Cares Act and economic stimulus payments
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. One-time checks in the amount of $1,200 will go to individuals ($2,400 for couples who file joint taxes) who earned less than $75,000 ($150,000 for joint filers) on their most recent tax returns, either the 2018 or 2019 return, whichever is latest. Individuals earning up to $99,000 ($198,000 for joint filers) will receive smaller checks. Additionally, families with dependent children under age 17 years are entitled to $500 per child in the household. The first wave of direct deposits went out beginning April 11th.
This is a welcome sum of money for individuals and families since so many people have been severely economically impacted by the closure of businesses and stay at home orders. However, what if one is receiving public benefits, such as SSI or Medicaid Assistance? Does the payment result in the beneficiary being over-resourced? Guidance from the PA Department of Human Services (DHS) has been issued to help persons and families through these questions and issues.
Many family members who have residents in nursing homes who are receiving care under Medicaid coverage, or receiving Medicaid covered services in the community are concerned that the stimulus money received will affect participant resource amounts, and thus they could be over the resource limit. The stimulus payment that is received is considered an excluded resource to the extent that it is spent within 12 months. It is not considered income and will not be determined to be part of patient pay as it is excluded income. The Medicaid recipient can use the money how she or he wishes, as long as it is spent within 12 months of receipt. The payment should be reported to the County Assistance Office (CAO) caseworker. In other words, it is not required that the money be given to the facility. This situation is true for those who receive SSI even if not in a facility. The stimulus payment is neither income nor an asset but must be spent within 12 months of receipt.
For those participants in Community Health Choices, the Living Independence for the Elderly (LIFE) program, OBRA waiver, and Act 150 program, the same situation applies. The portion of the economic stimulus payment not spent within 12 months of receipt will become a countable resource.
The economic stimulus payments are excluded as income and excluded as a resource in determining eligibility all TANF, MA and LIHEAP programs. For SNAP, the payments are excluded as income in the month of receipt and are excluded from resources for 12 months.
If you have any questions, or require assistance, contact the elder law team at OWM Law at 610-323-2800, or email Rebecca Hobbs, CELA© at rhobbs@owmlaw.com or Kathleen Martin, CELA© at kmartin@owmlaw.com. We are ready to help.
The legal advice in this column is general in nature, Consult your attorney for advice to fit your particular situation.