Arkansas Medicaid Personal Needs Allowance (2026): What You Keep

$40 a month is what the Arkansas Medicaid Personal Needs Allowance lets a nursing-home resident keep for personal spending. When Medicaid pays for a nursing facility, the resident's monthly income goes toward the cost of care after a few protected deductions, and the first of them is a small slice for the things the facility doesn't provide, clothing, a salon visit, a phone bill, a birthday card for a grandchild. Here's how that allowance works in Arkansas, where it fits in the money math, and the one rule veterans should know before their pension changes.1

In This Guide

• What the Arkansas Medicaid Personal Needs Allowance Is
• The Arkansas Medicaid Personal Needs Allowance vs. the Federal Floor
• How the Money Is Held: The Resident Trust Fund
• Where the Allowance Fits in Your Patient Liability
• What the Facility Must Provide Without Touching Your Allowance
• If You're a Veteran: The VA Pension Rule
• Frequently Asked Questions
• Learn More

What the Arkansas Medicaid Personal Needs Allowance Is

When someone moves into a nursing home and Medicaid pays for their care, the arrangement works differently than most people expect. The resident doesn't pay a bill out of pocket, and they don't hand over a fixed monthly amount either. Instead, Arkansas Medicaid, which is run by the Arkansas Department of Human Services (DHS), directs the resident's monthly income toward the cost of the facility once a set of protected amounts has been taken out.2 Their Social Security check, a pension, an annuity: whatever is left after those protected amounts flows to care.

The Personal Needs Allowance, or PNA, is the part the state carves out and gives back to the resident to spend on themselves. It exists because a nursing facility doesn't cover everything a person needs to live with dignity. The per-day rate Medicaid pays the facility covers room, meals, nursing, and basic hygiene supplies, but it doesn't cover a new pair of shoes, a magazine subscription, snacks from the vending machine, a styling appointment at the salon down the hall, or the phone plan that keeps someone connected to their family.4 The allowance is what pays for those.

Who gets it? Any Arkansas Medicaid recipient living in a nursing facility, once Medicaid is covering the stay. The allowance isn't something you apply for separately. It's built into the way the state calculates how much of your income goes to the facility each month, and it's the first amount subtracted in that calculation, so you keep it automatically.2 In Arkansas that protected amount is $40 a month for most residents.1

One important point that families sometimes miss: the allowance is small on purpose, but it's yours. The facility can't take it, can't apply it to your care bill, and can't charge it for services that are already included in what Medicaid pays them. We'll come back to that.

The Arkansas Medicaid Personal Needs Allowance vs. the Federal Floor

For 2026, the Arkansas Medicaid Personal Needs Allowance is $40 per month for most nursing-facility residents.1 One exception written into Arkansas DHS policy covers SSI: a resident whose only income is Supplemental Security Income keeps $30 per month instead.1 For a resident who has Social Security or a pension in addition to or instead of SSI, the figure to plan around is $40.1 (A second exception, for veterans whose pension has been cut to $90, is covered below.)

To put Arkansas's number in context, it helps to know that the allowance is set against a federal minimum. Federal Medicaid law requires every state to protect at least $30 per month for an institutionalized individual, and $60 per month for an institutionalized couple when both spouses are aged, blind, or disabled and their incomes are counted as available to each other.2 That $30 floor has been in place since the Omnibus Budget Reconciliation Act of 1987 wrote it into the statute, effective for calendar quarters beginning on or after July 1, 1988, and Congress has never raised it or tied it to inflation.2

The federal amounts are a floor, not a ceiling: a state must set its nursing-facility allowance at or above $30 and is free to set it higher. Tennessee, for example, subtracts a $70 allowance from a nursing-facility resident's income.2 Arkansas's $40 is $10 above the floor.1 That's worth knowing, because it means a resident in Arkansas has a tight personal budget, and planning for larger personal expenses, a new hearing-aid battery, seasonal clothing, needs a little more forethought than it would in a state that protects more.

How the Money Is Held: The Resident Trust Fund

Once the allowance is set aside, where does it actually go? Most residents don't manage a bank account down the hall from their room, so federal rules give facilities a structured way to hold and track the money on a resident's behalf. It's called a resident trust fund, and it comes with real protections.

Under the federal nursing-facility requirements, a resident has the right to manage their own money, and a facility can never require a resident to deposit their funds with it.5 If a resident does choose to deposit money with the facility and authorizes it in writing, though, the facility has to act as a fiduciary, meaning it's legally responsible for handling the funds honestly and carefully. That responsibility comes with specific duties: for a Medicaid resident, any personal funds over $50 have to sit in an interest-bearing account, separate from the facility's own operating money.5

The facility also has to keep a full, separate accounting of each resident's money, with no mixing of resident funds and facility funds, and it has to give the resident a statement every quarter and let them see the record any time they ask.5 If a resident dies, the facility has to turn over the remaining balance and a final accounting within 30 days to whoever is handling the estate.5

For a family, the practical takeaway is this: you can and should ask to see the quarterly statement. It shows exactly what went into the trust account and what came out, and it's the clearest way to confirm the allowance is being handled the way it should be.

Where the Allowance Fits in Your Patient Liability

To really understand the allowance, it helps to see the whole money calculation it sits inside. When Medicaid pays for a nursing home, the state runs what's called a post-eligibility budget, sometimes called the patient-liability or share-of-cost calculation. It works out how much of the resident's own income goes to the facility each month and how much is protected for other purposes.

The calculation starts with the resident's total monthly income and then subtracts a series of protected amounts. Federal rules list the Personal Needs Allowance first among those deductions, so the resident keeps their $40 before anything else is figured.2,1 After that, the budget protects other amounts, including an allowance for a spouse living at home and health-insurance premiums such as those for Medicare, along with other medical costs no one else pays.2 For a spouse at home, Arkansas follows the federal spousal-impoverishment rules: the allowance tops up the spouse's own income toward a minimum monthly maintenance needs standard of $2,705 a month (effective July 1, 2026), plus any excess shelter allowance, capped at $4,066.50, and it's deducted only to the extent the resident actually makes that income available to the spouse.6,1 Whatever income remains after those deductions is the resident's patient liability, the amount that goes to the facility, and Medicaid covers the rest of the bill.

So the allowance and the patient liability are two sides of the same subtraction. Income above the protected amounts goes to the facility; the $40 allowance is the piece the resident keeps to spend on themselves.1

There's a related wrinkle worth flagging for higher-income applicants. Arkansas is an income-cap state for long-term-care Medicaid, meaning an applicant whose gross monthly countable income is above the program's cap, $2,982 in 2026, has to set up a special trust, often called a Miller trust or qualified income trust, to qualify in the first place. VA Aid and Attendance payments aren't counted toward that cap. Under DHS's current policy manual and its Income Trust Fact Sheet, only the countable income above the cap has to go into the trust, not all of it, and the long-term-care caseworker can walk a family through the details. Putting only the excess in the trust doesn't shrink the patient liability, though: it's still figured from all gross income.1 That's a separate step from the personal needs allowance, but the two often come up in the same conversation, because both are about how income is treated once someone needs Medicaid to pay for a nursing home.

What the Facility Must Provide Without Touching Your Allowance

Here's a point that protects your allowance more than almost anything else, and it catches families off guard: a lot of what a nursing home provides is already paid for by Medicaid's daily rate, and the facility is not allowed to bill you for it. That means those things can't quietly eat into the $40.1

Federal rules spell out a list of routine items and services that are built into the payment the facility already receives, and during a covered Medicaid stay the facility can't charge the resident for any of them.4 The list includes:

• Nursing services and food and nutrition services
• An activities program, and general upkeep of the room and bed
• Routine personal hygiene items, things like soap, a toothbrush and toothpaste, a comb and brush, a razor and shaving cream, denture adhesive and cleaner, and moisturizing lotion
• Incontinence care and supplies, towels and washcloths, and over-the-counter medications
• Hair and nail hygiene services, help with bathing, and basic personal laundry

Because those are covered by the daily rate, the facility may not bill them to your personal funds.4 The ban isn't on every charge, though. Federal rules let a facility bill your funds for extras such as a phone, a TV, personal clothing, grooming beyond what the daily rate covers, or a private room that isn't medically needed, but only if you asked for the item, it isn't needed to meet your care plan, the facility told you there would be a charge, and Medicare or Medicaid isn't paying for it.4 In plain terms, your $40 is meant for the extras that go beyond this baseline, a preferred brand, a salon perm rather than a basic trim, restaurant takeout, a streaming subscription, not for the standard soap and towels the facility owes you as part of care. If you see a charge against the trust account for something on this list, that's a question worth raising with the facility's business office, and, if it isn't resolved, with the state.

If You're a Veteran: The VA Pension Rule

Veterans have one extra rule that's easy to get wrong, and getting it right can mean keeping more money each month.

If a veteran who has no spouse and no dependent child is covered by Medicaid for nursing-home care, federal law caps their monthly VA pension at $90 for any period after the month they're admitted.3 At first glance that sounds like a cut, and it is a reduction, the pension drops to $90, but the important part is what happens to that $90.

One thing to check before you apply that cap at all is where the veteran is living. Federal law defines the nursing facilities the $90 cap reaches, and it deliberately leaves out a state veterans home for which the VA makes per diem payments for nursing home care. A single, childless veteran covered by Medicaid in a state veterans home the VA pays that per diem for is outside the $90 cap, so the figure shouldn't be applied to that stay at all.3 If a veteran in the family is in or headed for a veterans home, ask the home's business office whether the VA pays it a per diem for nursing home care before you plan around any pension number.

The retained $90 does not go to the facility. Federal law specifically says the Medicaid payment to the nursing home can't be reduced by the pension amount the veteran gets to keep, so the state can't recover it that way.3

Here's the part families most often get wrong: that federal rule doesn't say whether the $90 comes on top of the state's personal needs allowance or in place of it. It caps the pension and it protects the facility's payment, and that's all. Whether a single, childless veteran ends up with the $90 plus the state's allowance, or with the $90 standing in for it, is a state decision, and states have gone both ways on it.3 Arkansas's answer is the second: a single veteran, or the spouse of a veteran, with no dependents whose VA pension has been reduced to $90 keeps the full $90 as the allowance, with no additional $40.1 Check the notice that sets the resident's share of cost, and raise it with your Arkansas DHS county office if it shows something different.

If a veteran in this situation is still receiving a full VA pension after Medicaid starts paying for the nursing home, that's a sign the VA hasn't yet adjusted the payment. Federal law says the veteran isn't liable to repay pension the VA overpaid because it failed to make the reduction, unless that failure came from the veteran willfully concealing the information the VA needed, so tell the VA about the Medicaid coverage promptly.3 Ask the VA, too, which month the reduction starts: the statute ties it to the month after admission, but the VA's own regulation ties it to the month after Medicaid payments begin, and the two can differ when Medicaid approval comes months after the move.3

Learn More

Find personalized help understanding your Arkansas nursing-home Medicaid budget at brevy.com.

The information on Brevy.com is for educational purposes only and is not a substitute for professional legal, financial, or medical advice. Rules vary by state and program and change frequently. Always verify with the relevant agency or a qualified professional. Brevy is not a law firm, financial advisor, or healthcare provider.