Many families assume that if an older adult’s monthly income exceeds Medicaid’s income limit, they are automatically disqualified from receiving Medicaid home care. In reality, that is one of the most common misconceptions in elder law. In New York, many individuals with income above Medicaid’s limit can still qualify for home care benefits through the use of a Pooled Income Trust (PIT).

What is Community Medicaid?

Community Medicaid is the program that helps eligible New Yorkers receive long-term care services while remaining in the comfort of their homes. These services may include personal care aides, home health aides, and care provided through Managed Long-Term Care (MLTC) plans. For many seniors, remaining at home for as long as possible is the primary goal, and Medicaid home care makes that possible.

What Are the Income and Asset Requirements for Community Medicaid in New York in 2026?

In 2026, New York’s Community Medicaid program, which covers home care, including services through Managed Long-Term Care (MLTC) and the Consumer Directed Personal Assistance Program (CDPAP), limits applicants to $1,836 in monthly income and $33,038 in countable resources. While many people focus on the asset limits, it is often the monthly income limit that creates the greatest concern. Social Security benefits, pensions, required minimum distributions from retirement accounts, and other recurring income can easily place someone above Medicaid’s allowable income threshold.

Fortunately, exceeding the income limit does not necessarily prevent someone from qualifying for home care. Instead of paying the excess income over to Medicaid, the applicant deposits the excess income into a Pooled Income Trust each month, and that deposited income is not counted toward Medicaid’s income limit.

How Does a Pooled Income Trust Work?

A Pooled Income Trust is administered by a nonprofit organization on behalf of many beneficiaries, each of whom have a separate sub-account. Every month, the applicant deposits only the amount of income that exceeds Medicaid’s limit into the trust. That deposited income is no longer counted for Medicaid eligibility purposes.

After the excess income is deposited, those funds can be used to pay approved household and other personal expenses on the beneficiary’s behalf. This includes, but is not limited to, rent, mortgage, real estate taxes, utilities, homeowners’ insurance, cable, internet, phone service, food, clothing, and more. Bills are submitted to the trust administrator, who pays the expense directly from the funds in the trust. Income cannot be used to cover expenses already covered by Medicaid, or for any expenses unrelated to the beneficiary.

For many families, this arrangement provides the best of both worlds. The individual becomes financially eligible for Medicaid home care while still benefiting from the income that would otherwise exceed the program’s limits. Instead of losing access to needed care because of excess income, that income continues to support the person’s day-to-day living expenses.

What If Nursing Home Care is Needed?

Chronic Care Medicaid, which covers long-term care in a nursing home, follows different financial rules. Unlike Community Medicaid, Chronic Care Medicaid does not impose a monthly income cap, but it also does not permit the use of a Pooled Income Trust. Instead, after eligibility is established, nearly all of the Medicaid recipient’s monthly income must be contributed toward the cost of care. This amount is commonly referred to as the Net Available Monthly Income (NAMI). The resident is permitted to keep only a small monthly $50/month Personal Needs Allowance, although different rules may apply if there is a spouse continuing to live in the community, as some or all of the recipient’s income may instead be allocated to the community spouse.

What to Know Before Setting Up a Pooled Income Trust

Families should recognize that a Pooled Income Trust is designed to spend the deposited funds for the beneficiary’s benefit. Allowable expenses should be submitted regularly, and the account should not be allowed to accumulate unnecessarily. Any funds remaining in the trust upon the beneficiary’s death generally remain with the nonprofit organization administering the trust rather than passing to heirs. For that reason, it is important to evaluate anticipated monthly expenses before establishing the trust to ensure the arrangement is financially beneficial.

Not Sure If a Pooled Income Trust is Right for You? Get Help from an Elder Law Attorney

As long-term care costs continue to rise, many New Yorkers mistakenly believe they must choose between qualifying for Medicaid and maintaining the income they need to pay everyday bills. Fortunately, that is often not the case. A properly established Pooled Income Trust can allow individuals to receive the home care they need while continuing to use their income to support their household expenses. Because Community Medicaid and Chronic Care Medicaid operate under different financial rules, and because Medicaid eligibility requirements change periodically, consulting with an experienced elder law attorney can help families determine whether a Pooled Income Trust is appropriate for their particular circumstances and ensure that planning is completed correctly before care is needed.

By Alma Muharemovic, Esq.

Alma Muharemovic, Esq. is an associate attorney at Burner Prudenti Law, P.C. focusing her practice areas on Estate Planning. Burner Prudenti Law, P.C. serves clients from New York City to the east end of Long Island with offices located in East Setauket, Westhampton Beach, Manhattan and East Hampton.