Community Spouse Income and Resource Allowance
What The Community Spouse Can Keep
One of the most common concerns that I come across when dealing with clients applying for Medicaid in New Jersey is what will the healthy spouse, or “community spouse” be left with in order to be supported. Will Medicaid take all of our assets? Will Medicaid take all of our income? It is a very scary thought, and I would therefore like to discuss this subject in order to provide clarity.
First and foremost it is important to note that the community spouse is entitled to keep the primary home and it does NOT need to be listed for sale and spent down. The home is taken out of the equation completely when determining financial eligibility. This is one of a number of assets exempt from the calculation. With that in mind, let’s move on to the two financial items taken into consideration when determining what the community spouse may keep. They are resources and income.
It is important to note that Medicaid considers all the resources of a married couple to be jointly owned regardless of who is listed as the owner. In terms of the resource limits, the Medicaid guidelines for NJ are exactly the same for the applicant whether or not they are married or single. Meaning, the applicant can keep a maximum of $2000 period. However, when the applicant is married and the healthy spouse is in the community, Medicaid will allow the spouse to retain a certain amount of assets in addition to the $2000 that the applicant can keep. The assets that the community spouse can keep is known as the Community Spouse Resource Allowance.
Community Spouse Resource Allowance
When only one spouse of a married couple is applying for Medicaid long-term care, there are federal laws in place to ensure that the community spouse will be left with resources and income with which to live on. This is referred to as the Community Spouse Resource Allowance, or CSRA. In most states, including New Jersey, the current figures are as follows. The community spouse is entitled to a minimum of $25,728 and a maximum of half the assets up to $128,640. Put another way, the community spouse can keep half of the assets up to $128,640, but the first $25,728 goes to the community spouse fully.
So for example, if a husband is admitted to a Nursing Home and together with his wife they have combined assets worth $25,728 then the wife can keep all of it because she is entitled to a minimum of that $25,728. If the combined assets are $257,280, the wife is entitled to keep $128,640 which is half of the assets. (aside from the $2000 that the husband can keep). However, if the combined assets are let’s say $300,000, the wife is still only entitled to $128,640, even though half of $300,000 is $150,000. The reason being because $128,640 is the maximum amount of resources that she can keep regardless of the total amount of combined resources. All of the assets that exceed the maximum amount will have to be spent down according to Medicaid guidelines.
The community spouse keeps all of their own personal income. The applicants income is due to the facility just like the case would be for a single applicant. However, in many situations, Medicaid will allow income from the applicant to be allocated to the community spouse in order to ensure that the community spouse will have the necessary means to live. This is called the Minimum Monthly Maintenance Needs Allowance, or MMMNA.
Minimum Monthly Maintenance Needs Allowance
In short, the Minimum Monthly Maintenance Needs Allowance is the amount of monthly income that the community spouse is entitled to keep (aside from his/her personal income). As of July 1, 2020, that amount is $2155 / month. This means that if the income of the community spouse is less than the minimum amount of $2155, he/she is entitled to keep income from the institutionalized spouse to bring his/her income up to $2155.
The figure of $2155 is just the minimum amount that the community spouse can keep, but depending on certain expenses detailed below, that number can increase to a maximum of $3216 / month.
Monthly Housing Allowance / Standard Utility Allowance
The Monthly Housing Allowance in New Jersey is $646.50 and Standard Utility Allowance (SUA) is $548. Medicaid assumes that with the MMMNA of $2155 the community spouse will be able to cover housing expenses up to $646.50 and Utility expenses up to $548. If housing expenses are greater than $646.50, or the utility expenses are greater than $548, Medicaid allows the community spouse to keep more income than the MMMNA of $2155 / month in order to cover the difference. Medicaid will only allow this up to a maximum of $3216.
So for example If Mike goes to a nursing home with a monthly income of $2000 and his wife Pam has an income of $1500, Pam will automatically be entitled to $655 of Mike’s income in order to bring her up to the MMMNA of $2155. In addition, Pam pays monthly rent and homeowners insurance for a total of $1000. So we subtract $646.50 from $1000 which comes to $353.50. So Pam is entitled to another $353,50 of Mike’s income. And finally, Pam pays for electric heat and garbage removal that comes to $600 / month in utility bills. So we subtract $548 from $600 which comes to another $52 that Pam is entitled to from Mike’s income. In total Pam gets $655+$353.50+$52 which comes out to $1060.50 of Mike’s income.