How do Medicaid waivers protect income?

How do Medicaid waivers protect income?

Short answer: Waiver participants live at home, so states let them keep a larger share of income for rent, food and other living costs than nursing home residents keep.

Figures change periodically. Double-check current amounts before relying on them.

A nursing home resident’s room and food are provided by the facility, so most of their income goes toward care. A person receiving home and community-based waiver services still has to pay for housing, utilities and food, so waiver rules protect more income.

States do this through a personal maintenance allowance (sometimes called a maintenance needs allowance). Federal rules let states set it at a reasonable amount; many use 300 percent of the SSI benefit ($2,982 a month in 2026), while others use a lower figure. Income below the allowance is kept by the participant. In some states, income above it must be paid toward the cost of waiver services, similar to a patient liability.

For married participants, spousal impoverishment rules apply to waivers too, through at least September 30, 2027, so a spouse at home can receive part of the participant’s income if their own income is low.

In states with an income cap, a participant whose income is over the cap may need a Miller trust. Income in the trust can be used for allowed expenses, depending on the state’s rules.

Ask how your state calculates the allowance and any cost share before choosing between home care and a nursing home.

Getting help

Every situation is different, and small facts can change the answer. If this question affects a real decision, especially with a spouse at home, a home, gifts or a trust, a Certified Medicaid Planner can apply your state’s rules to your situation. As a rough guide, published fees for help with an application range from about $500 to $6,000, and hourly help from about $150 to $600.

Last updated for 2026. General information only, not legal or financial advice. Medicaid Answers is a free educational resource published by Medicaid Answers Foundation.

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