Why Nursing Homes Can’t Touch Your Stimulus Check, Even if You’re on Medicaid
People who live in nursing homes or assisted living facilities get to keep their coronavirus stimulus checks, even if they’re on Medicaid.
But some facilities are telling residents on Medicaid that they have to turn over their stimulus money, according to the Federal Trade Commission.
Here’s why it’s a complete lie: The stimulus payments are tax credits. Tax credits don’t affect eligibility for Medicaid and other benefit programs, and they aren’t counted as a resource that you have to use to pay for those benefits.
Medicaid covers about 62% of nursing home residents, according to the Kaiser Family Foundation. And with most nursing facilities still closed off to the public nationwide due to COVID-19, it could be tougher to monitor your loved one’s finances if they live in a nursing home.
4 Things Medicaid Recipients Need to Know About Their Stimulus Payments
If you’re receiving Medicaid, here are a few essentials to know about your stimulus check.
- The money is yours to spend however you want. There are no restrictions on how you can spend the money, regardless of whether you live on your own or in a nursing facility.
- The payments do not count as income.
The payments don’t count as income for tax purposes, and they also don’t count as income for Medicaid rules. That means the stimulus payment doesn’t affect a nursing home resident’s monthly payment, often referred to as the “patient pay amount” or “share of cost.” Here’s an example from the National Center on Law and Elder Rights:
“An unmarried resident receives $1,050 monthly Social Security benefit and has $1,800 in savings. Each month she pays the nursing facility $1,000 from her income, and keeps $50 for personal needs. After receiving the $1,200 stimulus payment in May 2020, her payment obligation to the nursing facility does not change. She continues to pay $1,000 monthly.”
- You have a year to spend down the money. Medicaid recipients generally can’t have more than $2,000 in their bank accounts. Additional money is considered a resource that you can contribute toward your care. But the extra $1,200 won’t count against you for a full year.
Per the National Center on Law and Elder Rights: If you have $1,800 in a savings account and you get a stimulus check in May 2020 that boosts your savings to $3,000, you have until May 2021 to spend your savings back below $2,000.
- You’ll receive the money in the same way you receive other benefits. Your stimulus check will be processed automatically and sent to you the same way you receive Social Security, SSI or other benefits. The vast majority of Social Security recipients receive their payments via direct deposit, so they’ll get their stimulus checks via direct deposit as well.
What to Do if a Nursing Facility Is Claiming a Stimulus Payment
But if you’re worried that this could happen, show the facility staff the FTC release and the materials linked, and let them know that you’re aware that they can’t take stimulus payments. This is a situation where showing that you know your rights will pay off.
Robin Hartill is a certified financial planner and a senior editor at The Penny Hoarder. She writes the Dear Penny personal finance advice column. Send your tricky money questions to [email protected]