Is Anything Exempt From Spend Down Under New Jersey Medicaid Regulations

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

When someone applies for Medicaid, it is generally understood that they have to be basically destitute and/or broke.   But there are certain resources Medicaid does not require be spent down as a condition of eligibility.

Here is a summary list of those exempt resources under the regulations covering Medicaid in New Jersey:

  1. A house occupied by the individual as his or her place of residence. Short absences from the house do not affect eligibility but absences of more than six (6) months are assumed to indicate that the house is no longer a principal residence. Other qualifications apply so be careful! This can be a tricky determination under certain circumstances.   If you have questions, you should reach out to me to discuss it further.
  2. One automobile is totally excluded provided “the automobile is used for the transportation of the individual or a member of the individual’s household”. Any other automobiles have to be spent down or valued in accordance with the average wholesale value in the most recent edition of the “Red Book” official used for car valuations.
  3. Personal effects and household goods provided that the equity value is not greater than $2,000.00. As a practical matter Medicaid never really looks at someone’s personal resources but still the regulations make reference to $2,000.00.
  4. The cash surrender value (notice it says cash surrender value of life insurance policies) owned and/or are in the control of the individual if the total face value of such policies does not exceed $1,500.00. If the total face value of all policies exceeds $1,500.00 the total cash surrender value of all policies is included as a resource.
  5. Non-home property that is used in a business or non-business self-support activities that is essential to the means of self-support of an individual is excluded from resources. This is a tricky regulation because it seems to suggest that only the property used in the business is exempt.   I recently had a client who had a very successful business which did not require the use of property.  It was my conclusion that the business was not exempt under this regulation.  Surprising but I can find no authority that exempts an ongoing business from mandatory spend down.
  6. The value of the resources which are not accessible to an individual through no fault of his or her own. This would include resources that are found in an Irrevocable Trust, property in probate and real property which can’t be sold because the co-owner refuses to liquidate it.

There you have a brief summary of the exempt resources that Medicaid says you do not have to spend down as a condition of eligibility.  If you have questions regarding the subject matter of this post, please do not hesitate to contact me to schedule an in person or telephone conference.

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.

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