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 2021 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: $26,076
- Maximum: $130,380
Medicaid Monthly Maintenance Needs Allowance:
- Minimum: $2,155 ($2,693.75 for Alaska & $2,478.75 for Hawaii) (Until July 1, 2021)
- Maximum: $3,259.50
Medicaid Monthly Personal Needs Allowance (PNA): $50.00/month for recipients in a nursing home, $117.75/month for assisted living facility residents and $2,382/month for recipients of Medicaid-paid home health aides.
Medicaid Divestment Penalty Divisor: Effective April 1, 2021, the penalty divisor has increased to $361.20 per day, amounting to $10,986.50 per month and $131,838 per year. For all cases received on or after April 1, 2021, the new daily penalty divisor of $361.20 will be used in the calculation. The penalty divisor was $357.67 per day through March 31, 2021.
Medicaid Income Limit: A “Miller Trust,” also known as a “Qualified Income Trust,” is required when income exceeds $2,382.00 / month in “income cap” states such as New Jersey. In 2021, applicants in assisted living facilities must have monthly income of at least $826.30 which is the room and board fee.
Principal Residence Equity Limits: Minimum: $603,000; Maximum: $906,000
Community Spouse Monthly Housing Allowance: 646.50 [Alaska $808.13; Hawaii $743.63] (Until July 1, 2021.
Standard Heating and Utility Allowance: $548.00
See the following new income standards chart for all NJ Medicaid programs, retroactively effective January 1, 2020 for all programs:
For complete information about the 2021 Supplemental Security Income (SSI) and Spousal Impoverishment Standards, see the following chart:
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 $10,879.13 per month (or $357.67 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 NJ Division of Medical Assistance and Health Services (DMAHS) released Medicaid Communication No. 21-01 which provides new information relevant to applications for Medicaid Long Term Services and Supports (MLTSS) benefits:
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 2021:
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 $13,931 / year ($1,236.92 / month).
- The maximum benefit amount for a married veteran is $18,243 / year ($1,520.25 / month).
- For a surviving spouse without any dependent children, the maximum benefit amount is $9,344 / year ($778.67 / 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 $17,024 / year ($1,418.67 / month).
- The maximum benefit amount for a veteran with a spouse is $21,337 / year ($1,778.08 / month).
- The maximum benefit amount for a surviving spouse receiving Housebound Pension is $11,420 / year ($951.67 / 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 $23,238 / year ($1,936.50 / month).
- The maximum benefit amount for a married veteran is $27,549/ year ($2,295.75 / month).
- The maximum benefit amount for a surviving spouse is $14,934 / year ($1,244.50 / month).
- The maximum benefit amount for a veteran married to a veteran (both with A&A Pension): $36,861 / year ($3,071.75 / month
Sources:
2021 VA Pension Rates for Veterans
2021 VA Survivors Pension Benefit Rates
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 2021, as set forth below:
Medicare Part A Deductible for 2021: $1,484.00 deductible for each benefit period
Co-payments for hospital stays in 2021:
- Day 1-60: $0 co-insurance
- Day 61-90: $371 per day in 2021
- Day 91 – 150: $742 per day in 2021
- All costs for each day beyond 150 days
Co-payments for skilled nursing facility stay, days 21-100: $185.50 per day in 2021
Part B Deductible in 2021: $203.00
Part B Premium in 2021: $148.50 per month
Part B premiums in 2021 for higher-income beneficiaries:
- Individuals with annual incomes greater than $88,000 and less than or equal to $111,000, and married couples with annual incomes greater than $176,000 and less than or equal to $222,000 will pay a monthly premium of $207.90.
- Individuals with annual incomes greater than $111,000 and less than or equal to $138,000, and married couples with annual incomes greater than $222,000 and less than or equal to $276,000 will pay a monthly premium of $297.00.
- Individuals with annual incomes greater than $138,000 and less than or equal to $165,000, and married couples with annual incomes greater than $276,000 and less than or equal to $330,000 will pay a monthly premium of $386.10.
- Individuals with annual incomes greater than $165,000 and less than $500,000, and married couples with annual incomes greater than $330,000 and less than $750,000 will pay a monthly premium of $475.20.
- Individuals with annual incomes greater than or equal to $500,000, and married couples with annual incomes greater than or equal to $750,000 will pay a monthly premium of $504.90.
For Medicare’s “2021 Medicare Parts A & B Premiums and Deductibles,” click here.
Social Security and Supplemental Security Income
The Social Security Administration (SSA) has announced increases in the 2021 cost-of-living adjustment (COLA) for Social Security and Supplemental Security Income (SSI) benefits.
Social Security and SSI beneficiaries will receive a 1.4% COLA for 2021.
SSA also announced an increase in the SSA maximum taxable amount to $142,800 .
SSI Federal Payment Standard: The federal benefit amount for an individual eligible for SSI in 2021 will increase to $794 per month. New Jersey supplements the federal benefit amount by $31.25 per month, for a total monthly benefit of $825.25 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*
2021: $18,960/yr. ($1,580/mo.)
*One dollar in benefits will be withheld for every $2 in earnings above the limit.
The year in which an individual reaches full retirement age**
2021: $50,520/yr. ($4,210/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: $1,310.00/mo. in 2021
Blind: $2,190.00/mo. in 2021
Trial Work Period: $940/mo. in 2021
Social Security Fact Sheet for 2021 –
Federal and State Estate and Gift Taxes
Federal Estate Tax Threshold: $11.7 Million per person, $23.4 Million for married couples
Federal Gift Tax Exclusion: $15,000. The exclusion is increased to $159,000 for gifts to spouses who are not citizens of the United States.
Lifetime Federal Tax Exclusion for Gifts: $11,700,000
Generation-Skipping Federal Transfer Tax Exemption: $11,700,000
NJ Estate Tax: Eliminated as of 1/1/2018
NJ Inheritance Tax: Class A & E Exempt
NJ Gift Tax: $00.00
2021 Federal Income Tax Brackets and Rates
| Rate | For Unmarried Individuals | For Married Individuals Filing Joint Returns | For Heads of Households |
|---|---|---|---|
| 10% | Up to $9,950 | Up to $19,900 | Up to $14,200 |
| 12% | $9,951 to $40,525 | $19,901 to $81,050 | $14,201 to $54,200 |
| 22% | $40,526 to $86,375 | $81,051 to $172,750 | $54,201 to $86,350 |
| 24% | $86,376 to $164,925 | $172,751 to $329,850 | $86,351 to $164,900 |
| 32% | $164,926 to $209,425 | $329,851 to $418,850 | $164,901 to $209,400 |
| 35% | $209,426 to $523,600 | $418,851 to $628,300 | $209,401 to $523,600 |
| 37% | Over $523,600 | Over $628,300 | Over $523,600 |
Income Taxes for Trusts and Estates in 2021
| If Taxable Income is Between: | The Tax Due is: |
| $0 – $2,600 | 10% of taxable income |
| $2,601 – $9,550 | $265 + 24% of the amount over $2,650 |
| $9,551 – $13,050 | $1,921 + 35% of the amount over $9,550 |
| $13,051 | $3,146 + 37% of the amount over $13,050 |
Long-Term Care Premium Deductibility Limits for 2021
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 2021.
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 2021.
Attained age before the close of the taxable year Maximum deduction for year
40 or less $450
More than 40 but not more than 50 $850
More than 50 but not more than 60 $1,690
More than 60 but not more than 70 $4,520
More than 70 $5,640
For these and other inflation adjustments in 2021 from the IRS, see below:
For additional information concerning New Jersey elder law and estate planning, visit:
For additional information concerning special needs trusts and disability planning, visit:
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