Many families believe their mother cannot qualify for Medicaid because she has savings, owns a home, receives a pension, or has too much monthly income.

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Having money above Medicaid’s limits does not always mean she cannot qualify. It means her income, assets, marital status, care needs, and financial history should be carefully reviewed before applying.

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Is the Problem Income or Assets?

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Medicaid treats monthly income and savings differently.

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Income can include:

• Social Security

• Pension payments

• IRA distributions

• Annuity payments

• Rental income

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Assets can include:

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• Checking and savings accounts

• Certificates of deposit

• Stocks and investments

• Certain retirement accounts

• Cash-value life insurance

• Additional real estate

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The first step is determining whether your mother has excess income, excess assets, or both.

What If Her Monthly Income Is Too High?

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Income above Medicaid’s limit does not always prevent eligibility.

For certain applicants who are disabled, excess monthly income may be deposited into an approved pooled income trust. The trust can then use those funds to pay approved monthly expenses on your mother’s behalf.

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A pooled income trust is generally used to address excess income. It does not automatically resolve excess savings or other assets.

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What If She Has Too Much in Savings?

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Your mother may need to reduce her countable assets before becoming eligible. However, this does not always mean spending everything on nursing-home bills.

Depending on her circumstances, funds may be appropriately spent for her benefit on expenses such as:

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• Medical and care expenses

• Home repairs or accessibility improvements

• Necessary household or personal items

• Certain outstanding debts

• Medical equipment

• An irrevocable prepaid funeral arrangement

• Professional Medicaid-planning or legal services

All spending should be properly documented.

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Does She Have to Sell Her Home?

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Not necessarily. A primary residence may receive special treatment under Medicaid rules, particularly when a spouse or certain qualifying relatives continue living in the home.

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However, home ownership may also raise questions about liens, transfers, estate recovery, and future ownership. Do not sell, gift, transfer, or add someone to the deed without receiving advice specific to your mother’s situation.

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Can She Give Her Money to Her Children?

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Gifting money or property can create serious Medicaid eligibility problems, especially when nursing-home Medicaid is needed.

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New York may review an applicant’s financial history to identify gifts, transfers, large withdrawals, and property sold below its fair market value. An improper transfer could result in a penalty period during which Medicaid will not pay for nursing-home care.

Do not begin gifting or transferring money solely to qualify for Medicaid.

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What If My Mother Is Married?

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Different protections may apply when one spouse needs nursing-home care and the other remains at home.

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The spouse living in the community may be permitted to retain certain income, assets, and the primary residence. Both spouses’ finances should be reviewed before any application or transfer is completed.

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Do Not Wait Until Her Savings Are Gone

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Planning early can provide more time to:

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• Review income and assets

• Identify countable and exempt property

• Examine recent financial transactions

• Organize required documentation

• Address excess income or resources

• Consult an elder-law attorney when necessary

• Prepare a complete Medicaid application

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Even if your mother already needs care, it may not be too late to explore her options.

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Find Out What Options May Be Available

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Every Medicaid case is different. Hudson Valley Senior Advocates helps New York families understand potential eligibility concerns, organize financial documents, prepare for the application process, and determine the next appropriate steps.

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Prefer to speak with someone?
Call (329) 234-3711

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Hudson Valley Senior Advocates provides Medicaid planning and application support but does not provide legal, tax, or investment advice. Legal matters involving deeds, trusts, estate recovery, and asset transfers should be reviewed by a qualified New York elder-law attorney.