Florida Elder Law & Estate Planning Blog
Steps To Prevent Stimulus Money From Jeopardizing Your Medicaid Benefits
April 2, 2021
If you or a loved one are disabled and receiving federal benefits such as Medicaid , take care when you receive your federal stimulus check. If not properly handled, the funds could put you over the asset cap and jeopardize your benefits.
Under federal guidelines, a Medicaid recipient may have no more than $2,000 in assets. The stimulus check will not automatically impact your Medicaid eligibility if you do not immediately spend the money. However, if (a) the check pushes your asset level over $2,000, and (b) your asset level still exceeds the $2,000 cap twelve months after receiving the check, your benefits may be at risk. Therefore, you must spend whatever amount of money would put you over the limit before 12 months elapses. Equally important is how you spend it.
For Some People, An ABLE Account May Be A Good Solution
An ABLE Account (Achieving A Better Life Experience) is a tax-advantaged account that is available to individuals with qualifying disabilities who became disabled prior to age 26. The funds in this type of account are not considered a countable resource for means-tested federal programs. Therefore, stimulus funds may be transferred into an ABLE account to bring the recipient’s other assets below the $2,000 cap, preserving benefits eligibility. (Note that Congress is currently considering a measure that would make ABLE accounts available to those whose disabilities emerged after the age of 26.) Learn more about ABLE Accounts.
If You Or A Loved One Are In A Nursing Home
To preserve Medicaid benefits, the funds should be spent only on certain categories of expenses. Nothing should be purchased that Medicaid would consider a countable asset.
Examples of acceptable expenditures:
Medical bills not covered by insurance
Medical equipment that can improve independence
Personal hygiene and personal comfort items – blankets, haircuts, etc.
Transportation to and from family events
Upgrading electronic devices such as a television, phone, computer or I-Pad.
Can The Nursing Home Take A Recipient’s Stimulus Money?
No! The stimulus payment is a tax credit, and as such is not considered either income or a countable resource. Notwithstanding, during the last round of stimulus checks, the Federal Trade Commission learned that some nursing homes were requiring residents to sign over their checks to the facility. If you encounter this situation, contact management or get in touch with the Florida Attorney General.
What Happens If The Spouse Of a Medicaid Recipient Receives Stimulus Money?
Stimulus money received by the well (“community”) spouse does not affect the Medicaid recipient’s benefits. The funds are not considered income to the spouse, and will not affect benefits such as spousal diversion of income from the institutionalized spouse to the community spouse.
Contact an elder law attorney for guidance. The attorneys of The Karp Law Firm can be reached at (561) 625-1100.