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Florida Nursing Home Medicaid Income

A Medicaid applicant can only have $2,313 (2019) of income in their name per month.

If they are a penny over—$2,313.01—then they do not qualify for Medicaid income-wise. This presents a big issue for a lot of Medicaid applicants as a $2,313 is quite a low bar for qualifying for Medicaid.

The first question that needs to be answered is:

What is income?

The Florida Medicaid Access manual defines income as the following:

“Income is cash received at regular intervals from any source such as wages, benefits, contributions, and rentals. Income means all income, earned as well as unearned, from any source unless specifically excluded.”

Income includes both earned and unearned income. What in the world is unearned income? Well, earned income would be a salary, wages, commission, or profit from a business—basically any income where you perform services to earn the income.

Unearned income is when you do not perform any services to earn the income. Unearned income includes retirement payments, annuities, pensions, dividends, royalties, social security income (SSA), social security disability (SSD), and supplemental security income (SSI).

EXAMPLE:

Joe makes $500 per month in royalties from a book he wrote about his adventures on his houseboat. Because Joe is no longer performing services to earn the $500 per month, the income from his royalties is considered unearned income and is counted towards the $2,313 (2019) income limit for Florida Medicaid.

TIP:

Florida Medicaid is only concerned with your gross income per month. Premiums you pay or amounts withheld for tax purposes must be included in your calculation when figuring out whether you’re above the $2,313 (2019) income limit for Florida Medicaid.

CAUTION:

It’s extremely important to stop tax withholdings from your income sources when you qualify for Medicaid. Any money that is withheld for tax purposes will just be wasted monies.

Does Florida Medicaid Care About Gross or Net Income?

A common mistake when calculating a Medicaid applicant’s income is that the gross income is not totaled. Most people look at the income received in the Medicaid applicant’s bank account each month and assume that is the gross income.

Unfortunately, income received in the Medicaid applicant’s bank account is usually the net income—meaning that some tax was withheld or a premium was paid before the monthly income was deposited into the bank account.

Medicaid only cares about the gross income of an applicant. Most pensions, IRA required minimum distributions, and social security payments have some form of withholding or payment for health benefits. This means that when you calculate a Medicaid applicant’s income, you must make sure to use the gross income when calculating whether the applicant qualifies or not.

EXAMPLE:

Joe’s sole source of income is social security. His children look at his bank account to see that he receives $2,200 in social security every month. Joe’s children use this number to apply for Medicaid benefits for Joe since Joe’s income is less than $2,313 per month according to Joe’s bank statements.

RESULT:

Joe is denied for Medicaid because his income is over $2,313 per month. Joe now has to private pay for one month of nursing home expenses totaling $9,500 and his children are completely dumbfounded.

They call a local competent elder law attorney and realize that social security automatically deducts $135.50 per month for Medicaid Part B premiums. Joe’s actual income for Medicaid purposes is $2,335.50 per month, which means that Joe is not eligible for Medicaid unless he does some additional planning for his income.

CAUTION:

Never rely on bank statements for determining a Medicaid applicant’s gross income. Always verify the gross income by looking at tax documents (e.g. a 1099), or by calling the institution or government agency to verify the actual gross distribution before taxes or any other payments.

Here are some common deductions that are withheld from gross income that are considered income to the applicant:

  1. Premiums for health insurance or hospitalization,
  2. Premiums for life insurance;
  3. Federal and state income taxes;
  4. Optional deductions;
  5. Child support

Do Gifts Count as Florida Medicaid Income?

What about the gift that you give your father for his birthday? This can’t be considered income, right? As crazy as it sounds irregular gifts such as birthday gifts can count as income. The rule is that the gift cannot be in excess of $60 in any calendar quarter, and the gift cannot be anticipated.

EXAMPLE:

Delilah always gives Jimbo a $100 gift card to Amazon on his birthday. The gift counts as income to Jimbo because it is both anticipated—Jimbo receives the gift each year on his birthday—and the $100 is in excess of the $60 allowed in any calendar quarter.

CAUTION:

While there is no way for Medicaid to track down a $100 gift to Amazon, this section just shows that you should be careful of what you give to someone who is currently receiving Medicaid.

Other Florida Medicaid Income Questions

Here are some common income questions we see that didn’t justify creating a whole new section to answer:

Question: How do you determine income when the bank account is owned jointly between a Medicaid applicant and a spouse or a child?

A: If the income is deposited in the name of the non-Medicaid applicant account holder, then the income is not considered income for the Medicaid applicant.

EXAMPLE:

Jimbo and Delilah have a joint bank account at SunTrust. Delilah receives her monthly paychecks from selling her pottery on Ebay. This income is not considered income for Jimbo because the paychecks are made out to Delilah.

Question: Does the spouse’s monthly income who stays in the community (known as the community spouse) affect the Medicaid applicant spouse’s income?

A: No. The community spouse’s income does not affect the Medicaid applicant spouse’s income calculation for Medicaid eligibility. The community spouse’s income will affect the amount of spousal diversion.

Question: What About Payments to Joint Owners?

Question: Are VA benefits considered income?

A: Yes. VA benefits are generally counted as income for the Medicaid applicant except for payments made for Aid and Attendance, housebound allowance, and unreimbursed medical expenses.

Bishop Toups

Bishop L. Toups is an estate planning, elder law, and tax attorney in Southwest Florida. He helps clients with their various estate planning needs and helps clients navigate the Medicaid system here in Florida. He also represents clients nationwide and worldwide in front of the IRS. Bishop is also a V.A. accredited attorney and helps Veterans obtain benefits from the Department of Veterans Affairs.