Medicaid Spousal Impoverishment Rules: What the At-Home Spouse Keeps

Here's the short version. If your spouse needs Medicaid to pay for a nursing home, you do not have to give up everything to qualify. Federal rules called spousal impoverishment protections set aside part of a couple's combined savings for the spouse who stays home. If your own income is low, part of your spouse's income can be set aside for you too. Your home is also protected while you live in it. Congress created these rules in 1988 so that the spouse at home could keep living with independence and dignity. This page explains how the protections work and how to ask for more if the standard amounts aren't enough.

Who the rules cover

Medicaid uses two terms. The institutionalized spouse is the one in a nursing facility or other medical institution. The community spouse is the one who is not. The rules apply when the stay is expected to last at least 30 days in a row. They also apply to people in PACE programs, and to certain people who get Medicaid home and community-based waiver services instead of nursing-home care. See Medicaid home care and HCBS waivers for that side.

These are federal rules, and they apply in all 50 states and the District of Columbia. Each state fills in its own numbers within federal limits, so your state Medicaid office has the exact figures.

Savings: the snapshot and the spousal share

The process starts with a snapshot. As of the first day of the continuous stay, the state adds up the value of everything either spouse owns. It does not matter whose name is on the account. Some items don't count at all. The rules use the same exclusions as Supplemental Security Income (SSI), and the home you live in is the biggest one. Our spend-down guide lists the usual exempt items.

Half of that total is called the spousal share. You can ask the state to do this assessment at the start of the stay, even before you apply for Medicaid. The state must document the total, give both spouses a copy, and tell you about your right to a fair hearing. If you ask for the assessment without applying, the state may charge a reasonable fee. Getting this snapshot early is worth it. It locks in the numbers that everything else is built on.

How much the at-home spouse keeps: the resource allowance

The amount the community spouse keeps is called the community spouse resource allowance, or CSRA. It is the greatest of these:

• A minimum amount set by federal law, or a higher amount your state chooses, up to the federal maximum.
• The spousal share (half of the couple's countable savings), but not more than the federal maximum.
• A larger amount set at a fair hearing, or ordered by a court for the spouse's support.

The federal minimum and maximum rise each year with inflation. Medicaid.gov publishes the current year's amounts in its spousal impoverishment standards, and your state Medicaid office can tell you which amount applies to you. Some states let the community spouse keep half up to the maximum. Others let every community spouse keep the maximum. That is why the same couple can face different rules in different states.

Anything above the allowance counts as available to the spouse in the nursing home. That excess usually has to be spent down before Medicaid pays. Our spend-down and look-back guide explains what counts as legitimate spending.

Two more protections follow. First, the nursing-home spouse can transfer an amount equal to the allowance to the community spouse without a transfer penalty. This should happen as soon as practical after eligibility is decided. Second, once eligibility is established, the community spouse's savings are no longer counted for the nursing-home spouse at all, for as long as the stay continues. Money you save or earn later stays yours.

Income: what the at-home spouse keeps each month

Income works differently from savings. While your spouse is in the facility, none of your income counts toward their care. The general rule is the name on the check. Income paid only in one spouse's name belongs to that spouse. Income paid in both names is split in half.

After your spouse qualifies, most of their income goes toward the cost of care. But the state must first deduct these amounts, in this order:

1. A personal needs allowance for the spouse in the facility.
2. A community spouse monthly income allowance, but only if that income is actually made available to you.
3. A family allowance for dependent children, parents, or siblings who live with you.
4. Medical expenses the nursing-home spouse has to pay.

Whatever is left goes to the facility.

The monthly maintenance needs allowance

The income allowance is built on a floor called the minimum monthly maintenance needs allowance, or MMMNA. Each state sets its own, but it must be at least 150% of the federal poverty line for a family of two, figured monthly. The state adds an excess shelter allowance when your rent or mortgage, property taxes, insurance, and a standard utility amount add up to more than 30% of that base. Federal law caps the total, and the cap rises with inflation each year.

Here is how it works in practice. The state compares your own monthly income to your MMMNA. If your income is below it, the difference can come out of your spouse's income before the facility is paid. If a court has ordered your spouse to pay you support, the allowance can't be less than that order.

Your home and other protections

Home equity. Federal law makes a person ineligible for nursing-home Medicaid if their equity in the home is above a limit that rises with inflation. States can choose a higher limit within a federal range. That limit does not apply while a spouse lives lawfully in the home. The same is true for a child under 21 or a child who is blind or disabled. Nothing in the law stops a person from using a reverse mortgage or home equity loan to lower their equity, and hardship waivers exist.

Estate recovery. After the nursing-home spouse dies, the state may try to recover what Medicaid paid, often from the home. Recovery generally may not happen while a surviving spouse is alive. Full guide: Medicaid estate recovery: can Medicaid take my house?

Transfer penalties. The look-back rules still apply to gifts. Moving money between spouses within the resource allowance is allowed, but giving assets to other people can still trigger a penalty period. Check with your state before moving anything.

If the standard amounts aren't enough: notice and fair hearing

When your spouse is found eligible, or whenever either of you asks, the state must notify you of the income allowance, any family allowance, the method it used to figure the resource allowance, and your right to a fair hearing. Either spouse can ask for a hearing on the income allowance, the resource calculation, or how income and assets were attributed. A hearing about the resource allowance must be held within 30 days of your request.

A hearing can raise the amounts. If you can show exceptional circumstances that cause significant financial duress, the state must raise your monthly income allowance to cover the need. If the income from your resource allowance isn't enough to bring you up to your monthly allowance, the state must let you keep more savings. One catch: under the income-first rule, the state counts your spouse's income that could be shifted to you before it lets you keep extra savings. Our rights and appeals guide covers how Medicaid fair hearings work.

Common questions

Related pages

• Medicaid Spend-Down and Look-Back Rules — what counts as an asset and how transfer penalties work.
• Does Medicare Cover Nursing Home Care? — why Medicare stops and Medicaid takes over.
• Medicare for Couples — how coverage decisions interact for two people.
• Medicaid Eligibility — the income and asset pathways into the program.
• Medicaid Estate Recovery — the after-death rule and who is protected.

Official sources: Medicaid.gov: Spousal Impoverishment, Social Security Act §1924 (treatment of income and resources for institutionalized spouses), and Social Security Act §1917 (transfers, trusts, and home equity).