Question: My father recently fell and broke his hip, he is coming home from the hospital and will require some help at home. I’ve heard that Medicaid can provide those services, however he has approximately $2,000.00 per month in income and my mother has approximately $1,000.00 per month income. Can he qualify and if so, will he lose his income?
Answer: Assuming your father meets the asset requirements for Medicaid, his income will not hinder his ability to qualify for Medicaid benefits. More importantly, he will be able to receive the homecare benefits without losing his monthly income. Prior to a recent change in the law regarding homecare benefits, your father would have been permitted to keep $829.00 in monthly income and would have established a pooled income trust for his excess income. The overage sent to the pooled trust each month (approximately $1,170) would have been used to pay your father’s household bills. For many families this system has worked quite well, providing a way for persons in need to get the help they require and still have access to their income (minus some small fees) to assist in paying household bills. This recent change in the law offers a new option for Medicaid recipients who are enrolled in a Managed Long Term Care program and who have a well spouse living with them in the community.
Simply put, the budgeting rules, referred to as “spousal impoverishment budgeting,” which were previously available only to those couples where one was residing in a nursing home and applying for Medicaid, are now available to those who are living in the community and applying for homecare benefits. Under spousal impoverishment budgeting, if one spouse has applied for Medicaid, he or she can transfer income to the community spouse in order to bring the community spouse’s income level to the amount permitted under the current Minimum Monthly Maintenance Needs Allowance [MMMNA], $2,931.00 per month in 2014, and the Medicaid applicant can keep a personal needs allowance in the amount of $383.00.
As you can see, the new budgeting would benefit your parents. All that would need to be done is a shift of approximately $1,600.00 of your father’s income to your mother each month. He could keep his personal needs allowance of $383.00 and the balance of his income would be transferred without the need for the establishment of a pooled income trust. Please note that while this budgeting benefits your parents, it may not be beneficial for all couples. Based upon the amount of income of each spouse, couples have the option to choose the budgeting system that is most beneficial and yields the most income to the couple.