On appeal from a final decision of the Director of the Division of Medical Assistance and Health Services.
Shebell, Long and Landau. The opinion of the court was delivered by Landau, J.A.D.
This appeal, filed on behalf of a nursing home resident, M.R., challenges a final decision of the Director of the Department of Human Services, Division of Medical Assistance and Health Services, (Director), which held that under N.J.S.A. 30:4D-2 and N.J.A.C. 10:71-5.1 et seq., voluntarily waived state pension benefits are considered "available income" when evaluating Medicaid eligibility.
In so holding, the Director rejected an Administrative Law Judge's decision which recommended a contrary result. It is not disputed that the waived monthly benefits, when added to M.R.'s Social Security and other pension benefits, exceeded the monthly income level of $1,221 necessary to qualify for medical assistance under the applicable guidelines.
N.J.S.A. 43:4-7 and 43:4-8 permit a retiree under any pension act or retirement system established pursuant to law to waive payment of a portion of any pension, and to withdraw or modify the waiver request. Once waived, however, the pension benefit for a given month cannot be retroactively recaptured.
In this case, a waiver was executed on behalf of M.R., reducing her monthly state pension allowance from $452.08 to $0 as of February 1, 1991. Her Medicaid application was then filed, reporting available income which did not include this amount.
The legislative declaration of purpose in N.J.S.A. 30:4D-2 provides in pertinent part: "benefits provided hereunder shall be last resource benefits notwithstanding any provisions contained in contracts, wills, agreements or other instruments." In adopting standards for determining Medicaid eligibility under this program which is jointly funded from federal and state sources, a state agency must take "into account only such income and resources as are, as determined in accordance with standards prescribed by the Secretary, available to the applicant or recipient . . . ." 42 U.S.C.A. § 1396a(a)(17)(B).
"Available income" is the subject of a regulation adopted by the Division of Medical Assistance:
Availability of Income: In order to be considered in the determination of eligibility, income must be "available." Income shall be considered available to an individual when:
i. with the exception of income from self-employment, the individual actually received the income;
ii. with the exception of income from self-employment, the income becomes payable but is not received by the individual due to his/her preference for voluntary deferment;
iii. Income has been deemed available to the applicant (see N.J.A.C. 10:71-5.5 regarding ...