As you may be aware, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law on March 27, 2020. All eligible individuals are expected to receive a $1,200.00 economic stimulus payment, or $2,400.00 in the case of eligible individuals filing a joint tax return in the coming weeks. Some people have already begun receiving their stimulus checks.
If you are a Medicaid recipient, or you have a Medicaid application that is pending or under appeal, you are required to maintain a maximum of $2,000.00 in countable resources to remain eligible for long term care benefits. Countable resources in excess of this $2,000.00 limit could cause a spenddown, or cause you to be ineligible for medical benefits.
Fortunately, the Internal Revenue Code of 1986, as amended by the CARES Act, provides that the receipt of this $1,200.00 stimulus payment will not cause individuals to be over resourced for Medicaid purposes. In other words, this payment shall not be taken into account as a countable resource for a period of twelve (12) months from receipt, for purposes of determining Medicaid eligibility.
For married couples, the community spouse may keep his or her separate $1,200.00, and may spend or save this money in one of their separately held accounts at his or her discretion. In our opinion, you, as the Medicaid applicant or recipient, may use this $1,200.00 in resources at your discretion. However, please note that this $1,200.00 will only be considered exempt for Medicaid purposes for a period of 12 months from receipt. Therefore, it must be spent within 12 months in order to avoid being counted towards your $2,000.00 asset limitation. Unfortunately, while we believe that this payment shall be considered an exempt resource, please note that the Illinois Department of Human Services (“IDHS”) often makes mistakes, and they may nonetheless errantly consider this $1,200.00 as a countable resource. Such a mistake could cause a spenddown or a cancellation of your medical benefits, if it is determined that your total resources exceed $2,000.00.
Upon receipt of this payment, if you do not spend it immediately, you could deposit it into your existing bank account. Alternatively, you could open a separate bank account to hold this payment, so it is very clear to the State of Illinois that this money is your stimulus payment, and it is therefore an exempt asset for twelve (12) months. Further, we do not recommend that you gift this $1,200.00 to any person, entity, or organization. Doing so may trigger a penalty period, during which time you may be ineligible for medical benefits.
If you have any questions about how this stimulus payment will affect your Medicaid eligibility, contact a certified elder law attorney, such as Linda Strohschein and her team at Strohschein Law Group. To set up an appointment, contact Strohschein Law Group at 630-377-3241.