RALPH S. ROBBINS, CFP

A CERTIFIED FINANCIAL PLANNING PRACTITIONER

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The income test

Florida is one of many states that places a "cap" on a Medicaid recipient's income when receiving Medicaid long-term care benefits.  If the applicant's income exceeds the cap, even by one dollar, they may not meet this requirement (there is, however, a solution to this problem - see next paragraph). 

If there is a spouse not applying for benefits (known as the "Community Spouse"), then his or her income is not counted towards the applicant spouse's income limit. All figures below are as of July 1, 2017.

Income Requirements for the Applicant:  Gross monthly income cannot exceed $2,205.  If income exceeds this level it may still be possible to qualify by establishing and funding an Irrevocable Qualified Income Trust (aka, "QIT" or "Miller" trust) to meet the requirement.

Income Requirements for the Community Spouse:  The Community Spouse may have unlimited income.  The Community Spouse's own income is not considered in determining the applicant's eligibility.  See below for spousal income protections where the Community Spouse has low income.

  What is Income?

  For eligibility purposes Income is defined as gross income not net.   For example, most have Medicare Part B premiums subtracted from their Social Security benefit.  This must be added back when determining gross income.  Similarly, many have health insurance premiums, other benefit premiums, or taxes deducted from their pension income.  These, too, must be added back when calculating gross income.

  What is considered income?  Virtually every form of income is considered countable.  Social Security, pensions, disability benefits, all or a portion of some VA benefits, interest income, non-taxable income, dividends, IRA or other qualified plan distributions, income from annuities, income from ongoing business concerns or income producing property, and any other income the applicant may be receiving is countable income with rare exceptions.  In some cases gifts to the applicant can be considered income.

Income Protection for the Community Spouse:  The Community Spouse may be able to receive all or portion of the applicant spouse's income if their own is insufficient to meet a minimum standard.  This standard is called the Minimum Monthly Maintenance Needs Allowance (MMMNA).

  1. The Spouse at home may retain a minimum of $2,030 and a maximum of $3,023 of joint marital income.  In other words, if the community spouse's income is less than $2,030 per month she is entitled to that portion of her husband's income that will make up the shortfall before any payments to a nursing home or other Patient Responsibility. 

Example:  Shirley has Social Security income of $966 per month.  Her husband, who is applying for Medicaid, has Social Security income of $1,234.  Virtually all of her husband's income is required to go to his cost of care.  This is his "Patient Responsibility" or contribution towards his own cost of care.  However, because Shirley's income is below the $2,030 minimum threshold, she is permitted to receive at the very least $1,064 per month of her husband's Social Security to make up the difference. 

  1. If she can demonstrate that her shelter expenses are higher, she can apply to Medicaid to receive up to $3,023 per month from their combined total income. 

  1. If her husbands income is insufficient to make up the shortfall, she can ask for a "Fair Hearing" to retain assets, if available, above the community spouse resource allowance (the amount the spouse is allowed to keep in assets) of $120,900 to generate greater income or to receive a greater portion of her husband's income.

  Once the Income test is met, the applicant must pass the Asset test.

To learn about the Asset Test, click here:

The Asset Test

 

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