What is the Caregiver Child Exemption?
The Caregiver Child Exemption, also known as the Caretaker Child Exception, enables an elderly individual to transfer their home to their adult child without violating Medicaid's 5-year look back rule on asset transfers. Therefore, they can transfer their home and continue to be or gain eligibility for Medicaid.
The Caregiver Child Exemption allows adult children to care for their parent at home as opposed to moving them into a Medicaid-funded assisted living residence or nursing home. It is a Medicaid-sanctioned method that enables the adult child to be compensated for their caregiving in the form of a transfer of the parent's home. The home would have otherwise have to be sold and the proceeds used to pay for nursing home / assisted living care.
To qualify for the Caregiver Child Exception, the caregiver child must live in the home with his or her parent for at least two years prior to the parent’s admittance to a nursing home or assisted living facility, and they must provide a level of care that prevents the senior from needing to relocate during this time period.
Medicaid's 5-year look back is a rule that considers the asset transfers a Medicaid applicant has made in the 60 months prior to their application. The Caregiver Child Exception is an exception to this rule.