Spousal Impoverishment Rules

Before 1988, a married couple often had to spend nearly everything they owned before Medicaid would pay for one spouse’s nursing home care. The spouse who stayed at home could be left with almost nothing. Congress changed that with the spousal impoverishment rules in the Medicare Catastrophic Coverage Act of 1988. They are found in Section 1924 of the Social Security Act. This guide explains how they work in 2026.

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

Who the rules protect

The rules protect the community spouse: the husband or wife who is not in a nursing home and is not applying for Long-Term Care Medicaid. The spouse who needs care is often called the institutionalized spouse or the applicant spouse.

The rules apply when:

• one spouse is in a nursing home, or is expected to be there for at least 30 days in a row; or
• one spouse is applying for a home and community-based services (HCBS) waiver. Federal law has required states to apply the spousal rules to waiver applicants as well, and current law extends that requirement.

The rules generally do not apply when both spouses need long-term care. See When both spouses need care.

The two main protections

How assets are treated

Step 1: Both spouses’ assets are counted together

When one spouse applies, the state adds up the countable assets of both spouses, regardless of whose name is on the account or deed. A prenuptial agreement does not change this.

Step 2: The “snapshot” date

The state takes a snapshot of the couple’s total countable assets on the first day of the first continuous period of institutionalization (a stay expected to last 30 days or more). For waiver applicants, the date is set under similar rules. The CSRA is based on that snapshot total.

Step 3: The spouse at home’s share is set aside

The state figures the CSRA. Depending on the state, this is either:

• half of the couple’s countable assets, but no less than the state’s minimum and no more than the maximum ($162,660 in 2026); or
• the full maximum of $162,660, if the state allows the spouse at home to keep that amount regardless of the snapshot total. Florida is one example.

Step 4: The rest must be at or under the applicant’s limit

Whatever is left after the CSRA counts for the applicant spouse, who must be at or below the state’s asset limit (often $2,000). Anything above that is the amount the couple would need to spend down, or protect in other ways allowed by law.

Exempt assets

Some assets are not counted at all for either spouse, such as:

• the home, when the spouse at home lives there (the home equity limit does not apply when a spouse lives in the home);
• one vehicle;
• household goods and personal belongings;
• certain burial funds and prepaid funeral plans;
• in many states, certain retirement accounts of the spouse at home.

See your state guide for its list.

How income is treated

Income works differently from assets.

• The spouse at home’s income belongs to them. It is not counted toward the applicant’s eligibility, and the spouse at home does not have to use it for the applicant’s care. This is called the “name on the check” rule.
• The applicant’s income is counted. After approval, most of it goes toward the cost of care (the “patient liability” or “share of cost”).
• If the spouse at home has low income, some of the applicant’s income can be paid to them, up to the MMMNA. See MMMNA.

Example

Mary is in a nursing home in Pennsylvania. Her husband Tom lives at home. Mary has $2,400 a month in Social Security and a pension. Tom has $1,300 a month.

• Tom’s $1,300 is not counted for Mary’s eligibility.
• Tom’s minimum allowance is at least $2,705 (from July 1, 2026). He is short $1,405, so up to that amount of Mary’s income can be paid to him, and possibly more if his housing costs are high.
• Mary keeps a personal needs allowance (in Pennsylvania, $60 a month). The rest of her income goes to the nursing home.

Transfers between spouses

Transfers between spouses are allowed at any time without a penalty. But since both spouses’ assets are counted together at the start, moving assets between them does not by itself help with eligibility. After approval, the assets that the spouse at home is allowed to keep are usually moved into that spouse’s name alone, within a time set by the state. See Transfers that are allowed.

After approval

Once the applicant is approved:

• The spouse at home’s assets are generally not counted again for the applicant’s eligibility, even if they grow.
• The spouse at home’s own income continues to belong to them.
• Each year (or at renewal), the state rechecks the applicant’s own income and assets.

If the allowances are not enough

Federal law lets either spouse ask for a fair hearing to raise the CSRA or MMMNA. For example, if the spouse at home’s income is very low, the state may allow them to keep more assets to produce income. Or if there are “exceptional circumstances resulting in significant financial duress,” such as high medical costs, the MMMNA can be raised above the standard. See Raising the allowances through a fair hearing. Because the spousal rules involve so many choices and deadlines, couples are encouraged to work with a Certified Medicaid Planner (CMP).

Common myths

“We have to divorce to protect the spouse at home.” The spousal impoverishment rules exist so that most couples do not need to divorce. Divorce has its own serious consequences. See Medicaid divorce.

“The spouse at home has to spend their own income on the nursing home.” No. The spouse at home’s income is theirs.

“Our house will be counted.” Not while the spouse at home lives there. Estate recovery may come into play later, but that is a separate set of rules. See Estate recovery.

A full example, start to finish

Bill and Carol have been married 50 years. In 2026 Bill moves into a nursing home in a state that uses the 50 percent method and a $2,000 asset limit. Carol stays in their home.

Assets on the snapshot date

Carol’s CSRA: half of $200,000 is $100,000. That is between $32,532 and $162,660, so Carol can keep $100,000.

Bill’s share: $200,000 − $100,000 = $100,000. Bill can keep $2,000, so $98,000 is above the limit. The couple can spend that on allowed costs, such as Bill’s care, home repairs, debts or prepaid funeral plans, without a penalty.

Income: Bill has $2,600 a month and Carol has $1,100. From July 1, 2026, Carol’s minimum is $2,705, so up to $1,605 of Bill’s income can go to her, more if her housing costs are high. Bill keeps his personal needs allowance and the rest goes to the nursing home.

Where the state guides fit

Each state guide shows whether the state uses the 50 percent or full-maximum method, its asset limit, its personal needs allowance and any state-specific minimum. Use them alongside this guide.

Questions families often ask first

Will the spouse at home lose the house? Not because of the application. The home is exempt while the spouse lives there. Later questions, such as estate recovery after both spouses have died, are covered in the home section.

Can the spouse at home keep working? Yes. Their wages are their own income and are not counted toward the applicant’s eligibility.

What if the spouse at home refuses to share information? Some states allow a “spousal refusal” in limited situations. See Spousal refusal.

Do these rules apply to same-sex spouses? Yes. Since 2015, legally married same-sex couples are treated the same as any married couple.

How the rules fit together over time

It can help to think of the spousal rules in three stages:

1. At the start of care: the snapshot of the couple’s assets is taken, and the CSRA is figured from it.
2. At application: the applicant’s share must be at or under the asset limit, and the MMMNA is figured from the spouse at home’s income and housing costs.
3. After approval: the CSRA assets move into the spouse at home’s name, the income allowance is paid each month, and the applicant’s own income and assets are reviewed at each renewal.

Each stage has its own paperwork, so keeping records together from the very start saves time later.

Related guides

• Community Spouse Resource Allowance (CSRA)
• Minimum Monthly Maintenance Needs Allowance (MMMNA)
• When both spouses need care
• Spousal refusal
• State guides

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