S2676

An Act concerning Holocaust reparations payments, supplementing Title 2A of the New Jersey Statutes and amending P.L.1979, c.365.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. (New section) Except for an income withholding order issued pursuant to the "New Jersey Child Support Program Improvement Act," P.L.1998, c.1 (C.2A:17-56.7a et al.), monetary reparations payments designated for or received by a Holocaust survivor of National Socialist (Nazi) persecution from any governmental source or victim assistance source shall be exempt from all claims of creditors and from levy, execution, attachment, or other legal process.

2. Section 7 of P.L.1979, c.365 (C.30:4D-7.2) is amended to read as follows:

7. a. (1) A lien may be filed against and recovery sought from the estate of a deceased recipient for assistance correctly paid or to be paid on his behalf for all services received when he was 65 years of age or older, except as provided in section 1 of P.L.1981, c.217 (C.30:4D-7.2a).

(2) In the case of a recipient who became deceased on or after April 1, 1995 for whom a Medicaid payment was made on or after October 1, 1993, a lien may be filed against and recovery sought from the estate of the deceased recipient for assistance correctly paid or to be paid on his behalf for all services received when he was 55 years of age or older, except as provided in section 1 of P.L.1981, c.217 (C.30:4D-7.2a).

(3) As used in this section, "estate" includes all real and personal property and other assets included in the recipient's estate as defined in N.J.S.3B:1-1, as well as any other real and personal property and other assets in which the recipient had any legal title or interest at the time of death, to the extent of that interest, including assets conveyed to a survivor, heir or assign of the recipient through joint tenancy, tenancy in common, survivorship, life estate, living trust or other arrangement.

"Estate" shall not include amounts received as reparations or restitution for the loss of liberty or damage to health by the victims of National Socialist persecution; returns of tangible or intangible property seized, misappropriated or lost as a result of National Socialist actions or policies and any cash values in replacement of such property; payments of insurance policies purchased by the victims of National Socialist persecution; and any accumulated or accrued interest on such amounts. National Socialist actions or policies include, but are not limited to, actions and policies taken by Germany and other countries, or by organizations and institutions within those countries, against the victims of the Nazi Holocaust.

b. A lien may be filed by the division against a third party's property, whether real or personal, or against any interest or estate in property, whether vested or contingent.

Subject to section 6 of P.L.1979, c.365 (C.30:4D-7.1), any third party recovery obtained by the division under this subsection shall not be reduced by any counsel fees, costs, or other expenses, or portions thereof, incurred by the recipient or the recipient's attorney.

c. A certificate of debt may be filed by the division against such parties and in such a manner as is specified in subsection (h) of section 17 of P.L.1968, c.413 (C.30:4D-17).

d. (1) A lien, claim or encumbrance imposed by this act shall be deemed a preferred claim against the recipient's estate and shall have a priority equivalent to that under subsection d. of N.J.S.3B:22-2.

(2) In the case of a recipient who became deceased on or after the effective date of P.L.1995, c.289, a lien, claim or encumbrance imposed pursuant to this section shall be deemed a preferred claim against the recipient's estate and shall have a priority equivalent to that under subsection c. of N.J.S.3B:22-2.

(cf: P.L.1995, c.289, s.1)

3. This act shall take effect immediately.

STATEMENT

This bill provides that, except for child support payment orders, monetary reparations payments designated for or received by a Holocaust survivor of Nazi persecution from any governmental source or victim assistance source shall be exempt from all claims of creditors and from levy, execution, attachment, or other legal process.

This bill also exempts these monies from estate recoveries under the Medicaid program. Under State and federal Medicaid law, a State must seek recovery from the estate of the deceased Medicaid recipient for assistance correctly paid or to be paid on his behalf for all services received when the recipient was 55 years of age or older. These services would include nursing home services, home and community-based services and related hospital and prescription drug services. Federal law exempts Holocaust reparations payments as assets/resources for the purposes of determining eligibility for Medicaid as long as the payments are "separately identifiable," that is, maintained in a separate account. Any interest or dividends earned on the reparation payments, however, are not exempt from Medicaid's calculation of income and assets/resources. This bill would continue the exempt status of the reparations payments upon the death of the Medicaid recipient by providing that they are not part of the Medicaid recipient's estate and, therefore, not subject to recovery in an estate proceeding of a Medicaid recipient.

In 2000, a global settlement agreement and plan of distribution was ratified which included the establishment of an $800 million settlement fund designed to provide restitution to Holocaust victims and their survivors for moneys illegally obtained from Swiss banks by the Nazi regime. The Claims Resolution Tribunal has received over 32,000 claims from Nazi victims or their heirs to assets deposited in Swiss banks in the period before and after World War II.

At about the same time, the International Commission on Holocaust Era Insurance Claims established a program to settle insurance claims never paid to Holocaust victims or their heirs. Recently, Holocaust survivors or their heirs have begun to receive reparations payments from the funds established for this purpose. It is estimated that approximately 4,500 Holocaust survivors live in New Jersey.

Because these funds represent reparations for moneys improperly seized or withheld, it is the sponsor's intent to ensure that they are not further diminished by remaining subject to creditor or other claims.