Importance of Reviewing Checking Records as the Date of Eligibility Approaches

Post 4 discusses significance of payment of debts and expenses. This post is to serve as a clarification of some of the points made.

1. The general rule, of course, is that resource eligibility is determined as of the first moment of the first day of each month – N.J.A.C. 10:71-4.1(e). For example, if June eligibility is anticipated, the amount reflected in the account on June 1 is not the proper amount. That is, you are to look to the first moment of the first day of each month. The June 1 balance is not the first moment. In actuality, the balance as of the close of business on May 31 is the proper amount. Do not fall into this trap.

2. Another key rule is that subsequent changes after eligibility during the month do not effect the original determination of eligibility – N.J.A.C. 10:71-4.1(e). This is discussed in the context that the funds are used for appropriate purposes prior to the beginning of the first moment of the first day of the subsequent month. Post 4 discusses possible approaches to reduction of the amount. However, it is important to use the funds for an excludable resource such as a prepaid revocable funeral trust or valid expenses of the home if the individual happens to be married. Very often in this circumstance I have seen clients use the funds for purposes that may be subject to question such as checks drawn to the child or checks drawn to cash. It is important to be conservative in this regard.

3. Another rule set forth is that a check drawn on the account reduces the value of the account whether or not negotiated – N.J.A.C. 10:71-4.1(e)2. It is extremely important to be aware that the records will not show the account being reduced by the first of the month since the check was not negotiated. It has been my practice to keep a copy of the check and submit it to Medicaid for the subsequent month in order to establish eligibility. If such a resource is anticipated such as an income tax refund for a medical reimbursement, it would make sense in advance as to plan the use of such monies. For example, meet with the funeral director in advance and make preliminary arrangements. As indicated in prior posts, expenses relating to the joint home are excludable. However, such expenses should be justified and are subject to the concept of reasonableness.


Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.

© April 2009, Post 73