Important Facts About Medi-Cal: Treatment of Income

The basic Medi-Cal rule for nursing home residents is that they must pay all of their income, minus certain deductions, to the nursing home. The deductions include a $60-a-month personal needs allowance (this amount may be somewhat higher or lower in particular states), a deduction for any uncovered medical costs (including medical insurance premiums), and, in the case of a married applicant, an allowance for the spouse who continues to live at home if he or she needs income support. A deduction may also be allowed for a dependent child living at home.

In some states, known as “income cap” states, eligibility for Medi-Cal benefits is barred if the nursing home resident’s income exceeds $1,635 a month (for 2002), unless the excess above this amount is paid into a “(d)(4)(B)” or “Miller” trust. If you live in an income cap state and require more information on such trusts, consult an elder law specialist in your state.

For Medi-Cal applicants who are married, the income of the community spouse is not counted in determining the Medi-Cal applicant’s eligibility. Only income in the applicant’s name is counted in determining his or her eligibility. Thus, even if the community spouse is still working and earning $5,000 a month, she will not have to contribute to the cost of caring for her spouse in a nursing home if he is covered by Medi-Cal.