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Personal Needs Allowance

Personal Needs Allowance
Medicaid Planning
Jason Neufeld
January 11, 2019

When an older adult enters a nursing home through Medicaid’s ICP program, essentially all of the Medicaid-recipient’s income, from all sources, goes towards their cost of care. 

There are some exceptions. If the Medicaid recipient is married and the spouse is able to live mostly independently (referred to as the “community spouse”). The community spouse is entitled to a community spouse resources allowance (also known as a “CSRA”) and a Minimum Monthly Maintenance Needs Allowance  (a/k/a “MMMNA”). The MMMNA may allow the sick spouse receiving Medicaid and living in a nursing home to divert some or all of their income toward the community spouse.

For the exact CSRA and MMMNA rate, and other important Medicaid numbers amounts in Florida, click the link.

If the Medicaid recipient is single/widowed, there is no resource or income diversion available and almost all of their income will go toward their nursing home bills. The first major, albeit small, exceptions are to pay Medicare and other health insurance premiums. The second exception is that the Florida legislature (and federal law) allows a small personal needs allowance.

What is the Florida personal needs allowance?

The personal needs allowance is set by the Medicaid ESS policy manual section 2640.0118 and at 42 CFR Sec. 435.725 (c)(1).

Florida allows nursing home residence who are on the Medicaid long term care program to retain a whopping $160.00 per month as a “personal needs allowance” (as of July 2023). Medicaid’s theory is that they basically covering all necessities but a small amount could be used on clothing, persons needs and other non-essentials or really whatever the nursing home residents wants.

What items are typically purchased with personal needs allowance funds?

The older adult can utilize the personal needs allowance for anything they desire. Typically we see the personal needs allowance used mostly for haircuts, salon/hair dresser activities, clothing, magazines and books, favored-brand hygiene and toiletry products, supplements and multivitamins, vending machine snacks, birthday cards to send to family, etc…

While a Medicaid recipient is not supposed to give gifts, we often see that some portion of the personal needs allowance might be used to purchase small knick-knacks to give to visiting grandchildren. The Department of Children and Families in Florida is generally not interested in these small items.

What happens if the Medicaid recipient doesn’t use up their entire personal needs allowance before the end of the calendar month?

The personal needs allowance need not all be spent before the end of the money, but the Medicaid recipient has to be careful to not let the personal needs allowance accumulate to the point where they have more than $2,000 in total assets (from all sources, not just the aggregate personal needs allowance).

If the Medicaid recipient accumulates over $2,000 in assets, they will no longer be Medicaid eligible. The Medicaid recipient, or their trustee or agent under a valid durable power of attorney, must be on alert for this. It would be a shame to lose Florida Medicaid eligibility, even for a month, when it is just so easy to spend the personal needs allowance to prevent the older adult from being deemed Medicaid ineligible.

Speak with your Florida Elder Care Attorney if there is a risk of this kind of asset accumulation to discuss Medicaid-compliant ways to protect Florida Medicaid ICP benefits.

Is the personal needs allowance subject to change?

Yes. The personal needs allowance, in fact, used to only be $35.00 per month. The personal needs allowance was only increased to $105.00 per month in 2014, and raised to $130.00 in July 2018. Prior to that, starting in the 1960s, the personal needs allowance was $30 or $35! The law is certainly subject to change, and unfortunately, there is no built-in restriction that would prevent the Florida legislature from lowering the personal needs allowance amount.

In 2017, the Florida House of Representatives budget committee proposed cutting the personal needs allowance back down to $35.00. Florida provided the 17th highest personal needs allowance out of all 50 states and Joe Negron, Florida Senate President at the time, thought our senior citizens on Medicaid have it too good.

This is where the State of Florida needs to save some money? Decreasing the Florida Medicaid personal needs allowance would be a travesty – literally taking advantage of the oldest and frailest members of our society.

Luckily, the measure did not pass and the Florida personal needs allowance remains at $130.00 as of the editing of this article (January 2021).

This is yet another reason why Medicaid-planning lawyers are needed - to protect assets because before they are gone - because Florida allows you to keep so little.

Other Resources and Articles Concerning the Florida Medicaid Personal Needs Allowance

Jason Neufeld

Jason Neufeld is the Founder and Managing Partner of Elder Needs Law, a Florida estate planning and elder law firm he created in 2017. With more than 15 years of experience practicing law, he represents clients in a wide range of legal matters, including Medicaid planning, estate planning, elder law, probate, Medicare, and life insurance.

Jason received his Juris Doctor from the University of Miami — School of Law and is a member of the Florida Bar and the Broward County Bar Association. He has received numerous accolades for his work, including being named a Rising Star and Super Lawyer by Super Lawyers and among the Florida Legal Elite by Florida Trend in 2024.

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