Brenton C. McWilliams
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What is the income cap for Alabama Long Term Care Medicaid?

Author: Brenton McWilliams

What is the income cap for Alabama Long Term Care Medicaid?

The income cap for Alabama Long Term Care Medicaid is $2,313 as of 2019 (the excess over this amount may be put into a Qualified Income Trust).

Medicaid is a means-based benefit program. To receive benefits under Medicaid, individuals applying and renewing must meet certain financial criteria to qualify for benefits. One of those requirements is a cap on the income the applicant receives each month. The income an applicant may receive each month is capped at $2,313 as of 2019. However, if an applicant is ineligible because the applicant receives income over the cap, the applicant can become eligible by placing the excess income in a Qualified Income Trust.

For married couples, unlike the asset requirements, the spouse’s income is not considered for eligibility. Only the applicant’s income is considered. If only one spouse is applying for or receiving Medicaid benefits, the spouse not applying for or receiving benefits (the Community Spouse) may be entitled to receive a portion of the applicant spouse’s income.

The Monthly Maintenance Needs Allowance

The Monthly Maintenance Needs Allowance is the amount the Community Spouse is entitled to take from the Institutional Spouse’s income to make sure the Community Spouse is not left with inadequate support after their spouse is admitted into a nursing home. First, the Community Spouse’s income is not considered for their spouse’s eligibility for Medicaid. Second, if the Community Spouse’s monthly income is less than the Monthly Maintenance Needs Allowance ($2,114 in 2019), then the Community Spouse is entitled to receive as much of their spouse’s income as is necessary to bring the Community Spouse’s total income up to $2,114.

What are income and assets?

To fully understand the eligibility requirements, it’s important to recognize the difference between income and assets . Income is money or property received by the applicant. Examples of income include social security payments, pension payments and dividends. Assets are money or property currently owned by the applicant. Examples of assets include a home, cars, stocks, IRAs, and money held for over a month. According to Medicaid rules, income received by an applicant becomes an asset at the beginning of the next month. This is especially important when the time comes for application or renewal. In a matter of days, unspent income can become assets that result in the disqualification of an applicant or individual currently receiving benefits.

What is a Qualifying Income Trust?

If an applicant receives monthly income in excess of the income cap, the applicant can become eligible by placing the excess income in a type of trust referred to as either a Qualifying Income Trust (QIT) or Miller Trust. The income placed in the QIT is disregarded from consideration Medicaid eligibility. However, the income placed in the QIT will be taken into account in determining the applicant’s monthly cost of care requirement. When the QIT is terminated, any funds remaining in trust must be paid to the Alabama Medicaid Agency, up to the amount the Alabama Medicaid Agency paid in Medicaid benefits for the recipient while the trust existed.

If you have questions about filing an Alabama Medicaid application or questions about Alabama Medicaid eligibility please call me direct at (251) 215-9275 to setup an appointment.