When One Spouse Needs a Nursing Home: Protecting the Spouse at Home

Medicaid has rules so the spouse at home isn’t left with nothing. Here’s how much savings and income they can keep in 2026.

By the Care & Place team · Updated October 2026

When one spouse needs long-term nursing home care, the other often worries about losing their home and savings. Medicaid has rules to stop that from happening.

These federal rules are called the “spousal impoverishment” rules. They protect part of the couple’s savings and income for the spouse who stays at home.

How the rules work

Medicaid looks at a married couple’s savings together, no matter whose name they are in. A set amount is protected for the spouse at home. The rest must usually be spent on care before Medicaid pays.

On Medicaid forms, the spouse in the nursing home may be called the “institutionalized spouse.” The spouse at home is the “community spouse.”

Income is treated differently. The at-home spouse’s own income, such as their Social Security or pension, is not counted toward the nursing home spouse’s eligibility.

Savings the spouse at home can keep

The protected amount is called the community spouse resource allowance. Each state sets its own amount within federal limits.

For 2026, the spouse at home keeps between $32,532 and $162,660 of the couple’s savings, depending on the state. Check your state’s Medicaid page to see where your state falls.

What usually doesn’t count

Some things are not counted as savings at all. These usually include:

• The home, including the land it sits on, while the spouse lives there.
• Household goods and personal belongings.
• One car.

Bank accounts, investments and second properties usually do count. States have their own rules on details, so check with your state Medicaid office.

Income the spouse at home can keep

The spouse at home is also guaranteed a minimum monthly income. This is called the minimum monthly maintenance needs allowance.

From July 1, 2026, it is at least $2,705 a month in most states. It is $3,381.25 in Alaska and $3,111.25 in Hawaii.

If the at-home spouse’s own income is below that amount, part of the nursing home spouse’s income can be set aside to make up the difference. That money must actually be given to the spouse at home.

High housing costs can raise this allowance. In 2026, the federal cap is $4,066.50 a month, unless a fair hearing or court order allows more.

The nursing home spouse keeps a small personal needs allowance. Most of their remaining income then goes toward the cost of their care.

The “income first” rule

Sometimes the spouse at home asks to keep more savings, so the savings can produce more income. Before agreeing, the state must first count the income the nursing home spouse could pass to them.

Only if that income still falls short can the state protect extra savings. This is called the “income first” rule, and it is required by federal law.

Asking for more through a fair hearing

If the standard amounts are not enough, either spouse can ask for a fair hearing. This is a formal review of the state’s Medicaid decision.

At a hearing, the spouse at home can ask for more income if exceptional circumstances cause significant financial hardship. They can also ask to keep more savings if the standard amount cannot bring their income up to the minimum.

Ask your state Medicaid office how to request a hearing and how long you have to do so. Keep copies of bills that show your monthly costs.

Gifts between spouses

Transfers between spouses do not trigger a Medicaid penalty. Gifts to children or others can, if made within five years. Our guide to the Medicaid look-back period explains how that works.

Steps to take now

• List all savings, accounts and property, and whose name each is in.
• Gather recent statements for each account, and each spouse’s income.
• Use our cost planner. It asks about a spouse at home and estimates what may be protected.
• Read your state’s Medicaid rules on our site.
• Ask the nursing home whether it accepts Medicaid, and whether residents can stay after switching to it.

For free public help, contact your state Medicaid office. Your Area Agency on Aging, found through the Eldercare Locator, can point you to local benefits counseling.