In general, Medicaid rules impose periods of Medicaid ineligibility (“penalty periods”) when a Medicaid applicant makes gifts of assets in an attempt to qualify for Medicaid. If a Medicaid applicant gifts assets within the 60-month “look-back” period, the applicant may be subject to a Medicaid penalty period, based on the value of the gift.

Notably, however, in some situations, a Medicaid applicant can give away his or her home and not receive a Medicaid penalty, thereby preserving this important asset for the applicant’s loved ones:

To The “Community Spouse” 

Under current Medicaid law, the applicant may give the home to his/her non-institutionalized (“community”) spouse without triggering a Medicaid penalty. By making the gift, the home will escape the imposition of a “Medicaid lien” under legislation that permits the State of New Jersey to recover payments made on behalf of a Medicaid recipient on property owned by the Medicaid recipient at the time of death.

To The “Caregiver Child”

Current Medicaid law permits an applicant to gift his or her home to a “caregiver child” without triggering a Medicaid penalty. To qualify as a “caregiver child,” the applicant must require a high level of special care and attention, and must prove that his or her child lived in the home with the applicant and provided a level of care sufficient to allow the applicant to remain at home, rather than in a nursing home, for a period of more than two years. By making the gift, the home will escape the imposition of a “Medicaid lien,” as described above.

To A Disabled Child

Medicaid law also currently permits the applicant to gift his or her home to a child who is under 21, blind or disabled. As with the other gifting situations described above, the home will escape a Medicaid lien.

If you are considering gifting your home and would like to see whether you would qualify for one of these important gift exemptions, contact a Certified Elder Law Attorney.

For additional information concerning Medicaid applications and appeals, visit: