If one spouse needs nursing home care or nursing home-level of care in a community-based setting, the other spouse does not necessarily have to go broke to pay for it. New Jersey’s Medicaid long term care rules include “spousal impoverishment” protections that let the healthy spouse (the community spouse) keep the home, a set share of the couple’s savings, and a monthly income floor. We help families with those rules so the ill spouse gets care that is covered by Medicaid sooner and their spouse stays secure.
Who is the “community spouse?”
In Medicaid terms, the spouse who needs care is the applicant, there is a clinical standard that is applied. The non-applicant spouse is sometimes called the community spouse or the well spouse. When only one of you applies for Medicaid long term care, the state does not treat your money the way it would for a single person. It looks at the two of you together, then sets aside a protected share for the spouse at home. The marital home, a vehicle and the couple’s personal property are also exempted.
How are assets and income handled?
A lot of people assume they must spend down to nothing before Medicaid long term care steps in. That is not how it works for married couples. New Jersey adds up the couple’s countable assets on the day the ill spouse becomes continuously institutionalized, a date known as the snapshot (usually the first month of the hospitalization). The community spouse then keeps a protected share, and certain items like the home and one car do not count at all. Careful asset preservation planning can often protect more. If you want a sense of what that looks like for your family, tell us about your situation.
Income follows its own rules. The state looks only at the applicant’s income when deciding who qualifies for Medicaid long term care, but if gross income is greater than three times SSI for the year, a Qualified Income Trust account would be needed. Post-eligibility income can be shifted to a lower-earning community spouse based on federal income floors listed on their Medicaid spousal impoverishment page.
What about “spousal refusal”?
You may have read about spousal refusal, where the community spouse formally declines to make their income and assets available for care. This is more liberally applied in states that are not New Jersey, however, it is based on real federal law and may be applicable depending on facts but can invite pushback from the state. There are other tools too, such as Medicaid-compliant annuities which convert countable assets into exempt income for the community spouse. Many of these choices tie into your broader estate planning, so it helps to look at the whole picture at once. See how we help New Jersey families if you are not sure where to start.
Frequently asked questions
1. Can a healthy spouse keep the house?
Usually, yes. The marital home is exempt while the community spouse lives there, so it does not count toward the spend-down. It can still come up later through estate recovery, which is one reason to plan early. A revised estate plan is an essential part of spousal Medicaid planning.
2. Will I lose my own Social Security or pension?
No. Post-eligibility contribution to cost only applies to the applicant spouse’s income. Your own Social Security or pension as the non-applicant spouse is not counted against your husband or wife’s contribution.
3. How much can the at-home spouse keep?
In 2026, the community spouse keeps a share of countable assets between $32,532 and $162,660, plus exempt items like the home and one car. The applicant spouse is generally left with $2,000.
4. Should we give money to our children to qualify faster?
Probably not; talk to us first! Medicaid looks back five years at gifts and transfers, and moving money without a plan can trigger a penalty that delays care. If you would rather keep your spouse at home for now, our guide to caring for an aging loved one at home covers your options.
We can help you protect what matters
You should not have to choose between your spouse’s care and your own security. With the right approach to Medicaid long term care, including a well-prepared nursing home Medicaid application, you can have both. As a New Jersey elder care law firm, we have guided many couples through this exact moment. If your husband or wife is facing long term care, get in touch with our team for advice built around your family.