Medicaid Benefits and Holocaust Reparations

Holocaust survivors who seek Florida Medicaid long-term care benefits must be aware that any reparations monies they have received are subject to special rules for eligibility purposes. These rules include:

(1) Medicaid recipients who receive Holocaust reparations are not required to apply a portion of that income to the nursing home bill.

(2) Identifiable reparations that a Medicaid recipient has retained are considered an exempt assset, and do not count towards the $2,000 asset maximum.

(3) Transfers of identifiable Holocaust funds made during the lookback period are not subject to the penalties normally incurred by transferring other, non-exempt assets. 

Notice the word identifiable in (2) and (3) above. The reality is, most reparations are not readily identifiable. Most survivors co-mingle reparations funds with other funds and do not keep them in a separate account. Given this reality, for Medicaid eligibility purposes, Medicaid makes the presumption that reparations monies are spent last, and ordinary income and investment income spent first. Here's a recent case study to illustrate:

One of my clients, a Holocaust survivor, needed long-term nursing care. She and her late husband had both been receiving reparations for decades, but never kept those monies segregated. With some research, we were able to document that she and her spouse had received a total of $500,000 in reparations. In the past 3 years – the lookback period - they had given their daughter $300,000. Based on Medicaid's presumption that Holocaust funds are the last spent, and since the couple had not done any significant gifting prior to the three year lookback, Medicaid concluded that the gift represented reparation monies. Thus, the gift was deemed exempt, nothwithstanding the usual transfer rules and penalty periods. I have been advised that my client will beeligible for Medicaid benefits.

The treatement of Holocaust reparations for Medicaid planning purposes well illustrates the complexity of Medicaid eligibility rules for long-term care benefits. Preserving your assets requires expert legal guidance, to ensure the right steps are taken at the right time so you can get any and all benefits to which you are legally entitled. Contact the certified elder law attorneys of The Karp Law Firm for advice.