AWCA Resource Center
AWCA Resource Center

Medicaid Specials

Spousal Impoverishment Rules

These rules are designed to protect the financial well-being of the spouse remaining at home (Community Spouse) while the other spouse receives Nursing Home care or Home Care through MLTSS(Long Term Care), preventing the community spouse from falling into poverty.

Spouses do not need to file a separate application for Spousal Impoverishment protections; they are automatically evaluated during your Medicaid (MLTSS) application process

*OBBBA (One Big Beautiful Bill Act) implementations may affect eligibility and program details.

CSRA (Community Spouse Resource Allowance: Asset Protection)

The CSRA allows the community spouse to retain a certain amount of assets without affecting the applicant’s Medicaid eligibility.

  • Total Assets: Calculated by combining all countable assets (cash, savings, stocks, etc.) owned by either or both spouses.
  • Retention Limit: In New Jersey, the community spouse can retain up to $162,660 in 2026.

     

*Spend Down: If combined assets exceed the allowed limit, the excess must be “spent down” on medical expenses, home repairs, or funeral trusts before the applicant can be approved for Medicaid.

MMMNA (Minimum Monthly Maintenance Needs Allowance: Income Protection)

MMMNA ensures that if the community spouse has little to no income of their own, a portion of the applicant spouse’s income can be transferred to them. *New Jersey income standards; vary by by state Minimum Allowance: If the community spouse’s monthly income is below $2,705.00, they can receive an allocation from the applicant’s income to bridge the gap.

  • *The current standard of $2,705.00 is effective July 1, 2026. This minimum guaranteed amount is subject to change every July 1st based on updates to the Federal Poverty Level (FPL).
  • Maximum Allowance: If the community spouse has high shelter expenses (rent, mortgage, taxes, etc.), they may be allowed to keep up to $4,066.50 per month.
  • Benefit: This transfer reduces the applicant’s share of cost (the amount they must pay the facility), helping the household retain more total income.

Estate Recovery

While the home is generally excluded from the asset limit during the spouse’s lifetime, strategic planning is required due to the Estate Recovery program.

  • Exemption During Residency: The home is exempt only if the applicant or their spouse resides in it, a minor or disabled child resides in it, or if the applicant expresses an “intent to return” and the home equity is $1,130,000 or less. 
  • Estate Recovery: After the death of a Medicaid beneficiary, the State may attempt to recover the costs of care from the deceased’s estate (most commonly the home). In New Jersey, the state may file a claim for Estate Recovery for Medicaid benefits received after the age of 55.
  • Conditions for Postponement of Recovery:
    • If a surviving spouse still resides in the home.
    • If there is a surviving child under age 21, or a child who is blind or permanently disabled.
    • Caretaker Child Exception: If a child lived in the home for at least 2 years before the parent’s institutionalization and provided care that delayed the need for a nursing home, the home may potentially be transferred to that child without penalty.


*Statute of Limitations: The right to recovery is permanently forfeited once the period for filing a claim (e.g., one year) has expired.

*$1M Home Equity Cap: A unified federal $1M home equity cap for Medicaid LTC eligibility with no inflation adjustments effective Jan 1, 2028. (OBBBA Update).

Spousal Asset and Income Protection Standards (2026, New Jersey)

CategoryItemStandard AmountRemarks
Asset ProtectionCSRA (Max Asset Limit)$162,660Excludes home; kept by community spouse
Income ProtectionMMMNA (Monthly Income)$2,705.00 – $4,066.50Adjustable based on shelter costs
Applicant LimitIndividual Asset Limit$2,000Limit for the spouse receiving care
Home ExemptionHome Equity Limit$1,130,000 (NJ)Based on the home's net equity value

Contact

  • AWCA provides expert consultations free of charge (201-862-1665 / info@awcanj.org).

Resources

Resources

Medicaid Specials