Can Medicaid Take Your Pension


Dont Bank With The Facility

Can I qualify for Medicaid with an IRA or 401k?

Nursing homes may offer resident trust funds into which patients can deposit their pension checks, Social Security checks, and other monies. The problem is that unscrupulous nursing home employees can potentially steal from these accountsand they have.

As a 2013 investigation by Peter Eisler for USA Today revealed, 20 states did not require background checks for nursing home office workers who handle residents trust accounts, and only a handful of states require that those accounts be audited. The investigation found that business managers, bookkeepers, and other office workers had stolen from thousands of residents accounts. The lack of audits made it easier for thefts to go undetected. Some of these thefts were in the hundreds of thousands of dollars.

Nursing homes cannot require residents to deposit funds in resident trust funds and have no legal right to manage residents money. Even if a resident does put money in one of these funds, they must authorize every transaction or appoint a representative to do so .

If you are going to deposit your funds in such an account, know whether your state requires audits and background checks. If not, find out if the nursing home conducts its own criminal background checks on the people who will have access to residents accounts and if it performs voluntary audits of accounts.

What Can Be Done To Protect My Assets

You cannot simply give your assets away to qualify a spouse for Medicaid. This can put you in violation of Medicaids 5-year Look Back Period and result in a period of Medicaid ineligibility. However, there are ways for you to protect your assets. You can put money into non-exempt assets, such as paying for home modifications / renovations, vehicle modifications, or purchasing an irrevocable funeral trust. You can also pay off debt, such as your mortgage loan or credit cards. In addition, you could purchase an annuity. This takes countable assets and transforms them into non-countable income. Some of these approaches are straightforward and others are complicated. It is best to consult with a Medicaid eligibility expert before taking any action to ensure you are not in violation of Medicaids complicated rules.

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This post was originally published in September 2019. It has since been updated with new information and was most recently

You have spent your life working hard to build up assets that you plan to use for your retirement and care and to pass along to loved ones. Whether it is for yourself or a loved one, you may find yourself facing the decision about entering a nursing home.

The cost of nursing home care is expensive, and it can quickly drain any savings you have. One fear, however, is that you may lose the assets you have built over your lifetime putting everyone in your family at risk.

It is a common misconception that the nursing home itself seizes your assets. In reality, it is Medicaid that would look to your assets to pay for any nursing home care you need before allowing you to use Medicaids benefits as payment.

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Set Up A Power Of Attorney

Have the senior legally appoint a trusted relative or friend to act as a representative with the authority to manage money and make financial decisions by having a lawyer draw up a power of attorney document. In fact, you can do this long before you think your loved one might ever end up in a nursing home.

The POA can be written to go into effect only if the patient enters a facility or can no longer make their own decisions. POAs can act as a deterrent: If a sticky-fingered staffer at a facility knows Johns son has control over his finances, they might be less likely to target John.

Do You Suspect Financial Abuse In Your Family Members Nursing Home

Will Medicaid Take My House?

If you suspect that your loved one is the victim of financial abuse, you need to take steps to protect them. You not only have the right to hold nursing homes accountable, but you can request compensation for the pain and suffering your loved one experienced and hopefully get the funds that were stolen back, so that your loved one is not left without any assets or money.

To explore your legal rights, contact a nursing home abuse attorney like attorney Seth Gladstein at the Gladstein Law Firm, PLLC.

Schedule a free case evaluation now at 502-791-9000 or request more information online.

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What Is Medicaid Estate Recovery

Each state has its own Medicaid program, which means they all also have their own MERP law. For example, a house that you give to someone with a life estate deed or transfer-on-death deed could be subject to MERP depending on your state’s law.

In general, the state must collect repayment if the enrolled Medicaid recipient received some type of long-term care benefits and services when they were age 55 or older. However, states can choose to recover costs for all payments, not just long-term care expenses.

You can read our state-by-state guide to Medicaid to learn more or consult with someone who specializes in elder law like an elder law attorney in your area for more information.

Long-term care may include:

  • Nursing home care and related nursing facility services

  • Community- or home-based services

  • Any related hospital and prescription drug services

Keep in mind that estate recovery only happens after the Medicaid beneficiary passes away and that estate recovery does not happen when the Medicaid recipient leaves behind:

  • A surviving spouse or domestic partner

  • A child under 21 years old

  • A blind or disabled child

Your stateâs Medicaid estate recovery program may also extend to other circumstances, like if, for example, an adult child lived full time at the deceased’s home.

Will I Lose My Income

No, you, as the healthy spouse, will not lose your income, including Social Security. In fact, your income, as the Non-Institutionalized Spouse, is not even considered when your spouse applies for Medicaid. And it has no impact on whether your spouse is eligible for this program. It is only your spouses income that will be considered for eligibility purposes.

Although your income is not a factor in your spouses eligibility, a few states require the community spouse to contribute a portion of their income towards the cost of the nursing home care, IF their income exceeds a certain amount. However, even if this is the case, you, as the healthy spouse, will not have to contribute to the point that you will not have enough income on which to live.

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Benefits Of An Irrevocable Trust

There are pros and cons to using an irrevocable trust as part of your Medicaid plan.

For one, they can be a risky venture. As much as you believe the person you assign as a trustee will manage the assets in your best interests, there is nothing to stop that person from spending down the funds for their own gain. You need to be confident about your decision because you will not have legal recourse in the event that occurs.

Beyond converting your countable assets to non-countable assets, there are other benefits in having an irrevocable trust. This relates to estate planning.

Upon your death, Medicaid reserves the right to recover funds they paid on your behalf. They can go after your remaining assets, even assets that were not initially countable, like your house.

However, your state cannot recover from the estate if you are survived by a spouse, have a child under age 21, or have a blind or disabled child of any age. When your spouse dies, so long as you do not have children who meet the criteria above, the state can still go after your estate.

An irrevocable trust can protect your assets against Medicaid estate recovery. Assets in an irrevocable trust are not owned in your name, and therefore, are not part of the probated estate.

When you or your spouse pass away, any assets put into an irrevocable trust are not included in the estate for the calculation of Medicaid recovery, the estate tax, or probate.

When The Elder Runs Out Of Money In Assisted Living What Happens

How Can I Take My Pension/SIPP? Your Retirement Income Options // Financial Planning UK

We often see that when families are shopping for assisted living facilities, the family will ask the assisted living facility representative “what happens if mom run out of money? Will we have to move him/her?” Here, the assisted living facility representative may tell them that mom/dad can stay in the facility on Medicaid. But we know this advice is not quite right because:

  • Even if mom/dad spend all of their money on assisted living care, this does not mean that Medicaid will be there due to the wait list that makes no guarantees on when the elder’s name comes to the top and
  • Medicaid generally provides only the $1,100-$1,500/month subsidy, so an expensive ALF may require more money than mom/dad’s income.

Trying to pay for an elder’s assisted living facility is even more difficult than trying to get care in a nursing home. Why is that? The long wait list for ALF Medicaid that will likely not correspond when/if the elder runs out of money. Here is an example, however, of what to do when the elder is in assisted living and is about to run out of money:

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How To Prevent Your Life Insurance Policy From Being Taken By Medicaid

The most advantageous option and advice would be to make sure that your estate is not the beneficiary of your life insurance policy. The Medicaid program will seek to take money from your estate, and this cannot be conducted if you choose to change the beneficiary of your policy. Therefore, instead of listing your estate as a life insurance beneficiary, list any individual or individuals that you wish to receive your life insurance policy proceeds.

Also, there are limitations as to what Medicaid can withdrawal from your estate. States can elect not to take money from an estate, which would usually only happen if the state determines that taking money from the estate would lead to hardship on survivors or it is not considered cost-effective to pursue any benefit reimbursement from the estate. Either way, there are ways to protect your proceeds from being taken by Medicaid, in which you list an individual or multiple individuals to receive your proceeds instead of your estate.

While this article can provide insight into any potential questions asked, it is also advised to meet with an elder law attorney before deciding to make any decisions about Medicaid or your life insurance policy. Your state may handle Medicaid different from others, which is why it is a must to meet with someone before making any permanent financial decisions.

Can Your Retirement Benefits Get Garnished For Debts

If you find yourself in a financial bind during retirement, you might wonder if your creditors can go after your Social Security check, pension, or 401 account. You worked hard for decades to earn the right to your retirement income, and now, because of massive bills from a medical crisis or another economic downturn, you are afraid you might lose all or a significant portion of these assets. Can your retirement benefits get garnished for debts?

The short answer is, it depends. One of the main factors is the type of debt or financial obligation. Your retirement income, like your monthly Social Security check, cannot get garnished for some debts. However, you can lose some of your benefits for other types of debts. The kind of retirement asset also matters, when it comes to garnishment. For example, the law treats Social Security benefits different than retirement savings, like a 401.

Social Security Benefits and Garnishments

If you owe back taxes, the government can take up to 15 percent of your Social Security check, even if this levy leaves you without enough money to pay your living expenses. The government can also take up to 15 percent of your Social Security check for delinquent student loans, but only to the point at which you still get at least $750 a month in Social Security benefits.

The Difference Between Garnishing Your Income and Your Bank Account

Protections for Your 401 Account


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Eligible For Medicaid And Receiving Pension Aid And Attendance In A Nursing Home

A single beneficiary whether veteran or surviving spouse who is receiving aid and attendance Pension in a nursing home and is also eligible for Medicaid will have his or her benefit reduced to $90 a month.

This rule only applies to a single person in a nursing home. For example a married veteran in a nursing home receiving Pension and eligible for Medicaid can still receive the full amount of benefit he or she has always been entitled to.

A single person in assisted living and eligible for Medicaid or a single person at home and eligible for Medicaid home care waiver can still continue to receive the full Pension benefit to which he or she is entitled without a reduction to $90 a month.

Again, this rule only applies under the following conditions:

  • a single beneficiary with no dependents in a nursing home AND
  • the single beneficiary with no dependents in a nursing home is eligible for Medicaid

How Your Assets Impact Eligibility

April 18, 2019 by Anthony Moccia

Besides income, your assets will be counted toward meeting eligibility requirements. Countable assets include checking and savings account balances, CDs, stocks, and bonds.

In most states, you can retain up to $2,000 as an individual and $3,000 for a married couple outside of your countable assets. However, these amounts may vary depending on the state in which you live.

Your home, your car, personal belongings, or your savings for funeral expenses remain outside of countable assets. If you can prove other assets are not accessible , they too are exempt. A house must be a principal residence and does not count as long as the nursing home resident or their spouse lives there or intends to return there.

Upon becoming eligible for Medicaid, all of the applicant’s income must be used to pay for the nursing home where the applicant resides. However, you may be allowed to keep a monthly “allowance” and a deduction for medical needs, such as private health insurance. The amount of the allowance varies depending on your living arrangements, type of nursing facility, and state rules. If you are married, an allowance may be made for the spouse still living in the home.

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Can The State Take My Social Security To Repay Medicaid’s Coverage Of My Husband’s Care

I dont know exactly how this works in your state, but in general state Medicaid agencies may only seek recovery of the expenses they paid from the property of the deceased beneficiary. In your case, you say that your husband left no assets to you. Therefore, there are no assets against which the state can assert its claim. They cannot touch your Social Security. To confirm this, Id recommend calling the office that sent you the letter.

For more on Medicaid’s power to recoup benefits paid, .

Local Elder Law Attorneys in Your City

Monetary Benefits For Assisted Living Medicaid

Medicaid for assisted living or in-home benefits has its limitations. This Medicaid program does not pay for all of the assisted living facility’s cost, for instance, nor does it pay for 24/7 in-home care. In Florida, Medicaid will generally help with assisted living costs by reducing the by $1,100-$1,500/month. Medicaid does not pay for the room and board for the ALF, but only can pay for the medical portion. Practically, not every facility will apply the Medicaid subsidy the same way, so be sure to talk to the assisted living facility about what expected costs would be. If the elder has low income, for instance, the family may need to assist with assisted living costs. Our law firm could help protect assets above the bare minimum, which can happen even when the elder is already in the nursing home.

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Can You Divorce A Spouse In A Nursing Home

Typically, clients, facing the situation of a spouse being admitted to anursing home with assets greatly in excess of the CSRA, may consider a divorce in order to protect his/her assets. Another option is Spousal Refusal, which allows the Community Spouse to retain all of the assets without filing for divorce.

Here’s An Introduction To Medicaid’s Complicated Rules On Eligibility For Nursing Homes And Home Health Care

Two ways to take your pension money a bit at a time

By Elizabeth Dickey

If you have limited assets and a low income and you need help paying for nursing home or assisted living care, Medicaid might help you pay for your care. Medicaid is a joint federal and state program, and the states have some flexibility in setting the benefits they will offer and the eligibility criteria for those benefits.

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Financial Abuse In Nursing Homes Is Common

As the number of dual-income households increases, fewer families can provide aging loved ones with the care they need. Understandably, this has led to an increase in the rate of nursing home admissions, both in Kentucky and across the United States. Unfortunately, the instances of financial abuse in nursing homes are also increasing at an alarming rate.

Elder abuse is shockingly common in the United States, with one in ten seniors reporting abuse of some type. However, financial abuse and exploitation are the most common types of elder abuse, accounting for between 12 and 35 percent of all reports. According to some studies, over four percent of all older Americans report experiencing financial abuse at some point in their life.

It is also important to understand that elder financial abuse is also underreported. Often, nursing home residents may not realize that they were victimized or fear that family members will not believe them. However, financial abuse is real, and the collective economic impact it has is tremendous. In fact, according to the National Council on Aging, the annual cost of financial abuse committed against older Americans ranges between $2.9 billion and $36.5 billion.


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