Community spouse resource allowance

What it means

Medicaid pays for long-term care only for people with almost nothing. Applied literally to a married couple, that would require impoverishing the spouse who is still living at home, and federal law says it does not.

The spousal impoverishment rules split the couple's countable assets as at the date the first spouse enters care. The spouse at home keeps a share — the community spouse resource allowance — between a federal floor and a federal ceiling that are adjusted each year. States set where within that range their own figure sits, and a few use a flat percentage.

A parallel rule protects income: the spouse at home may keep a minimum monthly maintenance needs allowance, and where their own income falls short, part of the institutionalized spouse's income is diverted to them rather than paid to the facility.

Both figures can be increased above the standard amount by a fair hearing or a court order in some circumstances. That is the part families most often do not know is available.

Why it matters

It is the difference between a spouse keeping the house and their savings, and being told to spend both.

The assessment is taken as at a specific date, so what the couple owned that month decides the figure — which makes the timing of an application consequential in a way nothing announces.

When you are likely to meet it

• When one spouse enters a nursing facility and the other stays at home.
• When a Medicaid caseworker asks for a snapshot of the couple's assets on the date of admission.
• When somebody says the family will have to spend down everything, which for a married couple is usually not true.

How this varies by state

The floor and ceiling are federal and change annually. Where a state sits between them, and how it treats the home, varies.

Related terms

• Look-back periodThe stretch of time before a Medicaid application during which gifts and transfers are examined, and can delay eligibility.
• MedicaidA joint federal and state program that pays for health care, including long-term care, for people with limited income and assets.
• Medicaid estate recoveryA state's claim against the estate of somebody whose long-term care Medicaid paid for, to recover what it spent.
• Skilled nursing facilityA facility providing nursing and rehabilitation care that has to be delivered by licensed clinical staff — not the same thing as a nursing home in the everyday sense.
• Spend-downUsing up income or assets on care until they fall below the limit at which Medicaid will start paying.

Sahvelo guidance that uses this

• Managing money for a parent