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Elder Law Perspectives Updates and Commentary on Developments in Elder Law

New Jersey Medicaid Qualification

Posted in Medicaid, Social Security, Veteran's Benefits

To qualify for Medicaid in New Jersey, an applicant needs to prove both financial need and medical need.  This article will focus on the financial need component of qualifying for benefits.  With some exceptions, in order to qualify, an individual cannot have assets in excess of $2,000 and income in excess of $2,094 per month.  This article explains how these amounts are calculated and what types of assets and income are included and excluded in this calculation.

Treatment of Income

Most types of income are included in the $2,094.00 income limit for Medicaid qualification purposes, for example:

  • Social Security
  • Civil Service
  • Pension, including Veterans Administration (VA) pension
  • Annuity payments
  • Retirement accounts
  • Interest
  • Dividends
  • Alimony
  • Rental income
  • Life insurance proceeds

However, there are some limited exclusions from income, including VA allowance for Aid and Attendance or Housebound Allowance (but VA pension is included as income).

Treatment of Assets

In order to qualify for Medicaid, an applicant can have no more than $2,000.00 worth of countable assets.  If married, the applicant’s spouse can have up to an additional $113,640.00 of countable assets, unless increased by a judge’s order.  Available assets are counted toward these limits and excluded (or exempt) assets are not, as discussed below.

Available Assets (Counted for Medicaid Qualification)

The following assets are available for Medicaid qualification purposes and counted in the asset limit, whether owned by the applicant or the applicant’s spouse, or owned by either of them jointly with someone else:

  • Checking accounts
  • Savings accounts
  • Brokerage accounts
  • Certificates of deposit
  • Stocks and bonds
  • U.S. savings bonds
  • Primary residence if applicant does NOT intend to return home (note that if equity is greater than $786,000.00, then applicant does not
  • qualify for Medicaid)
  • Real property, other than primary residence (with certain exceptions)
  • Limited partnerships
  • Cash value of life insurance if the total face value of all such policies is greater than $1,500.00
  • Vehicles other than the one excluded vehicle
  • Boats, unless it is your primary residence
  • Recreational vehicles, unless it is your primary residence or your only vehicle
  • Loans payable to applicant
  • Deferred annuities and some immediate annuities, depending on how they are structured and the date purchased
  • Retirement funds, generally (please contact us for more information)

Excluded Assets (Not Counted for Medicaid Qualification)

The following assets are excluded for Medicaid qualification purposes and not counted in the asset limit:

  • Primary residence if equity is less than or equal to $786,000.00 and applicant intends to return home
  • Primary residence, regardless of equity, if spouse, child under age 21, or blind or disabled child of any age lives there
  • One vehicle (please contact us for more information)
  • Life insurance with no cash value
  • Life insurance with cash value if the total face value of all such policies is less than or equal to $1,500.00
  • Irrevocable burial contracts
  • $1,500.00 designated for burial expenses (revocable burial contracts, burial savings accounts, or life insurance policies)
  • One burial plot per family member
  • $2,000 worth of household goods plus a wedding ring and engagement ring

There are a number of strategies that can be used to qualify a person for Medicaid.  These strategies can include the use of an irrevocable trust for gifting purposes.