How the Community Spouse Keeps the House, Income, and Savings When a Spouse Enters a New York Nursing Home

By Albert Goodwin, Esq., attorney admitted in New York, Law Offices of Albert Goodwin, Midtown Manhattan. Last reviewed: January 2026. The dollar figures on this page are the 2026 New York Medicaid levels. See the verification note below for where they come from.

This page is for one situation: one spouse is in, or about to enter, a New York nursing home, and the other spouse is staying home. Medicaid calls the spouse at home the community spouse and the spouse in the facility the institutionalized spouse. Private rates in the New York City region commonly run $15,000 to $20,000 per month. The rules below exist so that cost does not leave the community spouse without a home, an income, or savings. Most families keep far more than they expect, including families who start planning after admission.

If both spouses are healthy and you are planning years ahead, this is not the right page. Read our guides on titling assets under one spouse and advanced New York estate planning techniques, which cover the Medicaid Asset Protection Trust in detail. This page mentions the trust only briefly.

The 2026 New York Numbers You Will Use

How we verified these figures

The resource and income levels are set each January. The federal spousal impoverishment standards (CSRA and MMMNA maximums) are released by the Centers for Medicare and Medicaid Services, and New York adopts the maximums under Social Services Law § 366-c. The New York State Department of Health then publishes the state levels in its annual General Information System (GIS) message on Medicaid income and resource levels and updates the Medicaid Reference Guide. The regional nursing home rates used for penalty calculations are published separately by DOH each year. We check this page against those releases each January. If you are reading this after 2026, confirm the current levels before relying on any number here.

The Legal Framework in One Paragraph

The federal spousal impoverishment statute is 42 U.S.C. § 1396r-5. New York implements it in Social Services Law § 366-c and in 18 NYCRR 360-4.10. Transfer-of-asset penalties come from 42 U.S.C. § 1396p(c) and 18 NYCRR 360-4.4. Spousal refusal comes from Social Services Law § 366(3)(a). In New York City the program is run by the Human Resources Administration (HRA); outside the city it is run by each county's Department of Social Services (DSS). The law is the same statewide. The way it is enforced is not, and the differences matter most for spousal refusal.

Step One: Count the Assets and Fix the Snapshot

Medicaid counts the assets of both spouses together, no matter whose name is on the account. Countable assets include bank accounts, CDs, brokerage accounts, cash-value life insurance, retirement accounts not in payout status, and real estate other than the home. Exempt assets include the home while the community spouse lives in it, one vehicle, household goods, an irrevocable pre-paid funeral, and property essential to self-support. For a fuller list, see our guide to countable and exempt assets.

Under 42 U.S.C. § 1396r-5(c)(1), the couple's resources are assessed as of the beginning of the first continuous period of institutionalization, which is the first stay expected to last 30 days or more. You can ask HRA or DSS for this resource assessment before you file an application. In states that split the couple's assets in half, this snapshot date can swing the result by tens of thousands of dollars. New York is different in a way that helps the community spouse: New York grants the full maximum CSRA regardless of how much or how little the couple has. A couple with $170,000 and a couple with $900,000 both get a $162,660 CSRA. What matters in practice is the resource level on the first day of the month for which you are asking Medicaid to pay. The applicant must be at or under $33,038 on that date, and the community spouse's countable assets above $162,660 must have been dealt with by one of the methods below.

Moving money between spouses is never penalized. 42 U.S.C. § 1396p(c)(2)(B)(i) exempts any transfer to a spouse, and the same rule appears in 18 NYCRR 360-4.4. The first move in almost every case is to retitle everything above the applicant's $33,038 limit into the community spouse's name. That does not by itself create eligibility, because the agency still counts the community spouse's assets above the CSRA. It sets up the strategies that do.

If the institutionalized spouse can no longer sign, every one of these steps depends on a power of attorney that authorizes transfers to the spouse and, where needed, gifts. A standard form that lacks those powers can stop a crisis plan cold. See our page on powers of attorney and advance directives in New York.

Step Two: Protect the Community Spouse's Income

The community spouse has no income limit. She keeps every dollar of her own Social Security, pension, wages, and investment income. The MMMNA is a floor, not a ceiling. If her own income is below $4,066.50 per month, the institutionalized spouse's income is shifted to her until she reaches that figure (42 U.S.C. § 1396r-5(d); SSL § 366-c(2)). Only what remains after the shift and the $50 personal needs allowance goes to the nursing home as the applicant's share, which New York calls the NAMI (net available monthly income). Health insurance premiums the applicant pays are also deducted before the NAMI is set.

Worked income example

The community spouse earns $2,100 per month from Social Security and a small pension. The institutionalized spouse receives $3,200 per month.

• Shortfall: $4,066.50 minus $2,100 equals $1,966.50.
• Shift to community spouse: $1,966.50 per month from the institutionalized spouse's income.
• Personal needs allowance: $50 stays with the institutionalized spouse.
• NAMI to the facility: $3,200 minus $1,966.50 minus $50 equals $1,183.50 per month.

Medicaid pays the facility the balance of the Medicaid rate. The community spouse now has $4,066.50 per month and the facility bill is no longer her problem.

When the applicant's income is too small to fill the gap: the increased CSRA

Change one fact. The institutionalized spouse receives $1,400 per month, not $3,200. After the $50 allowance he can shift only $1,350. The community spouse is still $616.50 per month short of the MMMNA. Federal law and SSL § 366-c(8) allow her to request a fair hearing and ask for a CSRA higher than $162,660, large enough to generate the missing $616.50 per month. Because of the income-first rule in 42 U.S.C. § 1396r-5(d)(6), the hearing officer must first attribute all available income from the institutionalized spouse before adding resources, which is why this request only works when his income is exhausted. The method used to convert a monthly shortfall into a resource figure is not fixed by statute; hearing officers have used annuity pricing and interest-rate assumptions, and the resulting allowance varies. The hearing must be requested within 60 days of the agency's notice. A court order of support can accomplish the same result.

Step Three: The House

The home is exempt while the community spouse lives in it, and the home equity limit does not apply when a spouse lives there (42 U.S.C. § 1396p(f)(2)). Transferring the home from the applicant to the community spouse is exempt under 42 U.S.C. § 1396p(c)(2)(A)(i), and we usually recommend it. Two reasons:

• Estate recovery: New York recovers Medicaid paid only from the deceased recipient's probate estate (SSL § 369). A home titled solely in the community spouse's name is not in the recipient's probate estate.
• Control: The community spouse can later sell, refinance, or plan with the home without the agency treating the equity as the applicant's resource.

Once the home is in the community spouse's name, she can do her own long-range planning with it, including a life estate deed or a trust, subject to the lookback for her own future needs. Those tools are covered on our avoiding probate in New York page and the asset-protection guide linked above.

Step Four: Deal With Countable Assets Above the CSRA

Three tools do most of the work in a New York crisis case. They can be combined.

Spousal refusal under SSL § 366(3)(a)

New York is one of the few states where the community spouse may refuse, in writing, to make her income and resources available to the applicant. Under SSL § 366(3)(a), if the applicant is otherwise eligible on his own income and resources, Medicaid must be furnished even though the refusing spouse holds assets above the CSRA. The agency cannot deny the application because of the refusal. The statute also provides that furnishing Medicaid creates an implied contract between the agency and the refusing spouse, and the agency may sue her to recover the cost of care.

How the refusal works in practice:

• Everything above the applicant's $33,038 limit is retitled to the community spouse before the application month.
• The community spouse signs a declaration of refusal that is filed with the application. The agency will still ask for her financial information, and the application must disclose the couple's assets truthfully. Refusal is not concealment.
• The applicant is approved based on his own resources. Medicaid pays the facility at the Medicaid rate, less the applicant's NAMI.
• The agency may then pursue the community spouse for recovery.

The recovery exposure is the part families need to understand before they sign. Three points shape it:

• Measure of the claim: The claim is for the amount Medicaid paid, not the facility's private rate. Medicaid rates are set by the state and are generally well below private rates, so the claim grows more slowly than private-pay spending would.
• Limit on liability: The refusing spouse's liability is measured by her ability to pay, meaning resources above the CSRA and income above the MMMNA. The protected allowances are not reachable.
• Who pursues it: In New York City, HRA has an established practice of sending demand letters to refusing spouses and, in some cases, filing suit in Supreme Court. HRA is frequently willing to negotiate. We cannot promise any discount in any particular file. Outside the city, practice varies by county. Some county DSS offices pursue refusing spouses actively; others rarely do. We review the county's recent practice before advising on refusal.

One more consequence of eligibility: after the month the applicant is found eligible, the community spouse's resources are no longer attributed to him (42 U.S.C. § 1396r-5(c)(4)). Her later planning with her own assets, including gifts for her own future protection, becomes possible, but the timing of any such transfer must be reviewed against both her own future lookback and the agency's recovery claim.

Medicaid-compliant annuity for the community spouse

Because the community spouse has no income limit, converting her excess countable assets into an income stream removes them from the resource count without a transfer penalty. The annuity must meet 42 U.S.C. § 1396p(c)(1)(F) and (G) as implemented in New York by 06 OMM/ADM-5: irrevocable, non-assignable, actuarially sound (the term cannot exceed her life expectancy under the table the agency uses), equal payments with no balloon or deferral, and the State of New York named as remainder beneficiary for at least the amount of Medicaid paid on behalf of the institutionalized spouse. The purchase must be made with the community spouse's funds and in her name.

The trade-offs are concrete. The money is locked into the payment schedule. If she dies during the term, the state collects remaining payments up to its claim before the children see anything. If she later needs care herself, the annuity income counts in her own budget. Against that, the family avoids both a transfer penalty and a spousal refusal recovery claim on the annuitized amount.

Gift-and-loan (promissory note)

When the goal is to preserve assets for children rather than convert them to the community spouse's income, part of the excess is gifted and part is loaned under a promissory note that meets 42 U.S.C. § 1396p(c)(1)(I): a repayment term within the lender's life expectancy, equal payments, and no cancellation at the lender's death. The gift creates a penalty period. The note payments plus the applicant's income pay the facility privately during that penalty. When the penalty ends, Medicaid begins and the gifted portion is kept. The penalty period is calculated by dividing the gift by the DOH regional nursing home rate for the county, and in New York partial months count. The penalty clock does not start until the applicant is in the facility, has applied, and would be eligible but for the gift (42 U.S.C. § 1396p(c)(1)(D)(ii)), so the application is filed right away, not after the penalty.

Allowable spend-down and caregiver agreements

Spending at fair value is not a transfer. Paying down the mortgage, home repairs and accessibility work, replacing a car, prepaying an irrevocable funeral, and paying a family caregiver under a written agreement signed before services begin at a market rate all reduce countable assets without a penalty. Payments to family without a signed agreement will be treated as gifts.

The Medicaid Asset Protection Trust, in brief

A MAPT is an irrevocable trust funded at least five years before a nursing home application. In a crisis case it is usually the wrong tool for the institutionalized spouse because of the 60-month lookback. It can be the right tool for the community spouse's own future, once the applicant is eligible. The design, tax treatment, and timing of a MAPT are covered on our advanced estate planning page and are not repeated here.

Worked New York Scenarios

These examples show the arithmetic. They are not predictions. Facility rates, regional rates, and life expectancies are assumptions stated in each example, and your case will use different numbers.

Scenario A: $400,000 in savings, CSRA plus spousal refusal versus private pay

Henry enters a Queens nursing home. Rose stays in their paid-off house. They have $400,000 in countable savings. Henry's Social Security is $2,400 per month; Rose's is $1,900. Assume the facility's private rate is $17,500 per month and its Medicaid rate is $12,000 per month (Medicaid rates are facility-specific; this is an assumption).

Allowances: Rose keeps $162,660. Henry may keep $33,038. Total protected: $195,698. Excess: $204,302.

Private pay: Henry's income covers $2,400 of the bill, so savings fall by $15,100 per month. The $204,302 excess is gone in about 13.5 months. Only then does Henry apply.

Spousal refusal: The $204,302 and Henry's share above $33,038 are retitled to Rose. Rose signs the refusal. Henry applies in month one. Rose's income shortfall is $4,066.50 minus $1,900, or $2,166.50, so that amount is shifted to her from Henry's income. Henry keeps $50. His NAMI is $2,400 minus $2,166.50 minus $50, or $183.50. Medicaid pays the facility $12,000 minus $183.50, or $11,816.50 per month.

Comparison after 13.5 months: Private pay cost the couple $204,302 of savings. Under refusal, Medicaid has paid about $159,500, which is the most HRA could claim from Rose for that period, and Rose has also received about $29,000 in shifted income that under private pay would have gone to the facility. The monthly exposure under refusal is about $11,800 versus about $15,100 under private pay, roughly 22 percent less, before any negotiation with HRA. The exposure under refusal does not stop at 13.5 months; it keeps growing for as long as Medicaid pays and Rose holds assets above the CSRA. That is why refusal is usually paired with an annuity or gift-and-loan rather than used alone for a long stay.

Scenario B: $250,000 above the CSRA, Medicaid-compliant annuity

Linda, age 70, is the community spouse. After the CSRA and her husband's $33,038, the couple has $250,000 in excess countable assets. Linda buys a single-premium immediate annuity in her name with the $250,000, structured to meet the requirements above, with a 10-year term (shorter than her life expectancy under the applicable table) and the State of New York as primary remainder beneficiary. At current fixed rates a 10-year term on $250,000 produces roughly $2,150 per month; the exact figure depends on the rate the carrier offers.

• Resource count: The $250,000 is no longer a countable resource. The couple is at the allowances in the month after purchase, and the husband applies.
• Income effect: Linda's income rises from $1,900 to about $4,050 per month, just under the $4,066.50 MMMNA, so only about $16.50 per month is shifted from her husband. Nearly all of his income above $50 becomes NAMI paid to the facility.
• Over the term: Linda receives about $258,000 over 10 years. If she dies in year four, the state's remainder claim attaches to the remaining payments up to what Medicaid paid for her husband.
• No recovery claim: There is no spousal refusal and no transfer penalty on the annuitized amount.

Scenario C: $200,000 above the CSRA, gift-and-loan

Tom is in a Manhattan facility with a private rate of $17,000 per month. His income is $2,500 per month. After his wife's CSRA and his own allowance, $200,000 remains. Assume a DOH regional rate for the New York City region of $15,000 per month (DOH publishes the actual rate each year; recent New York City rates have been in the mid-teens of thousands).

• Gift: $100,000 to their daughter. Penalty: $100,000 divided by $15,000, or 6.67 months.
• Loan: $100,000 to the daughter under a compliant note repaying $15,000 per month over 6.67 months.
• Cash flow during the penalty: $15,000 note payment plus $2,500 income equals $17,500 per month, which covers the $17,000 bill.
• Application: Filed immediately so the penalty starts running under 42 U.S.C. § 1396p(c)(1)(D)(ii). The agency issues a notice of the penalty period.
• Result: After 6.67 months the penalty ends and Medicaid begins. The $100,000 gift stays with the daughter. Half of the excess was preserved rather than none.

In a married case the gift-and-loan is often compared against an annuity for the community spouse, which preserves the whole excess as her income rather than half of it as a gift to children. Which one fits depends on whether the community spouse needs the income and whether the family's goal is her security or an inheritance.

Two Issues Other Guides Skip

The community spouse's IRA

New York treats a retirement account differently depending on whether it is in payout status. Under the Medicaid Reference Guide section on retirement funds and 18 NYCRR 360-4.6, an IRA, 401(k), or similar account that is in payout status, meaning the owner is taking periodic distributions, is not counted as a resource; the distributions are counted as income. An account that is not in payout status is counted at its full value as a resource. For the community spouse this is a straightforward lever: putting her IRA into payout status removes its balance from the CSRA calculation, and because she has no income limit the distributions are hers. The distributions do count when the agency computes her MMMNA shortfall, so they reduce or eliminate the income shifted from her husband. Required minimum distributions satisfy payout status; if she is below the RMD age, a periodic distribution schedule based on life expectancy is used. The institutionalized spouse's own IRA in payout status is likewise exempt as a resource, with the distributions flowing into his NAMI.

What happens if the community spouse dies first

The protections on this page assume the community spouse outlives the institutionalized spouse. Often she does not. If her will, joint accounts, and beneficiary designations leave everything to her husband in the nursing home, he inherits countable assets, loses eligibility, and spends down what she protected. Four steps address this:

• Update her will: Assets intended for the institutionalized spouse's benefit can be left to a testamentary supplemental needs trust under EPTL 7-1.12, which is not counted as his resource, or left to children.
• Retitle accounts: Joint accounts and payable-on-death designations naming the institutionalized spouse pass outside the will and defeat the plan.
• Plan for the right of election: Under EPTL 5-1.1-A a surviving spouse may elect to take the greater of $50,000 or one-third of the net estate. Medicaid may treat the institutionalized spouse's failure to exercise that right as a transfer of assets. This issue needs specific attention in the drafting and may require a timely, documented decision when the estate is administered.
• Expect the recovery claim to follow her estate: If spousal refusal was used, HRA or DSS may file its recovery claim against her estate.

If the house was retitled to her and passes to the husband at her death, it remains exempt while he intends to return home, but it then sits in his probate estate at his death and becomes subject to estate recovery and the equity limit. Her will should direct the house elsewhere.

Frequently Asked Questions (reviewed January 2026)

Can Medicaid take my house if my husband goes into a nursing home in New York?

Not while you live in it. The home is exempt during your lifetime occupancy and the equity limit does not apply while a spouse lives there. After death, New York recovers only from the Medicaid recipient's probate estate under SSL § 369. If the house is retitled to you, the community spouse, it is not in his probate estate. Your own will should then direct the house to someone other than him.

Does New York still allow spousal refusal in 2026?

Yes. SSL § 366(3)(a) remains in force. Repeal has been proposed in past state budget bills and has not been enacted as of the review date. The agency retains the right to sue the refusing spouse for the cost of care, and that exposure must be weighed before using it.

How much income can the healthy spouse keep?

All of her own income, with no cap. If her own income is below $4,066.50 per month (2026), income is shifted from the institutionalized spouse to bring her to that figure. If his income is not enough to fill the gap, she can seek an increased resource allowance at a fair hearing under SSL § 366-c(8).

Is it too late to plan if my wife is already in a nursing home?

Usually not. Transfers between spouses are exempt at any time. Spousal refusal, a Medicaid-compliant annuity, and the gift-and-loan method are designed for use after admission. What is lost by waiting is the money spent at the private rate between admission and the application month, so the planning should start in the first weeks, not after the savings are gone.

Does the 30-month community Medicaid lookback affect a nursing home application?

No. The 30-month lookback enacted in 2020 applies to community-based long-term care (home care), and as of the review date it has not been implemented. Nursing home applications use the 60-month lookback.

Related New York Guides

• Asset Protection in New York: Moving Assets Under One Spouse (long-range planning while both spouses are healthy)
• Advanced New York Estate Planning Techniques (Medicaid Asset Protection Trusts)
• Supplemental Needs Trusts in New York (protecting an inheritance for a spouse on Medicaid)
• How to Avoid Probate in New York (keeping the home out of estate recovery)
• Powers of Attorney and Advance Directives (the authority needed to carry out a crisis plan)

Speak With a New York Medicaid Planning Attorney

The order of these steps matters. A transfer made in the wrong month, an annuity that names the wrong remainder beneficiary, or a note with a balloon payment can cost months of eligibility. We prepare the resource assessment, the spousal transfers, the refusal declaration or annuity, and the application, and we handle fair hearings and HRA recovery demands. The Law Offices of Albert Goodwin are located in Midtown Manhattan and represent families in all five boroughs, Long Island, and Westchester. Call 212-233-1233 or email [email protected] to schedule a consultation.

This article is general information about New York Medicaid and elder law. It is not legal advice and does not create an attorney-client relationship. Medicaid figures change each January and agency practice changes without notice. Confirm current figures and consult an attorney about your own facts before acting.