Federal regulators have set the ceiling on how much of a nursing home resident’s income a spouse still living at home can be allotted at $4,066.50 a month for 2026, according to an April 27 bulletin from the Centers for Medicare & Medicaid Services. That figure caps the monthly maintenance needs allowance, the formula Medicaid caseworkers use to redirect part of an institutionalized spouse’s Social Security or pension income to the community spouse. A separate floor sits well below it, effective July 1 in every state except Alaska and Hawaii. Together the two numbers decide how much income a married couple keeps once one partner moves into a nursing facility.
How the Minimum and Maximum Allowance Are Set
The monthly maintenance needs allowance exists because Medicaid counts only the institutionalized spouse’s income when deciding whether that spouse qualifies for long-term care coverage, not the couple’s combined income. Once eligibility is established, a second calculation decides how much of that income the nursing home resident must contribute toward the cost of care and how much can instead be diverted to the spouse who remains at home. States are required to set the allowance somewhere between a federal minimum and a federal maximum, adjusting the minimum every July 1 and the maximum each January.
For 2026, the maximum monthly maintenance needs allowance is $4,066.50, the figure the Centers for Medicare & Medicaid Services published in its updated standards. No state can direct more than that amount from an institutionalized spouse’s income to a community spouse, regardless of how large the gap between the couple’s expenses and the community spouse’s own income actually is. The ceiling moves alongside the Consumer Price Index, which CMS listed as rising 3.0 percent for the year covered by the update.
The floor works differently. Effective July 1, the minimum monthly maintenance needs allowance is $2,705 a month in every state except Alaska and Hawaii, where the higher cost of living pushes the minimum to $3,381.25 and $3,111.25. A community spouse whose own income, such as Social Security or a pension, falls below that state minimum is entitled to have the shortfall made up from the institutionalized spouse’s income, subject to the maximum ceiling above.
States calculate where an individual case lands between the floor and the ceiling using an excess shelter formula built around a monthly housing allowance, set at $811.50 outside Alaska and Hawaii for the same July 1 cycle. A community spouse whose rent, mortgage, taxes, insurance and utility costs exceed that housing allowance can have the difference added to the minimum allowance, up to the $4,066.50 maximum, which is how two households with identical minimum incomes can end up with different monthly allotments.
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What the Community Spouse Keeps in Resources and Home Equity
Income is only half of the spousal impoverishment protections. The same CMS update sets the community spouse resource allowance at a minimum of $32,532 and a maximum of $162,660 for 2026, the portion of a couple’s combined countable assets that Medicaid must let the community spouse keep. States pick a figure inside that federal range, and everything above the protected amount is generally counted against the institutionalized spouse’s eligibility unless it is spent down or otherwise excluded.
A separate limit applies to the home itself. An applicant’s equity interest in a primary residence is excluded from countable resources only up to a cap that CMS set at a minimum of $752,000 and a maximum of $1,130,000 for 2026, with each state again choosing where in that range its own limit falls. Equity above the applicable limit can count against the institutionalized spouse’s resource eligibility even while the community spouse continues to live in the house.
Congress built both protections into law in 1988 specifically to stop nursing home costs from stripping a couple’s lifetime savings before one partner ever qualified for coverage. The intent, as federal guidance describes it, was to let the spouse remaining at home continue living with financial independence rather than being reduced to near-poverty just so the other spouse could receive Medicaid-funded care in a facility that can otherwise run several thousand dollars a month.
How the Institutionalized Spouse’s Income Actually Gets Divided
The mechanics of the transfer happen inside what CMS calls the post-eligibility treatment of income, a calculation performed only after the nursing home resident has already qualified for Medicaid. It applies to people in institutions, most often nursing facilities, and to some recipients of home and community-based waiver services, and it runs every month for as long as the person remains eligible and has income to allocate.
The calculation starts with the institutionalized spouse’s total monthly income and subtracts a sequence of protected amounts before anything is owed to the nursing facility. According to CMS’s own description of the post-eligibility process, a personal needs allowance is deducted first, followed by the community spouse’s monthly income allowance, but only if that income is actually paid over to the community spouse rather than merely calculated on paper.
Two further deductions can apply before the remainder is due to the facility. A family monthly income allowance is subtracted if other dependents live in the community spouse’s household, and an amount for the institutionalized spouse’s own incurred medical or remedial care expenses, such as private health insurance premiums, is deducted as well. Whatever income is left after all four deductions becomes the resident’s contribution toward the cost of the nursing facility care, sometimes called the patient’s share of cost.
The same April update that set the $4,066.50 ceiling also refreshed the underlying Supplemental Security Income figures the formula depends on, including a federal benefit rate of $994 a month for an individual and $1,491 for a couple, an SSI resource standard of $2,000 for an individual, and an income cap limit of $2,982, equal to three times the individual benefit rate, that some states use as an alternate eligibility threshold for long-term care applicants.
Dan Brillman, CMS’s deputy administrator and director of the Center for Medicaid and CHIP Services, signed the bulletin instructing state Medicaid agencies to update their systems to the new figures, noting that the maximum allowance and the resource standards adjust each January while the minimum allowance and housing allowance move every July 1 in line with the federal poverty level. States that fail to apply the revised numbers risk either overcharging institutionalized residents for their care or underprotecting the spouses who remain at home.
Income Splitting in a Nursing-Home Case
The rules above show how much income and how many resources a community spouse is legally entitled to keep, but they do not show which state form actually claims that allowance or which redetermination deadline resets the calculation each year. Caseworkers apply the minimum, maximum, and resource figures case by case, and a spouse who misses a renewal notice can see the allowance recalculated without warning.
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This article was researched and drafted with the assistance of AI and reviewed by The Money Overview editorial team.
