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Appendix A-17-3 Revised January 2026 Page 3 of 3

• Pay household bills such as credit card debt or other outstanding loans with a balance owned, • Purchase items that are needed by the IS or CS, • Purchase investments that will produce income for the CS, • Pay for the cost of care in the nursing facility. The only requirement for spending down excess resources is that the funds are used for the benefit of the Institutional Spouse and/or Community Spouse or a minor or disabled child of the IS or CS.

Income Rules

When an IS qualifies for Medicaid in a nursing facility, income belonging to the IS is available to pay toward the cost of his/her care in the facility. This is referred to as Medicaid Income.

Medicaid Income is not payable for a long term hospital admission or HCBS waiver program or during the time Medicare pays for the cost of the nursing facility room and board.

The CS may qualify for all or a portion of the income of the IS, depending on the actual income of both the IS and CS. Income belonging to the CS is compared to a maximum limit of $4066.50. If the total income of the CS is less than this maximum, the CS may qualify for a spousal allocation of the CS’ income.

For example: the IS has income of $1,000 in Social Security. The CS has income of $500 in Social Security. The CS’ income of $500 when compared to the maximum leaves a deficit well over $1,000. This means the CS will qualify to receive all of the income belonging to the IS and there is no Medicaid Income to pay the nursing facility.

NOTE: If the CS is eligible for Medicaid or wants to apply for Medicaid while living in the community, it is possible to adjust the amount of the spousal allocation so the amount received from the IS will not result in the loss of Medicaid for the Community Spouse.

Spousal resource and income rules no longer apply when any of the following occurs:

• The death of the IS or CS, • The divorce of the IS/CS, • The IS is discharged from the nursing home, hospital or HCBS waiver program, or • The CS enters a nursing facility.

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Official source

Appendix A-17-3 Revised January 2026 Page 3 of 3

Income Rules

When an IS qualifies for Medicaid in a nursing facility, income belonging to the IS is available to pay toward the cost of his/her care in the facility. This is referred to as Medicaid Income.

Medicaid Income is not payable for a long term hospital admission or HCBS waiver program or during the time Medicare pays for the cost of the nursing facility room and board.

Spousal resource and income rules no longer apply when any of the following occurs:

• The death of the IS or CS, • The divorce of the IS/CS, • The IS is discharged from the nursing home, hospital or HCBS waiver program, or • The CS enters a nursing facility.