The coronavirus relief bill includes a direct payment to most Americans, but this has Medicaid recipients wondering how the payment will affect them. Because the payment is not income, it should not count against a Medicaid recipient’s eligibility.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides a one-time direct payment of $1,200 to individuals earning less than $75,000 per year ($150,000 for couples who file jointly), including Social Security beneficiaries. Individuals earning up to $99,000 ($198,000 for joint filers) will receive smaller stimulus checks. Payments are based on either 2018 or 2019 tax returns.

The basic Medicaid rule for nursing home residents is that they must pay all of their income, minus certain deductions, to the nursing home. If the stimulus payment were considered income, it would likely have to go straight to the nursing home. Since in most states Medicaid recipients cannot have more than $2,000 in assets, there was also concern that the stimulus payments could put many recipients over the asset limit.

However, New Jersey’s Medicaid agency,, the Division of Medical Assistance and Health Services, recently issued new regulations set forth in Medicaid Communication No. 20-04 which provides that federal stimulus payments of $1200 received by Medicaid beneficiaries will not be included in countable income and resource calculations in determining eligibility. The stimulus payments will continue to be an excluded resource for an additional 12 months. (Medicaid Communication No. 20-04 also bars all Medicaid terminations during the course of the public health emergency caused by COVID-19, as well as enacting other new Medicaid regulations. The changes are summarized in a prior blog post.)

In addition, in a blog post, the commissioner of the Social Security Administration (SSA) has clarified that the SSA will not consider stimulus payments as income for Supplemental Security Insurance (SSI) recipients, and the payments will be excluded from resources for 12 months.

(Adapted from an article on the ElderLawAnswers website. Mr. Vanarelli is a sounding member of ElderLawAnswers.)

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