Will I Lose My Social Security if I Go to a Nursing Home?

Entering a nursing home raises many questions about how it affects financial resources like Social Security benefits. Social Security benefits generally do not stop when an individual enters a nursing home. However, their use to cover long-term care costs becomes more complex, often involving government assistance programs like Medicaid.

Your Social Security Benefits and Nursing Home Care

Social Security benefits are typically applied towards the cost of care, especially if the resident relies on financial assistance. Nursing facilities are generally prohibited from seizing a patient’s income or assets unless their accounts are in default. A nursing home can be designated as a “representative payee” to directly receive Social Security and other payments on behalf of the resident.

For individuals receiving Supplemental Security Income (SSI), the benefit amount can be significantly reduced if Medicaid covers more than half the cost of their nursing home stay. In such cases, the SSI benefit is typically limited to $30 per month. For short-term stays of 90 days or less, individuals may continue receiving their full SSI benefit. Social Security Disability Insurance (SSDI) and Social Security retirement benefits are not reduced during a nursing home stay if Medicaid is not involved in paying for care.

A resident in a Medicaid-funded nursing home is allowed to keep a small portion of their income, known as a “personal needs allowance” (PNA). This allowance covers personal expenses not provided by the nursing home, such as toiletries, clothing, or snacks. States can set higher allowances, which typically range from $30 to $200 per month. The remaining portion of the resident’s Social Security income, along with any other income, is then contributed towards the nursing home costs, with Medicaid covering the balance.

Medicaid’s Role in Paying for Nursing Home Care

Medicaid serves as a primary financial safety net for many individuals who need long-term nursing home care after their personal funds are exhausted. Care in a nursing home can be very expensive, often exceeding private resources. As a joint federal and state program, Medicaid eligibility rules and financial limits vary by state.

To qualify for Medicaid to cover nursing home costs, an individual must meet strict income and asset limits. For a single applicant, the asset limit is generally low, often around $2,000 in countable assets in most states. Certain assets, such as a primary residence (up to a certain equity limit) and personal belongings, may be exempt from calculation. Income limits for nursing home Medicaid are also specific and can vary; in 2024, some states have an income cap around $2,829 per month.

If an applicant’s income exceeds the state’s Medicaid limit, they may still qualify through a process called “income spend-down” or by using a Qualified Income Trust (QIT). In “income cap” states, a QIT is used to deposit income above the Medicaid limit, allowing the individual to become income-eligible. The funds in this trust are then directed towards nursing home care. The “spend-down” process involves using excess income on medical expenses, including nursing home costs, until the individual’s net income falls below the Medicaid threshold, at which point Medicaid covers the remaining charges.

Medicaid also implements a “look-back period” to prevent individuals from giving away assets to qualify for benefits. This period is typically 60 months (five years) immediately preceding the Medicaid application. Any uncompensated transfers of assets during this time can result in a penalty period of Medicaid ineligibility, delaying coverage for nursing home care.

Protecting Your Spouse’s Financial Security

When one spouse enters a nursing home and applies for Medicaid, special rules are in place to prevent the “community spouse”—the one remaining at home—from becoming impoverished. These rules aim to ensure the community spouse can maintain financial stability and continue living independently.

A key protection is the Community Spouse Resource Allowance (CSRA), which permits the community spouse to retain a portion of the couple’s combined assets. In 2024, the maximum amount a community spouse can keep is $154,140, though a federal minimum of $30,828 applies, and specific amounts can vary by state. This allowance is calculated based on the couple’s total countable assets at the time of Medicaid application. All assets, regardless of whose name they are in, are typically considered jointly owned for this purpose.

Another important protection is the Minimum Monthly Maintenance Needs Allowance (MMMNA). This provision allows a portion of the institutionalized spouse’s income, including their Social Security benefits, to be transferred to the community spouse if the community spouse’s own income falls below a certain threshold. For 2024, the minimum MMMNA is $2,465 per month, with a maximum of $3,853.50 per month. These figures are adjusted annually. This transfer of income helps ensure the community spouse has sufficient funds to cover their living expenses.

The primary residence is generally exempt from Medicaid asset calculations if the community spouse lives there. Home equity limits still apply, which for 2024 range from $713,000 to $1,071,000, varying by state. These rules collectively aim to strike a balance, allowing the institutionalized spouse to receive necessary care while safeguarding the financial well-being of the spouse remaining in the community.