A recent court ruling likely will lead to a substantial expansion in the number of homes transferred to the owners’ child caregivers in New Jersey, according to a story in The National Law Review journal.

In A.M. v. Monmouth County Board of Social Services, the New Jersey Appellate Division recently reaffirmed the New Jersey regulation that allows older adults to transfer ownership of their homes to their adult caregiver children without Medicaid penalty. As a condition of transfer, the adult child must have provided care to the parent for a period of two years, delaying the need for the parent to enter a long-term care facility.

The New Jersey Medicaid program has acted in opposition to the regulation and attempted to narrow it repeatedly over the years, The National Law Review reported. In past cases, the agency claimed that the regulation applied only to caregivers who did not work outside the home. In the latest decision, the Appellate Division has recognized that caregivers can qualify if they meet the requirements of the regulation regardless of whether they work outside the home.

The court held that the language of the regulation governs and requires only that 1) the child lived with the parent for two years prior to institutionalization; 2) the child provided special care that allowed the individual to remain at home when they would otherwise require a nursing home level of care; and 3) the care provided exceeded personal support activities and was essential to the health and safety of the parent, the journal said.