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 remains with her, while her husband’s income goes toward his care.

Medicaid Counts Each Spouse’s Income Separately

Medicaid calls the spouse in the facility the “institutionalized spouse” and the spouse at home the “community spouse.” In any month the institutionalized spouse lives in the facility, no income of the community spouse is deemed available to the institutionalized spouse. A payment made only to one spouse counts only as that spouse’s income. A payment made to both spouses is split, with one-half counted for each.

Federal Law Behind the Rule

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

Who Qualifies and Who Does Not

The rule specifically covers married couples in which one spouse lives in a nursing facility and is expected to remain more than twenty-nine days, while the other stays in the community. It also covers spouses in PACE programs. It does not cover single applicants, couples in which both are institutionalized, or residents of Puerto Rico and the territories, because the section only applies to the 50 states and the District of Columbia.

Steps to Protect a Pension Before Admission Day

1. Get 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.
2. Flag any check made out to both spouses, since half will be counted as the institutionalized spouse’s income. Request the plan’s administration documents. The name rule applies “unless the instrument providing the income otherwise specifically provides.”
3. Compare the at-home spouse’s income with the Minimum Monthly Maintenance Needs Allowance (MMMNA). Starting July 1, the federal minimum is $2,705 in every state except Alaska and Hawaii, and the 2026 maximum is $4,066.50. A $3,800 pension is above the minimum. The housing allowance is $811.50 in most states.
4. Work out the asset side separately. In 2026, the community spouse can keep between $32,532 and $162,660 in assets, depending on the state. The institutionalized spouse generally can have no more than $2,000 in countable assets in most states.

Where the Name-on-the-Check Rule Stops

The protection applies to income only. Assets are treated differently. Medicaid adds up the couple’s countable savings regardless of whose name is on the account, and anything above the community spouse resource allowance must be spent down before the husband qualifies. Pension money deposited in a savings account becomes an asset and gets counted under asset rules. In states that allow spousal refusal, such as New York, the agency can seek contributions from a refusing spouse for care costs.

The figures change on two dates. The Centers for Medicare & Medicaid Services (CMS) adjusts the maximum income allowance and asset allowances each January, and updates the MMMNA and housing allowance effective July 1 each year based on changes to the federal poverty level. Families planning an admission in the coming months should check the payee name on every income source and the state’s current allowance figures before filing the application.

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