Will I Be Left With Nothing? How Medicaid Protects the Healthy Spouse's Income
One of the most common fears I hear in my office sounds something like this: “My husband needs nursing home care, but his pension and Social Security are what we live on. If Medicaid takes his income to pay for his care, how am I supposed to keep the lights on?”
It is a reasonable fear, and it keeps people from asking for help they are entitled to. So let me put it plainly. Medicaid does not expect the spouse who stays home to give up everything. Not only does the “community spouse” keep his or her income in its entirety, there is also a built-in protection designed for exactly this situation, and it is worth understanding before a crisis forces the decision.
The Spousal Allowance, in Plain Terms
When one spouse enters a nursing home and qualifies for Medicaid, that spouse is generally required to contribute most of their monthly income toward the cost of care. But before any of that income goes to the facility, Medicaid first looks at the spouse who remains in the community, the healthy spouse living at home. If, based on the rules, that spouse does not have enough income of their own to live on, Medicaid allows income to be shifted from the ill spouse to the healthy one.
The rule that makes this happen is called the Minimum Monthly Maintenance Needs Allowance, or MMMNA. Think of it as a floor. It is the minimum monthly income the community spouse is allowed to keep. If the community spouse’s own income falls below that floor, the shortfall is made up from the institutionalized spouse’s income before the facility gets paid.
This is precisely why the fear of being left destitute, while understandable, is usually unfounded. The spouse with the higher income is often the one who needs care, and the allowance is built to move that income where it is needed.
How the Number is Calculated in New Jersey
The allowance is not a single flat figure. It starts with a base amount and can grow depending on the community spouse’s housing costs. Here are the New Jersey figures in effect as of July 1, 2026:
Base allowance: $2,705.00 per month. This is the starting floor for the community spouse.
Excess shelter allowance: If the community spouse’s specified housing costs exceed $811.50 per month, the amount above that threshold is added to the base. Housing costs consist solely of rent or mortgage principal and interest, property taxes, homeowner’s insurance, and any condo or co-op maintenance fee.
Utility allowance: If the community spouse pays their own utilities directly, an additional $878.00 per month is counted as a shelter expense.
Federal maximum: The allowance is capped. For 2026, the ceiling is $4,066.50 per month.
The community spouse’s own gross income is then subtracted from their calculated allowance. Whatever gap remains is the amount that can be drawn from the institutionalized spouse’s income each month.
A Real World Example
Consider a couple I will call Anne and Robert. Robert has entered a nursing home and qualifies for Medicaid. His monthly income is $4,500 between his pension and Social Security. Anne remains at home and receives $1,200 per month in Social Security. That is all the income she has, and understandably she is terrified.
Here is how the allowance protects her:
Anne’s mortgage, taxes, and insurance come to $1,100 per month.
Because she pays her own utilities, we add the $878.00 utility allowance, bringing her total shelter cost to $1,978.
Her shelter costs exceed the $811.50 threshold by $1,166.50, so that excess is added to the base.
Base of $2,705.00 plus $1,166.50 gives Anne a maintenance allowance of $3,871.50 per month, which is under the federal cap.
Anne already has $1,200 of her own income, so the shortfall is $2,671.50.
That means $2,671.50 of Robert’s monthly income is redirected to Anne every month. Rather than being left with her $1,200, Anne keeps $3,871.50 to run her household. Robert contributes the remainder of his income toward his care. Anne is not left destitute. She is left able to stay in her home.
When the Standard Allowance Still is Not Enough
Sometimes the calculated allowance genuinely does not cover a community spouse’s real circumstances, for example when there are unusually high medical costs or other exceptional expenses. New Jersey law allows a couple to request a fair hearing and ask for a higher allowance when they can show that the standard amount creates hardship. That door is open, and it is one of the places where careful advocacy makes a real difference.
The Takeaway
If your spouse needs care and carries the higher income, you are not required to choose between getting them help and keeping a roof over your head. The rules were written to prevent exactly that outcome. The figures change every year and the calculation has real nuance, so the best step is to sit down with someone who does this work before you make any decisions under pressure.
If you are facing this situation and want to understand what it means for your household specifically, I would be glad to walk through the numbers with you. Call the office at 908.335.9601 to schedule a time to discuss this further or send me an email to: Ryann@SiclariLegal.com
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