How the Recent Stimulus Check Works if Your Loved One is in a Nursing Home

stimulusMaria’s mother, Annie, lives in a nursing home and is on Medicaid. Annie recently received a stimulus check as part of the third round of Economic Impact Payments that were sent to eligible Americans last month. For most of us, extra money in our accounts is a welcome gift. But for Maria and her mother, it caused concern.

Last year, when the other two checks arrived, Annie was still at home being cared for by Maria. Annie’s condition worsened quickly and she needed to move to a nursing home in late 2020. Now, Maria is concerned that the third check will affect Annie’s Medicaid eligibility and that the nursing home can legally take the check.

Rules for Medicaid Recipients Who Receive Stimulus Checks

Medicaid is a program administered by states according to federal requirements. The program is funded jointly by states and the federal government.

Under federal guidelines, a Medicaid recipient may have no more than $2,000 in countable assets (though this amount varies by state), so you can see why the check may have initially been a cause for concern for people in Annie’s situation. Countable assets generally include all belongings except for (1) personal possessions, such as clothing, furniture, and jewelry, (2) a motor vehicle, (3) the applicant’s principal residence (though in Virginia the residence becomes comfortable after you have spent six months in a nursing home), (4) property used in a trade or business, (5) certain prepaid burial arrangements, (6) term life insurance policies, (7) a life estate in real property, (8) certain special needs trusts, and (9) assets that are considered inaccessible for one reason or another. All resources must be reported and include money on hand in the bank and in a safe deposit box, stocks, bonds, certificates of deposit, trusts, prepaid funeral arrangements, cars, boats, life insurance policies, and real estate.

Rest assured though that the stimulus check will not automatically impact Medicaid eligibility if you do not immediately spend the money. However, if the check pushes your asset level over $2,000, and 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. It is also important how you spend it!

Acceptable Ways to Spend the Stimulus Check if Your Loved One is On Medicaid

Examples of acceptable expenditures for those on Medicaid include medical bills not covered by insurance; medical equipment that can improve independence; therapies; snacks; assistive devices; personal hygiene and personal comfort items such as blankets, haircuts, etc.; transportation to and from family events; and purchasing electronic devices such as a television, phone, computer, or iPad. There are many other acceptable ways to use the stimulus check received by your loved one on Medicaid:

1) Replenish their savings up to the resource limit.

One way to use the money is to bring your loved one’s accounts back up to the applicable resource limit, which, as mentioned, is generally $2,000 for individuals on Medicaid (although in Maryland it is $2,500 and in DC it is $4,000)  As stated above, the stimulus check is not counted as a resource for twelve months, but at the end of that 12-month period, you will need to make sure that the account is again safely below the resource limit.

2) Purchase items or services your loved one will need or want in the future.

When a family member is in a nursing home and their income must be paid to that facility every month, loved ones often end up purchasing, out of their own farms, the little comforts and necessities that improve their life. Clothes, toiletries, and snacks all add up, so they might be a good thing to spend the money on. You can also apply the funds towards non-covered services such as dental implants, contact lenses, or higher quality medical supplies.

3) Make small gifts.

Many Medicaid recipients are saddened when they can no longer give their grandchild a graduation or wedding gift due to Medicaid concerns. Others, who gave to charities or religious institutions their entire lives, may be saddened by their inability to do so. Some states allow small gifts from the stimulus check received by Medicaid recipients.

Can Nursing Homes Take Stimulus Checks?

The stimulus payments sent to Medicaid recipients living in nursing homes belong to the recipients, not the nursing homes. Facilities have no right to this money, as the checks are considered to be “tax credits.” Tax law says that tax credits don’t count as “resources” for federal benefits programs, such as Medicaid. So, nursing homes can’t take that money from their residents just because they’re on Medicaid.

If your loved one is in a nursing home that took their stimulus check, tell your state attorney general’s office first, and then contact the FTC. If a loved one lives in a nursing facility and you’re not sure what happened to their payment, talk with them soon. If you are still unsure, consider having a chat with the facility’s management. If you need backup, you can go here to get the federal tax law that says refunds aren’t considered a “resource” in federal benefits programs.

Medicaid Laws are the Most Complex and Confusing Laws in Existence. We Can Help!

If you or a loved one is nearing the need for nursing home care, or already receiving nursing home care, we can help to legally protect your family’s hard-earned assets from the catastrophic costs of nursing home care.

Nursing homes in Metro DC area cost $10,000 – $14,000 a month. Generally, the earlier someone plans for long-term care, the better. But it’s never too late to begin the process of Long-term Care Planning, also called Life Care Planning, Medicaid Asset Protection Planning, or just Medicaid Planning.

Medicaid laws are the most complex and confusing laws in existence, and impossible to understand without highly experienced legal assistance. Without proper planning and legal advice from an experienced elder law attorney, such as the attorneys at the Farr Law Firm, many people spend much more than they should on long-term care, and unnecessarily jeopardize their future care and well-being, as well as the security of their family. Please read the Medicaid Complexity page on our website for more details.

Please call us at any time to make an appointment for an initial consultation:

Medicaid Asset Protection Attorney Fairfax: 703-691-1888
Medicaid Asset Protection Attorney Fredericksburg: 540-479-143
Medicaid Asset Protection Attorney Rockville: 301-519-8041
Medicaid Asset Protection Attorney DC: 202-587-2797
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About Evan H Farr, CELA, CAP

Evan H. Farr is a 4-time Best-Selling author in the field of Elder Law and Estate Planning. In addition to being one of approximately 500 Certified Elder Law Attorneys in the Country, Evan is one of approximately 100 members of the Council of Advanced Practitioners of the National Academy of Elder Law Attorneys and is a Charter Member of the Academy of Special Needs Planners.

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