Income Allowances

Maintenance Needs

LTC individuals are allowed $35 for personal and incidental needs when they will remain in LTC an entire calendar month.

The maintenance need for persons living in the home must be used when the client is in LTC for only a portion of the month.

Exception: An Institutionalized Spouse, must be in his/her own MFBU at the beginning of the Continuous Period of Institutionalization. The Institutionalized Spouse may provide an income allocation to the Community Spouse beginning with the month of admission. The Maintenance Needs for the Institutionalized Spouse beginning with the first month of admission must be $35.

Medicare

When determining the amount of income that is actually available for allocation, the EW must consider if Buy-In is in effect. Individuals who pay Medicare premiums are allowed these deductions in the budget computation.

Only the Medicare premium of the Institutionalized Spouse can be deducted from his/her budget when Buy-In is not yet in effect. However, if the Community Spouse later applies for MC, then his/her Medicare premium would be an allowable deduction in the budget for the Community Spouse.

Other Health Care (OHC) Premiums

The premiums for private health insurance for family members are to be deducted from the budget of the person who actually pays it. The Institutionalized Spouse may be allowed a deduction for the premium paid for the private coverage for his/herself and his/her Community Spouse, even though the Community Spouse is not requesting or receiving MC, as long as it is paid with the LTC individual’s income.

When the OHC premium is paid by the Community Spouse and reimbursed by the Institutionalized Spouse, the OHC premium deduction can be allowed in the Institutionalized Spouse’s budget as long as this situation is clearly documented in Journal page.

ExampleExampleA case consists of a married couple. The husband is in a LTC facility and his wife lives at home and is not requesting MC. The Community Spouse maintains OHC for both of them and the monthly premium is being deducted automatically from her retirement/payroll check. Per clients’ statement, the Institutionalized Spouse reimburses his wife for the full cost of the OHC.

Therapeutic Wages

Certain LTC individuals who live and work in LTC facilities may retain a portion of their therapeutic wages in excess of the Maintenance Need Level. Therapeutic Wages are wages earned by the individual when ALL the following conditions are met:

The client’s physician, with no financial interest in the facility, has prescribed the work as therapy,
The individual is employed within the same LTC facility where he/she is residing,
The individual's employment does not displace any existing employees, and
The individual has resided in a LTC facility for a continuous period beginning September 1979 or earlier.

Therapeutic Wages must be verified by obtaining a written statement from the facility attesting that all of the above criteria has been met at both intake and redetermination.

The amount of earned income the LTC individual is be allowed to retain must be the LESSER of:

70% of the gross therapeutic wages, or
70% of the maintenance need level for a non-institutionalized person, or if the LTC individual is included in his/her family’s MFBU, the maintenance need for a family of corresponding size.

Note: The 70% disregard amount must NOT be treated as exempt income or a deduction. It must be added to the maintenance need when completing the MC 176-M (LTC). Document the computation on the MC 176-M (LTC) and in the Journal page.

Upkeep of Home

An allowance for the upkeep of a home must be allowed when all of the following conditions are met:

The Community Spouse or family of the person who has is in LTC is not living in the home, and
The home, whether rented or owned by the person who is in LTC, is actually being maintained for the return of the person in LTC, and
There is a verified medical determination that the person in LTC will return home within six months of the date of institutionalization.

EWs must set up a case alert for the six-month follow up.

The amounts allowed for upkeep of a home is the lesser of the actual cost and the amounts below:

Upkeep Allowance is. . .	If . . .
$209,	The LTC individual has been living alone in the home.
$138,	The home is shared with individuals who the LTC indi- vidual is not legally responsible for.
$138,	The Institutionalized Spouse and Community Spouse have been living together and both have moved to a SNF and will return home within 6 months.

Support of a Disabled Relative

Individuals in LTC are allowed to keep part of their income to pay for the support of a disabled relative when all of the following conditions are met:

The disabled relative is not the Community Spouse or child,
The LTC individual has contributed and will continue to contribute to the support of the disabled relative on a regular basis.

The amount allowed for support shall be the lesser of:

The actual amount contributed.
The Maintenance Need Level for one person, minus the disabled relative's net income.

Veterans’ Aid and Attendance

Veterans’ benefits must be verified using the “Military Verification and Referral Form” (MC 05) or the actual Veterans’ Administration (VA) award letter.

Aid and Attendance (A&A) cash benefits received by a veteran in LTC are:

NOT included in the division of community income.
Included in the share of cost determination if not otherwise exempt.

Note: When the VA is paying the cost of the LTC facility, the individual’s resources may not exceed $1,500 or the VA benefits will be suspended until the resource level falls below $500. If the VA is not paying the cost of the LTC facility, then the VA benefits are not subject to the $1,500 limit.

Retroactive Payments

Veteran’s lump sum retroactive payment is treated as follows:

Determine the number of months the veteran was at home and the number of months the veteran was in LTC and on MC during the retroactive period. Determine the countable A&A portion of the lump sum by multiplying the rate by the number of full months in LTC.
For the months the veteran was at home, the A&A portion should be disregarded as income in the month of receipt and treated as property thereafter.
For the months the veteran was in LTC and on MC the A&A payment should apply to the cost of LTC services and is subject to repayment. Increase the share of cost by an amount equal to the A&A received while the individual was in LTC.

ExampleExampleIn July, assume a veteran (at home or in LTC) received a lump sum VA payment of $3,000 total for March, April and May; and the amount of the A&A award is $300 per month. Assume the veteran was at home in March and in LTC in April and May. The $900 ($300x3) A&A lump sum is allocated as follows: The $300 is reimbursement of A&A payments for March, the month when the veteran was at home. It is not treated as income nor property for July but is property thereafter. The $600 is reimbursement for April and May when the veteran was in LTC. It is not treated as income nor property for July. The veteran must be added to the client’s share of cost in a future month. The remaining $2100 ($3000 - $900) is a lump sum social insurance payment and treated as property.

Institutionalized Veteran with NO Community Spouse or Minor Child(ren)

The first $90 of A&A payments received by a veteran in LTC who does NOT have a Community Spouse and/or minor child(ren) at home is exempt. If the A&A payments exceeds $90, the portion of the payment in excess of $90 is counted when determining the Share of Cost.

Institutionalized Veteran with a Community Spouse and/or Minor Child(ren)

The entire A&A payment received by a veteran in LTC who DOES have a Community Spouse and/or minor child(ren) at home is exempt. In addition, the A&A payment received by an institutionalized widow of a veteran who has a minor child(ren) at home is exempt.

$90 VA Pension, Veteran in LTC

The $90 flat VA pension of veterans in long-term care (LTC) who have no Community Spouse or children in the home is exempt. In addition, the flat $90 VA pension of a surviving Institutionalized Spouse is exempt.