Her Husband Is Going Into the Nursing Home on Medicaid Next Month. Her $3,800 Pension Check Will Still Be Hers, Every Dollar, Because Medicaid Only Counts Income by Whose Name Is on the Check

When one spouse enters a nursing home on Medicaid and the other has a pension in their own name, federal law lets the spouse at home keep that pension. Medicaid’s community spouse income rule assigns income by the name on the check. A $3,800 monthly pension paid only to the wife stays with her, while her husband’s income goes toward his care costs.

Medicaid Counts Each Spouse’s Income Separately

Medicaid calls the spouse in the facility the “institutionalized spouse” and the one remaining at home the “community spouse.” In any month the institutionalized spouse lives in the facility, none of the community spouse’s income is treated as available to cover that care. A payment made solely to one spouse is counted only as that spouse’s income. A payment made to both spouses is split down the middle, with half attributed to each.

The Federal Law Behind the Rule

The rule lives in 42 U.S. Code §1396r-5, the federal statute governing income and assets when one spouse is institutionalized. Subsection (b)(2)(A)(i) states that income paid solely in the community spouse’s name is not deemed available to the institutionalized spouse. The statute’s precise language holds that such income “shall be considered available only to that respective spouse,” and the protection applies “regardless of any State laws relating to community property or the division of marital property.”

Who Qualifies and Who Does Not

The rule covers married couples in which one spouse lives in a nursing facility and is expected to remain there for more than twenty-nine days, while the other remains in the community. Spouses in PACE programs are also covered. The rule does not apply to single applicants, to couples in which both spouses are institutionalized, or to residents of Puerto Rico and the territories, because the statute is limited to the 50 states and the District of Columbia.

Steps to Protect a Pension Before Admission Day

1. Gather the most recent statement or direct deposit notice for every income source: pension, Social Security, annuity, and IRA distributions. Check the payee line on each document carefully.
2. Flag any check made out to both spouses, because half of that income will be counted as the institutionalized spouse’s and directed toward care costs. Review the plan’s administration documents as well, since the name rule applies “unless the instrument providing the income otherwise specifically provides.”
3. Compare the at-home spouse’s total income against the Minimum Monthly Maintenance Needs Allowance (MMMNA). Effective July 1, 2026, the federal minimum is $2,705 per month in every state except Alaska ($3,381.25) and Hawaii ($3,111.25). The federal maximum for all of 2026 is $4,066.50, and the monthly housing allowance used in calculating excess shelter costs is $811.50 in most states. A $3,800 pension clears the minimum floor comfortably, so no income diversion from the husband’s check would be needed just to reach that threshold.
4. Work out the asset picture separately. For 2026, the community spouse can retain between $32,532 and $162,660 in countable assets, depending on the state. The institutionalized spouse is generally limited to $2,000 in countable assets in most states before Medicaid coverage begins.

Where the Name-on-the-Check Rule Stops

The protection applies to income only. Assets follow a different set of rules entirely. Medicaid combines the couple’s countable savings regardless of whose name appears on the account, and anything above the community spouse resource allowance must be spent down before the husband qualifies. Pension money deposited into a savings account converts from income to an asset and falls under those stricter asset rules. In states that permit spousal refusal, such as New York, the agency can seek financial contributions from a refusing spouse toward the institutionalized spouse’s care costs.

The figures in this area update on two separate schedules. The Centers for Medicare and Medicaid Services (CMS) adjusts the maximum income allowance and the CSRA asset limits each January. The MMMNA minimum and the housing allowance update on July 1 each year, tied to changes in the federal poverty level. The April 27, 2026 CMS informational bulletin confirmed the current July 1 MMMNA figures, which remain in effect through June 30, 2027. Families planning an admission in the coming months should confirm the payee name on every income source and verify their state’s current allowance figures before filing the Medicaid application.

Editor’s note: This article confirms that the MMMNA floor of $2,705 per month reflects the July 1, 2026 update published in the April 27, 2026 CMS CMCS Informational Bulletin, and notes that the $811.50 housing allowance is also effective July 1, 2026 through June 30, 2027.

Contact [email protected] for any questions or corrections.