial Nursing Home, N.J.A.C. 5A:5-5.3, is attached hereto: VA Formula For Maintenance Fee Computation