Family members that anticipate that a parent may someday need nursing home care should consider long-term care planning and the need to apply for Medicaid to pay for that care. Medicaid rules will normally prevent someone who has significant assets (more than $15,750 in 2020) from qualifying for benefits to pay for a nursing home until they “spend-down” those assets.
Transfers of cash or property made within 5 years before applying for Medicaid are subject to “look-back” and may cause a penalty period in which the applicant will not receive benefits. However, there are exceptions for certain transfers. One of those exceptions is the child caretaker exception. The child caretaker (or child caregiver) exception allows an elderly parent to transfer ownership of their home, either before or after they become Medicaid eligible, to an adult child who provides care for them and lives in the home with them.
This exception has benefits not only for elderly parents and their adult children, but also for New York State. The parents get to stay in their own home and have care provided by their child. Medicaid allows for this and will pay the adult child for the care that they provide to the parent under the Consumer-Directed Personal Assistance Program (CDPAP). Adult children get to make sure their parent is cared for at home for as long as possible, while being compensated. Additionally, after living with and providing care for the parent for at least two years, the house may be transferred to the caregiver child without penalty. Finally, New York State benefits by avoiding the need to provide for nursing home care, which is generally more expensive than care at home.
This exception is obviously good news for families. However, Medicaid will strictly apply the conditions necessary to qualify for the child caretaker exception. Those conditions include:
- The adult child must live with the parent in the parent’s home for two years or more before the parent is admitted to a nursing home.
- Child – must be biological or adopted child. No other relative will qualify.
- Home – must be primary residence of parent. No other property will qualify.
- The adult child must provide care to the parent.
- Care – must be more than housekeeping and should be documented by a signed Caregiver Agreement.
- The care provided must be the difference between being able to remain home rather than going into a nursing facility.
- Physician Statement – Medicaid will require that the primary care physician for the parent complete a form documenting the level of care provided by the child.
Navigating Medicaid rules and potential exceptions requires specialized knowledge. At Benjamin Katz, Esq. P.C. we have the knowledge, skill and experience to guide you through the process.