Income First: New Jersey joins New York

This is not a prescription for living. It does represent an approach taken in New York and New Jersey in calculating the income of a spouse living at home when the other spouse is in a nursing home. Spouses living at home (a "community spouse") receive protection under the Medicaid program which is not available to spouses where both are living at home and one spouse wants Medicaid to pay for home care services.

For example, in NY a communty spouse, when the other spouse is a resident of a nursing home, is able to retain a home of unlimited value, a maximum of $81,960 of other assets, and income of $2,049 per month. Lets say that the spouse in the nursing home (the "institutionalized spouse") has $2,000 a month in income from social security and a pension, the community spouse has $120,000 of assets (not including the home) but only $1,300 a month of income. Is the community spouse able to keep more than the $81,960 of other assets (the $120,000) in order to generate income to close the gap between her income of $1,300 and $2,049 or must she take a portion of her husband’s income, to wit, $749 per month, to give her the $2,049 per month. A New Jersey federal appeals court recently followed the New York courts and determined that the community spouse may not keep the excess assets to generate needed income but must, instead, use the institutionalized spouse’s income to cover the deficiency in the actual income available to the community spouse. So what do you do?

Take a look at our article about private annuities and you will see precisely what is needed. You’ll see an approach that we have been using to protect the additional assets and create our own source of creating additional income for the community spouse.