Financial Help for In-Home Care and Nursing Home Care for Married Couples

Financial Help for In-Home Care and Nursing Home Care for Married Couples

Last updated: January 2008

The cost of nursing home care or in-home services can be an overwhelming expense for a couple. In Illinois, the cost of nursing home care may be paid by Medicaid. Or the cost of homemaker services to help a spouse remain in the community may be paid under the Illinois Community Care Program administered by the Illinois Department of Aging. Eligibility for these programs is based on financial need. The eligibility rules for married couples allow the spouse not applying for services to keep some assets and income. These special rules are called "spousal impoverishment" rules or protections, because they are designed to prevent a married couple from using all of their income and assets to pay for nursing home or in-home care while one of them is still living in the community. These rules are complex and confusing. We try to answer some of the common questions couples have when one spouse needs care, either at home or at a nursing home.

NOTE: these materials give you general information and are not meant to be a substitute for legal advice for your specific situation. The information is only for Illinois couples.

Who can get medical assistance?

Generally, if you have income and assets below the allowable limits, you may be eligible for Medicaid or the Community Care Program. There are also non-financial rules. Eligibility for non-citizens is restricted.

How do assets count?

All assets owned by either spouse must be reported when one spouse applies for assistance. Some types of assets are not counted when the agency determines eligibility. These are called "exempt assets". Examples of exempt assets include:

  • Your home
  • Clothing, furnishings and household goods
  • one car
  • $2,000 total in all other assets, such as bank accounts, certificates of deposit
  • $1,500 in cash value of life insurance policies and burial funds
  • Burial plot and equipment
  • Certain trust funds (ask an attorney for advice on whether a fund is exempt)

    All nonexempt assets are considered available to pay for nursing home or in-home services.

How much of my nonexempt assets may I keep and still qualify for benefits?

$2,000 for one person.

What nonexempt assets may my spouse keep?

A spouse may keep up to $109,560 in nonexempt assets. The maximum amount increases each year. 

What happens to any assets over the limit that my spouse and I have?

The spouse applying for assistance may give his or her assets to the other spouse up to the spousal asset allowance of $109,560.

Example: Sam is a resident of a nursing home. His spouse, Mary remains in their home. Sam's only asset is a $35,000 certificate of deposit. Mary's only asset is a $10,000 certificate of deposit. Sam and Mary also have $5,000 is their joint savings account. They have no other assets.  Mary's assets are below the spousal asset allowance of $104,400, and Sam's assets are above his asset allowance of $2,000, therefore Sam may give his $35,000 certificate of deposit and his interest in their joint savings account to Mary. After the transfer, Mary will still have less than the $104,400 asset limit. With all of the couple's assets ($35,000 + $10,000 + $5,000 = $50,000) in Mary's name, no assets are considered available to Sam when determining his Medicaid eligibility. However, Sam must in fact transfer his assets to Mary, and all the assets must be held in her name.

Another example: Jane is an applicant for in-home services from the Community Care Program. Jane lives with her husband, John. Jane has a $50,000 certificate of deposit and John has a $35,000 certificate of deposit. Deducting John's $35,000 from the $104,400 spousal asset allowance leaves $69,400. If Jane transfers her entire $50,000 over to John, John's total assets will still be below the spousal maximum of $104,400. Therefore, Jane may transfer the entire certificate of deposit to John and still be eligible for in-home services. As in the above example, the transfer must in fact be made and the assets must be held in John's name.

What does it mean to transfer assets for Medicaid purposes?

A transfer of assets occurs when the owner sells the asset for less than fair market value or gives it away.

How can I make an asset transfer to my spouse?

You can sign a document stating that you are giving your interest in the asset to your spouse. If the spouse who is applying for services cannot understand and execute legal documents, they cannot transfer assets on their own. If the spouse has appointed an agent under a durable power of attorney for property, that agent may sign such papers. If there is no power of attorney in place, guardianship may be the only alternative to get approval for the transfer of the assets. We advise that you to talk with an attorney in this event.

Click on the link below to learn more about powers of attorney and other advanced directives.

Wills, Living Wills, and Powers of Attorney

I've heard that there is a penalty if I transfer assets. May I transfer assets and still be eligible for benefits?

Yes. The transfers between spouses we have been talking about are allowed and do not affect eligibility.

Other allowable transfers include:

  • A transfer that occurred more than 60 months before a nursing home admission or an application for long term care Medicaid benefits or for the Community Care Program. If the applicant transferred assets to a trust, the look-back period is 60 months, not just 36 months
  • An asset which is transferred for fair market value
  • A transfer to a dependent, blind or a disabled child (or to another person for the child's benefit) 

Also, the applicant's homestead property may be transferred to one of these people without affecting eligibility

  • A spouse
  • A dependent, blind or a disabled adult child
  • A sibling with an equity interest in the home who lived in the home for at least one year before the date the applicant entered the nursing home
  • A child who has lived in the home continuously for at least two years before the parent's admission to the nursing home. This is allowed if the child has provided care which allowed the parent to live and home and prevented an earlier nursing home admission 

What will happen if I make a transfer of assets that is not allowed?

There is a penalty period for transfers of assets that are not allowed. The penalty period is based on the number of months you would have paid for services at the private pay rate if you still had the value of the asset you transferred.

Example: You give away a car worth $18,000 ten months before your admission to a nursing home, and the private pay rate at that nursing home is $3,000 per month; the penalty period for the transfer would be $18,000 divided by $3,000; or six months. The penalty period starts at the time the transfer occurred. In this example, the penalty period (six months) would have expired before you entered the nursing home, and would not affect your eligibility for Medicaid. If, on the other hand, you needed nursing care the month after you gave the car away, you would be ineligible for medical assistance for the first 5 months of your nursing home stay.

What income may my spouse keep?

A spouse in the community may keep income up to $2,739 per month. If the spouse remaining in the community has an income less than this amount, then the nursing home spouse can give part or all of his income to the community spouse to bring her income up to the $2,610 limit.

Example: You need to go into a nursing home and your monthly income includes $1,000 Social Security and $500 private pension. Your spouse's monthly income is $600. Your $1,500 income added to your spouses' income of $600 will total $2,100; below the maximum of $2,610. All of your combined monthly income as a couple will go to the spouse who will remain in the community.

What income can the nursing home spouse keep?

Only $30 per month. Any amounts not given to the community spouse, or that are over the spousal income allowance must be paid to the nursing home or to the Community Care provider. The rest of the cost of the care is paid by Medicaid.

Will my spouse be responsible for my support?

Yes, if your combined income is more than the income allowance of $2,610; the amount over must be used to help pay for the nursing home or in-home care.

Will Public Aid ask us to pay back the help they give us?

There are two ways that Public Aid will try to get back money it has paid for nursing home care. One way is by making a claim on your estate after your death asking for repayment of the Medicaid benefits it has paid while your were in the nursing home. It can also file a claim against the estate of your spouse after your spouse's death for the benefits it paid for you at the nursing home. The Department can also obtain a lien on real estate owned by you or your spouse. The Department cannot force a sale of the home that the nursing home resident's spouse is living in.

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