Every year we release the key dollar amounts that are frequently used in elder law, estate administration and special needs trust planning, including Medicaid figures, Medicare premiums, Social Security Disability and Supplemental Security Income. Be sure to check back often, as we will add any information that has not yet been released and update the page when changes occur.

Medicaid

Medicaid is the primary funding source for long-term care for millions of disabled and elderly Americans, providing vital long-term care coverage to those who qualify for the benefit. Important figures for 2020 follow:

Medicaid Individual Resource Allowance: $2,000.00.

Resource Allowance for a Couple who both reside in a facility: $3,000.00.

Medicaid Community Spouse Resource Allowance:

  • Minimum: $25,728
  • Maximum: $128,640

Medicaid Monthly Maintenance Needs Allowance: 

  • Minimum: $2,155 ($2,693.75 for Alaska and $2,478.75 for Hawaii) beginning July 1, 2020
  • Maximum: $3,216

Medicaid Monthly Personal Needs Allowance: $50.00/month

Medicaid Divestment Penalty Divisor: $351.84 per day, or $10,701.80 per month

Medicaid Income Cap Limit: A “Miller Trust,” also known as a “Qualified Income Trust,” is required when income exceeds $2,349.00/month in “income cap” states such as New Jersey.

Principal Residence Equity Limits: Minimum: $595,000;  Maximum:  $893,000

Community Spouse Monthly Housing Allowance: 634.13 (Until 7/1/20)

Standard Heating and Utility Allowance: $542.00 (Until 7/1/20)

For complete information about the 2020 Supplemental Security Income (SSI) and Spousal Impoverishment Standards, see the following chart:

Download (PDF, 142KB)

Penalty Information In New Jersey For Medicaid:  Individuals in New Jersey are allowed to keep $2,000 when they apply for Medicaid to pay for long term care costs. If applicants own assets in excess of $2,000, they must spend down the amount over $2,000 on care costs before they will be eligible for Medicaid. It is important to note, that individuals are not allowed to give gifts of any amount for a period of 5 years (60 months) prior to applying to Medicaid. This 5 year period is called the “look-back” period.

If a gift of any amount is given in New Jersey during a period of 5 year “look-back” period before applying to Medicaid, a penalty period will be imposed. Medicaid will not pay for care until the penalty period is over. The penalty is calculated by taking the total amount of any gifts given during the 5 year “look-back” period, and dividing it by $10,701.80 per month (or $351.84 per day), a calculation which yields the number of months before Medicaid kicks in. The penalty period begins when the applicant is otherwise eligible for Medicaid “but for” the gift.

The average cost of a private room in a nursing home in New Jersey is $12,000, so penalties can become very costly for a family that has not planned appropriately for Medicaid. If an individual’s assets are more than $2,000, they should learn about Medicaid Planning strategies. If you have multiple assets and are looking to access Medicaid, it may make sense to speak with a Certified Elder Law Attorney in New Jersey.

Veterans Needs-Based Pension Program

The Department of Veterans Affairs (VA) needs-based pension program is available to help financially-needy veterans who suffer from non-service-connected disabilities. There are three (3) levels of VA pension benefits available: (1) the basic pension, (2) “Housebound” benefits and (3) “Aid and Attendance” benefits.

Based upon a veteran’s income, resources and care costs, the VA Pension program can provide up to the following maximum annual and monthly VA pension benefits in 2020:

Level 1: Basic Veterans Pension / Basic Survivors Pension
  • The maximum benefit amount for a veteran who does not have a spouse or dependent child is $13,752 / year ($1,146 / month).
  • The maximum benefit amount for a married veteran is $18,008 / year ($1,501 / month).
  • For a surviving spouse without any dependent children, the maximum benefit amount is $9,223 / year ($769 / month).
Level 2: Housebound Pension for Veterans / Surviving Spouses

The benefit amounts below are the maximum monetary amounts a veteran or survivor spouse may be able to receive for Basic Veterans / Survivor Pension plus Housebound Pension.

  • The maximum benefit amount for a veteran who does not have a spouse or dependent child is $16,805 / year ($1,400 / month).
  • The maximum benefit amount for a veteran with a spouse is $21,063 / year ($1,755 / month).
  • The maximum benefit amount for a surviving spouse under the Housebound Pension is $11,273 / year ($939 / month).
Level 3: Aid & Attendance Pension for Veterans / Surviving Spouses

The amounts below are the maximum benefit amount a veteran or surviving spouse may be entitled to for Basic Veterans / Survivor Pension plus Aid & Attendance Pension.

  • The maximum benefit amount for a veteran who does not have a spouse or dependent child is $22,938 / year ($1,912 / month).
  • The maximum benefit amount for a married veteran is $27,194 / year ($2,266 / month).
  • The maximum benefit amount for a surviving spouse is $14,761 / year ($1,230 / month).
  • The maximum benefit amount for a veteran married to a veteran (both with A&A Pension): $3,032 / month

On October 18, 2018, the VA amended the regulations governing the VA pension program, adopting new rules which mirror the Medicaid rules. For the first time, eligibility for the pension program requires a net worth determination, establishes a look-back period and imposes penalties for asset transfers.  New requirements also identify the medical expenses which may be deducted from countable income for VA’s needs-based benefit programs. The new rules will make qualifying for VA pension benefits more challenging than ever.  

Medicare Deductibles, Premiums and Co-Pays

Medicare is the federal government program that provides health insurance if you are 65+, under 65 and receiving Social Security Disability Insurance (SSDI) for a certain amount of time, or under 65 and with End-Stage Renal Disease (ESRD). Medicare has been protecting the health and well-being of American families and saving lives for five decades.

The Centers for Medicare and Medicaid Services unveiled the new rates for 2020, as set forth below:

Medicare Part A Deductible for 2020: $1,408 deductible for each benefit period

Co-payments for hospital stays:

  • Day 1-60: $0 co-insurance
  • Day 61-90: $352 per day in 2020
  • Day 91 – 150: $704 per day in 2020
  • All costs for each day beyond 150 days

Co-payments for skilled nursing facility stay, days 21-100: $176 per day in 2020

Part B Deductible in 2020: $198

Part B Premium in 2020: $144.60 per month

Part B premiums for higher-income beneficiaries:

  • Individuals with annual incomes between $87,000 and $109,000 and married couples with annual incomes between $174,000 and $218,000 will pay a monthly premium of $202.40.
  • Individuals with annual incomes between $109,000 and $136,000 and married couples with annual incomes between $218,000 and $272,000 will pay a monthly premium of $289.20.
  • Individuals with annual incomes between $136,000 and $163,000 and married couples with annual incomes between $272,000 and $326,000 will pay a monthly premium of $376.
  • Individuals with annual incomes between above $163,000 and less than $500,000 and married couples with annual incomes above $326,000 and less than $750,000 will pay a monthly premium of $462.70.
  • Individuals with annual incomes above $500,000 and married couples with annual incomes above $750,000 will pay a monthly premium of $491.60

For Medicare’s “Medicare 2020 costs at a glance,” click here.

Social Security and Supplemental Security Income

The Social Security Administration (SSA) has announced increases in the 2020 cost-of-living adjustment (COLA) for Social Security and Supplemental Security Income (SSI) benefits.

Social Security and SSI beneficiaries will receive a 1.6% COLA for 2020.

SSA also announced an increase in the SSA maximum taxable amount to $137,700.

SSI Federal Payment Standard: The federal benefit amount for an individual eligible for SSI in 2020 will increase to $783 per month. New Jersey supplements the federal benefit amount by $31.25 per month, for a total monthly benefit of $814.25 per month for an individual. The federal benefit amount for an eligible couple will increase to $1,175 per month which, when the New Jersey supplement is factored in, amounts to a total monthly benefit of $1,200.36 per month for an eligible couple.

The table below lists the combined federal and state SSI payment amounts for eligible New Jersey residents:

  • Person living alone or with others in own household – $814.25
  • Person living with spouse who is not eligible for SSI – $936.00
  • Person living in someone else’s household and receiving support and maintenance – $566.31
  • Person living in licensed residential health care facility – $993.05
  • Person living in public general hospital or Medicaid-approved long-term health facility – $50.00
  • Couple living alone or with others in own household – $1,200.36
  • Couple living in someone else’s household and receiving support and maintenance – $876.43
  • Couple living in licensed residential health care facility – $1,913.36

Retirement Earnings Test Exempt Amounts

  • Under full retirement age*

2020: $18,240/yr. ($1,520/mo.)
*One dollar in benefits will be withheld for every $2 in earnings above the limit.

  • The year an individual reaches full retirement age**            

2020: $48,600/yr. ($4,050/mo.)
** The 7.65% tax rate is the combined tax rate paid for Social Security and Medicare. The Social Security portion (OASDI) is 6.20% on earnings up to the applicable taxable maximum amount (see below). The Medicare portion (HI) is 1.45% on all earnings. Also, as of January 2013, individuals with earned income of more than $200,000 ($250,000 for married couples filing jointly) pay an additional 0.9 percent in Medicare taxes. The tax rates shown above do not include the 0.9 percent.

Substantial Gainful Activity (SGA) Thresholds

  • Disabled: $1,260/mo. in 2020
  • Blind: $2,110/mo. in 2020
  • Trial Work Period: $910/mo. in 2020
Social Security Fact Sheet for 2019 – 

Download (PDF, 85KB)

Federal and State Estate and Gift Taxes

Federal Estate Tax Threshold: $11.58 Million per person, $23.16 Million for married couples

Federal Gift Tax Exclusion: $15,000

Lifetime Federal Tax Exclusion for Gifts: $11,580,000

Generation-Skipping Federal Transfer Tax Exemption: $11,580,000

NJ Estate Tax: Eliminated as of 1/1/2018

NJ Inheritance Tax: Class A & E Exempt

NJ Gift Tax: $00.00

Income Taxes for Trusts and Estates

If Taxable Income is Between: The Tax Due is:
$0 – $2,600 10% of taxable income
$2,601 – $9,450 $260 + 24% of the amount over $2,600
$9,451 – $12,950 $1,904 + 35% of the amount over $9,450
$12,951 $3,129 + 37% of the amount over $12,950

 

Long-Term Care Premium Deductibility Limits for 2020

Premiums for qualified long-term care insurance policies are tax deductible to the extent that they, along with other unreimbursed medical expenses (including Medicare premiums), exceed 10 percent of the insured’s adjusted gross income in 2020.

These premiums — what the policyholder pays the insurance company to keep the policy in force — are deductible for the taxpayer, his or her spouse and other dependents. (If you are self-employed, the tax-deductibility rules are a little different: You can take the amount of the premium as a deduction as long as you made a net profit; your medical expenses do not have to exceed a certain percentage of your income.)

However, there is a limit on how large a premium can be deducted, depending on the age of the taxpayer at the end of the year. Following are the deductibility limits for 2020.

Attained age before the close of the taxable year                     Maximum deduction for year

40 or less                                                                                                     $430

More than 40 but not more than 50                                                              $810

More than 50 but not more than 60                                                              $1,630

More than 60 but not more than 70                                                              $4,350

More than 70                                                                                                 $5,430

For these and other inflation adjustments from the IRS, see below:

Download (PDF, 100KB)

For additional information concerning New Jersey elder law, visit:

NJ Elder Law and Estate Planning Services

For additional information concerning special needs trusts and disability planning, visit:

NJ Special Needs Trusts and Disability Planning