The New Jersey Medicaid Look-Back Period Is Often Misunderstood

By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, NJ Medicaid Attorney

Clients are forever asking me if they have to wait five years to apply for NJ Medicaid benefits for a parent’s nursing home care if a gift(s) has been made. In one case mom had entered a nursing home the previous month. Three years ago she transferred a $100,000 brokerage account to a child, now she’s effectively broke. The child is her power of attorney, and the nursing home told the family that mom has to wait two more years to apply since the five-year look-back period has not elapsed. Are they correct?

In this case the nursing home is correct as to the five (5) year look back rule but Medicaid rules are so complex that even many people working in the field don’t fully understand them, especially the rules relating to gifts and uncompensated transfers.

You can however make gifts, even within the five (5) years prior to filing an application for Medicaid. New Jersey will total up all gifts and then divide this uncompensated amount by the Medicaid divisor, currently $332 per day or around $10,000 per month. The resulting number is how many months mom must wait until benefits begin (assuming she is qualified in all other respects). Based on what I was given, this would work out to $100,000/$10,000 to a 10 month penalty.

If the family can’t pay the nursing home bill for the next 10 months, then they will need to return the gift or discuss another strategy called a Gift/SPIA which will allow the family to save at least a portion of the $100,000.

To discuss your NJ Medicaid matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at  Please ask us about our video conferencing consultations if you are unable to come to our office.