Nursing home spend-down in the state of New York
May 7, 2016 10:57 AM   Subscribe

What can a woman living in a nursing home in the state of New York do with her pension income so that she is not in a constant state of qualifying for financial aid / not qualifying for financial aid?

I'm asking for a friend so I don't really have all the facts at hand but the basic question is that a woman in the state of New York is living in a nursing home but receives a pension so that when the pension earnings accumulate to 14, 000 the woman's family is notified and they have to take her off the financial aid that is paying her nursing home bills. (I think it is Medicaid?)

Apparently the problem could be solved if she just spent the money but she doesn't need anything.

We understand that she could own a home and a car and still get Medicaid but that seems too complicated right now. Can you even pay a mortgage with your pension and still qualify for Medicaid?

We also understand she can not "gift" any of the pension money to her grandkids. But could she open a college savings fund with the pension money?

The reason I am asking is because the family has to do tons of paperwork every year when this happens and they are worn out. They have to do all the re-applying to Medicaid every year because of this.

What do other people do in this situation? The staff at the nursing home have hinted at some solutions but I think they can't out-right tell the family what to do because it would be financial or legal advice. Not sure.
posted by cda to Work & Money (5 answers total)
One of my sisters pre-planned and pre-paid for her funeral: she figured that since anything over x limit would disqualify her, and paying for her funeral costs were a totally acceptable way to spend down her assets, she planned & fully pre-paid for a pretty fancy sendoff. She was in Massachusetts, but the Federal limits should be the same.
posted by easily confused at 11:31 AM on May 7, 2016 [2 favorites]

A lot of people at the senior center where I work use pooled income trusts to avoid the spend down.
posted by sometamegazelle at 11:33 AM on May 7, 2016

This is an incredibly complicated legal question; your friend's family needs to consult a lawyer.
posted by jesourie at 11:35 AM on May 7, 2016 [5 favorites]

Specifically get an Elder Care lawyer. I just went through this with my aunt. In Massachusetts to qualify for Mass Health (Medicaid) there is something called a Pooled Trust, or D4C trust, that lets you put any funds into it over the $2000 max you're allowed to have, and use those funds to pay for things the person needs like maintenance/fees on her primary residence (if she has one outside of the nursing home). Her whole pension, except for some strange amount like $78 per month, goes to the nursing home/hospital every month. You really need a professional. Get power of attorney, spend some of her money on an actual attorney, and get advice.

Some things we spent her money pre-trust on: burial account ($1500), pre-paid her funeral (that's a separate amount), pre-paid a few months of condo fees and bills.

We're hopeful my aunt will be able to go home again some day, so we're maintaining her property with her trust money. Your situation sounds different, and each state has different laws, so definitely check with an elder care attorney. Talk to a couple before you pay any of them. My guy talked to us for an hour on the phone before we committed.
posted by clone boulevard at 1:42 PM on May 7, 2016

Definitely get with an elder care attorney on this. I don't know what the rules are in NY, but here in Indiana, a person receiving Medicaid assistance is allowed to have roughly $2000 in their bank account. They are also allowed to spend $50/month for personal needs out of that $2000.

Here in Indiana, Medicaid assistance is pro-rated, based on whatever regular income the person receives. In my mother's case, she was getting both Social Security and a pension payment. Those totals were figured against her total expenses at the nursing home (minus the $2000 she was allowed to have on account) She was expected to pay a share of her living expenses at the nursing home, and Medicaid picked-up the balance.

She had to re-qualify every year, of course.

If she had a spouse, she could keep a house and car for their use. Since dad had passed years ago, though, she had to liquidate those properties.

Basically, you have to pay your own way until such time that you need assistance to cover the nursing home bills, and that's when Medicaid kicks in.

It's an ugly, ungainly system, that's for sure.
posted by Thorzdad at 3:24 PM on May 7, 2016

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