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

The Illinois Medicaid Personal Needs Allowance lets a nursing-home resident on Medicaid keep $60 a month of their own money for personal spending, while most of their other income goes toward care.1 That $60 is small, but it's the resident's own money, protected by law, and the rules about how it's held and what it can and can't be spent on matter more than the amount suggests. Here's how it works, where the figure comes from, and what families should watch for.

In This Guide

• What the Illinois Medicaid Personal Needs Allowance Is, and Who Gets It
• How the Illinois Medicaid Personal Needs Allowance Compares to the Federal Floor
• How the Money Is Held: Your Resident Trust Fund
• How Much Goes to the Nursing Home? Where the Allowance Fits
• What the Facility Must Provide and Cannot Charge to Your Allowance
• If You're a Veteran: The VA Pension Cap
• Frequently Asked Questions
• Learn More

What the Illinois Medicaid Personal Needs Allowance Is, and Who Gets It

When someone qualifies for Illinois Medicaid to pay for a nursing home, the state doesn't take every dollar of their income. It leaves a small, protected amount the resident keeps entirely for themselves, called the Personal Needs Allowance. In Illinois the Personal Needs Allowance is $60 a month for a resident of a skilled nursing facility.1 Everything else in their monthly income, after allowed deductions such as health-insurance premiums, goes toward their share of the nursing-home bill, with Medicaid covering the rest.

The allowance exists for a simple reason. A nursing home covers room, meals, nursing care, and basic hygiene items, but it doesn't cover the ordinary things that make daily life feel like your own: a haircut at a price above what the facility provides, a phone plan, snacks from the vending machine, new clothes, stamps, a birthday gift for a grandchild, a magazine subscription. The Personal Needs Allowance is the money set aside so a resident can pay for those things without asking anyone's permission.

Who gets it? An Illinois Medicaid recipient living in a Medicaid-certified nursing facility whose care Medicaid is paying for. The allowance is part of what's called the post-eligibility process, the calculation the state runs after it has already decided the person qualifies. It applies whether the resident's income comes from Social Security, a pension, or another source, but $60 is the most a resident keeps, not a guaranteed amount. Illinois applies it to residents whose income after deductions is at least $60, and a resident on SSI doesn't reach it, because Social Security drops an SSI recipient's income to $30 a month on entering a skilled nursing facility.1 The amount also depends on the setting. The Illinois Department of Human Services policy manual sets the allowance at the same $60 in an intermediate care facility for people with intellectual disabilities (ICF/IID), a Medically Complex for the Developmentally Disabled (MC/DD) facility, or a Specialized Mental Health Rehabilitation Facility (SMHRF), and at $120 for someone living in a Supportive Living Program setting.1

The figures in the table come from the Illinois policy manual.1

Illinois administers its Medicaid program through the Illinois Department of Healthcare and Family Services (HFS), with financial eligibility handled by the Illinois Department of Human Services (DHS). The $60 nursing-facility amount comes from state law, 305 ILCS 5/5-35.5.1

How the Illinois Medicaid Personal Needs Allowance Compares to the Federal Floor

Federal law sets a floor, not the final number. Under the rules every state Medicaid program must follow, an institutionalized individual has to be allowed to keep at least $30 a month, with at least $60 a month protected for an institutionalized couple when both spouses are aged, blind, or disabled and their incomes are counted as available to each other. Those federal minimums have been frozen at $30 and $60 since 1988.2 States are free to set a higher allowance; the federal figure is a floor states can build on, not a cap.

For a long time Illinois sat right at that floor. The state's nursing-facility allowance was $30 a month, the bare federal minimum, until the legislature doubled it. Effective January 1, 2024, under 305 ILCS 5/5-35.5, Illinois raised the Personal Needs Allowance for skilled-nursing-facility residents to $60 a month.1 That's where it stands for 2026.

Doubling from $30 to $60 sounds modest in absolute terms, and it is. But the $30 federal floor hasn't changed since 1988, and residents had to stretch it across haircuts, clothing, and everything else. Illinois now protects double the federal minimum.1,2

How the Money Is Held: Your Resident Trust Fund

A resident's $60 a month has to be kept somewhere, and federal nursing-home rules are specific about how. Under 42 CFR 483.10(f)(10), a resident has the right to manage their own money, and a facility cannot require anyone to deposit their personal funds with it.4 If a resident chooses to deposit the money with the nursing home, then once the resident gives written authorization the facility must act as a fiduciary and follow strict handling rules.4

Here's what that means in practice. When the facility holds a Medicaid resident's funds, it must deposit any balance above $50 in an interest-bearing account kept separate from the facility's own operating accounts.4 The facility has to keep a full, separate accounting of each resident's money, can't mix it with facility funds, and must make each resident's financial record available through quarterly statements and on request.4 This pooled, individually-tracked account is usually called the resident trust fund or resident trust account.

A few practical things follow from this. First, a family can and should ask for a statement of the account; the facility is required to keep one. Second, the money is the resident's property, so when the resident is discharged or dies, the facility must convey the balance and a final accounting within 30 days, to the resident or, after a death, to whoever is administering the estate.4 Third, letting the facility hold the money is a choice, not a requirement. Because the facility can't require the deposit, a resident or family who prefers can keep managing the money outside the facility.4

How Much Goes to the Nursing Home? Where the Allowance Fits

To see why the $60 matters, it helps to understand the larger calculation it's part of. When Medicaid pays for a nursing home, the resident is still expected to contribute nearly all of their own income toward the cost. That expected contribution is called the patient liability, or the resident's share of cost, and Medicaid covers the rest of the cost of care.1

The Personal Needs Allowance is the first thing carved out of the resident's income before that contribution is calculated. Working through it in order:1,2

1. Start with the resident's total monthly income.
2. Subtract the $60 Personal Needs Allowance they keep.1
3. Subtract any allowance paid to a spouse still living in the community.
4. Subtract certain health-insurance premiums, such as Medicare premiums.
5. What remains is the patient liability the resident owes the facility each month.

The $60 never reaches the facility.1 It's the one piece of income the resident holds back for themselves.

If the resident is married and their spouse still lives at home, Illinois protects part of the couple's income for that spouse so they aren't left destitute. Illinois's maintenance needs standard for an at-home spouse is $4,066.50 per month for 2026. It isn't a sum the spouse automatically gets: the Community Spouse Maintenance Needs Allowance is that standard minus the at-home spouse's own gross income, and it comes out of the resident's income only to the extent that income is actually given to the spouse.1 That protection is separate from the resident's own $60 allowance, and the $60 is deducted first.1

One more Illinois-specific point. Illinois handles income above its standard through spenddown, so a long-term-care applicant whose income runs above the standard limit is approved for spenddown rather than turned away, unless they say in writing that they don't want it.1 In plain terms, Medicaid doesn't pay until the person's medical bills, paid or unpaid, equal or exceed the monthly spenddown amount.1 For a nursing-home case, the state's policy manual treats it as spenddown once countable income or excess resources are at least $1 over the AABD (Aid to the Aged, Blind, and Disabled) medical standard for one person, and nursing-home charges count toward the spenddown at the private rate.1 The allowance rule itself doesn't change: a resident on long-term-care Medicaid in a skilled nursing facility pays their income to the facility and keeps up to $60.1

What the Facility Must Provide and Cannot Charge to Your Allowance

A frequent and expensive misunderstanding is that the $60 has to cover routine care items. It doesn't. Federal nursing-home rules list a set of items and services that are already included in the facility's daily Medicaid payment, and during a Medicaid-covered stay the home is not allowed to bill the resident, or draw down their Personal Needs Allowance, for any of them.5

Under 42 CFR 483.10(f)(11)(i), seven categories the facility must provide as part of its rate are nursing services, food and nutrition services, an activities program, room and bed maintenance, routine personal hygiene items and services, medically-related social services, and hospice services the resident elects that Medicare or Medicaid pays for.5 The personal hygiene category is broader than families expect. It covers things like:5

• Hair-hygiene supplies, a comb and a brush
• Bath soap, a razor and shaving cream
• A toothbrush, toothpaste, denture adhesive and denture cleaner
• Moisturizing lotion
• Incontinence care and supplies

If a facility is charging a resident's allowance for standard-issue soap, incontinence briefs, or basic toiletries, that's worth questioning, because those are the home's responsibility under federal law.

What the allowance is for is the extras beyond that baseline: grooming beyond what Medicaid pays for, personal clothing, a telephone, snacks, reading material, outside social events, gifts, and similar discretionary spending. Federal rules let a facility charge a resident's funds for items like these only if the resident asks for them, they aren't needed for the resident's care plan, the facility says in advance there will be a charge, and Medicare or Medicaid isn't paying for them.5 The distinction is between what the facility owes every resident as part of care and what a resident chooses to buy for themselves. When something the home should be providing gets billed to the allowance, a family can raise it with the facility and, if needed, with the Illinois Long-Term Care Ombudsman. Ask the facility for the resident's most recent trust-fund statement first, so you can point to the specific charges.4

If You're a Veteran: The VA Pension Cap

Veterans have a rule of their own worth understanding, because it interacts with the Personal Needs Allowance and is easy to read too optimistically. When a veteran with no spouse and no dependent child is covered by Medicaid for nursing-facility care, federal law caps their VA pension at $90 a month. The statute applies the cap for periods after the month of admission, while VA's own regulation applies it after the month Medicaid payments begin, so confirm with VA which month the reduction starts if Medicaid approval came after admission.3 Either way, a veteran isn't made to repay pension VA failed to reduce, unless the veteran concealed information VA needed to make the reduction.3

The important part is what happens to that $90. Federal law says a facility's Medicaid payment can't be reduced by the pension amount the veteran keeps, so the retained $90 isn't offset against the home's bill.3

That's where the federal rule ends. It doesn't say whether a single, childless veteran ends up holding the $90 on top of Illinois's $60 Personal Needs Allowance or in place of it. That question belongs to state rule, and the answer varies by state. Rhode Island, for example, treats the $90 as the veteran's allowance in place of the state's, not on top of it. So don't plan around a combined monthly figure until an Illinois Department of Human Services caseworker confirms how it's handled, and the resident's income notice matches.3

This $90 cap applies to a veteran who has no spouse or child and is on a Medicaid-covered nursing-home stay, and the same rule reaches a surviving spouse with no child and a surviving child receiving pension.3 Where that stay happens narrows it further. The definition of nursing facility the cap depends on, at 38 U.S.C. 5503(d)(1)(B), carves out a state home for which the VA makes per diem payments for nursing home care under 38 U.S.C. 1741(a), so a Medicaid-covered veteran in such a state veterans home does not have the pension cut to $90 by this rule.3 A married veteran, or one supporting a dependent, is handled differently, and anyone in that situation should confirm the details with the VA directly, since pension rules turn on individual circumstances.3

Learn More

Find personalized help understanding what your family member keeps under Illinois Medicaid nursing-home rules 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.