Will Your Stimulus Check Affect Medicaid Eligibility?

Last month, many of us received stimulus checks in the mail. In fact, according to USA Today, 88% of Americans aged 18 and older were eligible for them. The check distribution started after the government passed the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act to help those facing financial setbacks amid the pandemic.

The CARES Act provided a stimulus check of $1,200 to individuals earning less than $75,000 per year ($150,000 for couples who file jointly), including Social Security beneficiaries. Individuals earning up to $99,000 ($198,000 for joint filers) received a smaller stimulus check, based on either 2018 or 2019 tax returns.

According to the IRS, Social Security recipients who weren’t required to file federal tax returns for 2018 or 2019 received $1,200 stimulus payments automatically.

Good News for Medicaid Recipients and Those Hoping to Qualify

Medicaid recipients and those hoping to qualify are wondering how the stimulus payment will affect them. The good news is that because the payment is not income, it should not count against a Medicaid recipient’s eligibility. According to Elder Law Answers, “(t)he basic Medicaid rule for nursing home residents is that they must pay all of their income, minus certain deductions, to the nursing home. If the stimulus payment were considered income, it would likely have to go straight to the nursing home. Since in most states Medicaid recipients cannot have more than $2,000 in assets, there was also concern that the stimulus payments could put many recipients over the asset limit.”

The Social Security Administration clarified that it will not consider stimulus payments as income for Supplemental Security Insurance (SSI) recipients, and the payments will be excluded from resources for 12 months. Because state Medicaid programs cannot impose eligibility requirements that are stricter than SSI requirements, the payments do not affect Medicaid eligibility. However, the money must be spent for the benefit of the Medicaid recipient within 12 months, because if the Medicaid recipient still has any of the stimulus money after 12 months, it will be considered a resource.

Did a Nursing Home Take Your Stimulus Check? What to Do!

The Federal Trade Commission has recently warned that some nursing homes have taken the stimulus payments intended for their residents on Medicaid. Some of these residents are being required to sign over those funds to the facility, who are claiming that, because the person is on Medicaid, the facility gets to keep the stimulus payment.

Again, those economic impact payments are, according to the CARES Act, a tax credit. And 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 a nursing home took your loved one’s payment already, contact your state attorney general’s office first, and then tell the FTC at If a loved one lives in a nursing facility and you’re not sure what happened to their payment, talk with them soon, and if you’re concerned, check with the nursing home administrator.

For the federal tax law that says refunds aren’t considered a “resource” in federal benefits programs, click here. For the Congressional Summary that talks about the funds as tax credits not countable as resources for federal government programs, click here (it’s on page 3.) For even more helpful information from the National Center on Law & Elder Rights, view their information for those in nursing homes.

Should We Expect a Second Stimulus Check?

In May, the House of Representatives passed the Heroes Act, a bill that would allow for a second round of stimulus checks while also giving financial aid to frontline workers. If the Senate passes the bill, it’s possible that a second stimulus check could arrive in the next few months. Starting on June 1, the Senate began deciding whether to approve the bill for taxpayers or draft an entirely new stimulus plan. It may mean waiting a few weeks before making a final decision and passing the bill off to the president, though. A June 5 report from the Department of Labor reveals that unemployment has improved, which could complicate the possibility of a second stimulus payment.

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

If you have a spouse or other loved one who is nearing the need for assisted living or nursing home care, or already receiving assisted living or 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 needs, the better. But it’s never too late to begin the process of Long-term Care Planning, also called Lifecare 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 myself, 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.