Over the last several months, the United States economy has been hit hard as a result of battling the Covid-19 pandemic. Unemployment has been at a record high due to job losses caused by mandatory shut-down orders across the country. As part of the Coronavirus Aid, Relief, and Economic Security Act (Cares Act) passed into law in late March, most taxpayers have received, or will receive, a “stimulus payment” from the federal government to try and ease the financial burden caused by the pandemic. If your mother is in a nursing home, can the facility take her stimulus check? A Vero Beach elder law attorney at Kulas & Crawford explains the status of stimulus checks for the residents of a nursing home.
Long-Term Care Costs
If you have a parent in a long-term care facility, you already know how expensive LTC costs are. Nationwide, the average cost of a year in an LTC facility was over $100,000 in 2019 – and if you are a Florida resident you can expect just over the national average. Not surprisingly, over half of all seniors currently in LTC rely on Medicaid to help cover the high cost of that care. The Medicaid eligibility and participation rules, however, are complex. Once an applicant is approved for Medicaid, almost all of his/her income must be used to help cover the cost of LTC. Typically, that means if your mother receives income from almost any source, that income can be taken by the nursing home and be applied toward her bill. Does that apply to her stimulus check too?
Cares Act Stimulus Checks
In April, the Internal Revenue Service began issuing payments, either via direct deposit or through the issuance of a paper check, to all eligible taxpayers. These payments are referred to in the law as “2020 recovery rebates.” The Internal Revenue Service (IRS) refers to the payments issued in 2020 as economic impact payments, whereas some media reports call them “stimulus payments.” While it may not matter what you call the payments, it makes a huge difference in how the law classifies the payments—particularly if a nursing home confiscates the payment. In fact, the federal government has made it clear that the economic impact payments are considered tax credits and tax credits do not count as “resources” for federal benefits programs like Medicaid. As such, a nursing home or assisted living facility cannot take that money from residents simply because the resident is on Medicaid. Specifically, 26 U.S. Code § 6409 states as follows:
“Notwithstanding any other provision of law, any refund (or advance payment with respect to a refundable credit) made to any individual under this title shall not be taken into account as income, and shall not be taken into account as resources for a period of 12 months from receipt, for purposes of determining the eligibility of such individual (or any other individual) for benefits or assistance (or the amount or extent of benefits or assistance) under any Federal program or under any State or local program financed in whole or in part with Federal funds.”
Both the Cares Act itself and 26 U.S. Code § 6409 provide clear guidance on the subject. The stimulus check money is not income and, therefore, a nursing home may not legally take your mother’s stimulus check under any circumstances.
If a nursing home has confiscated, or has threatened to confiscate, your mother stimulus check consult with an elder law attorney because the facility is not entitled to that money.
Contact Port St. Lucie Trust Lawyers
To learn more, please join us for an upcoming FREE seminar. If you have additional questions or concerns about the costs involved in administering a trust, please contact the experienced Port St. Lucie trust lawyers at Kulas & Crawford by calling (772) 398-0720 to schedule a consultation.