NJ Medicaid Spousal Impoverishment 2026: What a Spouse Keeps

When one spouse needs Medicaid long-term care and the other stays home, New Jersey does not require the couple to go broke first. Under the federal spousal-impoverishment rules, the at-home spouse in 2026 can keep between $32,532 and $162,660 in countable assets and a guaranteed monthly income floor of $2,705.00. This guide explains exactly how those two protections work through New Jersey Medicaid, known as NJ FamilyCare.1

How New Jersey Medicaid Spousal Impoverishment Works

When Medicaid long-term care entered the picture decades ago, married couples faced a cruel problem: to get one spouse covered, they often had to spend down nearly everything, leaving the healthy spouse at home with almost nothing. Congress fixed that in 1988 with the spousal-impoverishment rules, codified at 42 U.S.C. 1396r-5 (Section 1924 of the Social Security Act), and New Jersey applies them in full. When one spouse (the "institutionalized" or applicant spouse) needs Medicaid long-term care, the other (the "community" spouse who stays home) is allowed to keep a protected share of the couple's assets and income.1

New Jersey administers these rules through the Division of Medical Assistance and Health Services (DMAHS), which sets Medicaid policy, while the local County Welfare Agency (County Board of Social Services) performs the financial eligibility review. The two protections are the Community Spouse Resource Allowance (CSRA) on assets and the Monthly Maintenance Needs Allowance (MMNA, sometimes MMMNA) on income.

These protections apply specifically to long-term care through New Jersey's Managed Long-Term Services and Supports (MLTSS) program or institutional (nursing-facility) Medicaid. They do not apply to regular, non-long-term-care NJ FamilyCare.

The New Jersey CSRA: How Much Can the Community Spouse Keep?

The Community Spouse Resource Allowance determines how much of the couple's combined countable assets the at-home spouse may keep.

Calculating the CSRA. The County Welfare Agency takes a snapshot of the couple's total countable assets as of the date the applicant spouse began a continuous period of institutionalization or long-term care. The community spouse keeps half of that amount, subject to a federal floor and ceiling. New Jersey applies the full federal range: the protected share is never less than $32,532 and never more than $162,660 in 2026.1

• Minimum CSRA ($32,532). Even if half the couple's assets falls below this figure, the at-home spouse keeps at least $32,532.1
• Maximum CSRA ($162,660). Even if half the couple's assets exceeds this amount, the protected share is capped here.1

In practice: a couple with $60,000 in countable assets leaves the community spouse $30,000 (half). A couple with $22,000 leaves the community spouse the full $22,000, because the minimum applies. A couple with $400,000 leaves the community spouse $162,660, because the maximum caps the share.1

Countable vs. exempt assets. Not everything the couple owns counts toward the snapshot. Exempt assets include:

• The primary home, as long as the community spouse lives there (subject to the home-equity limit below)
• One vehicle used for household transportation
• Household furnishings and personal belongings
• Certain irrevocable funeral and burial funds

Most financial accounts, second properties, and retirement accounts count toward the snapshot.2

The applicant spouse's share. After the community spouse's CSRA is set aside, the applicant must spend their remaining countable assets down to New Jersey's $2,000 individual resource limit before Medicaid will pay for care.2

Income Protection: The MMNA in New Jersey

The MMNA is the income counterpart to the CSRA. It sets the minimum monthly income the at-home spouse is entitled to keep so the couple's income is not entirely consumed by the cost of the applicant spouse's care.

How the MMNA range works. The federal MMNA floor is $2,705.00 per month (effective July 1, 2026 through June 30, 2027; the floor resets each July). The ceiling is $4,066.50 per month, effective January 1, 2026. New Jersey follows these federal figures directly.1

If the community spouse already has income at or above the floor from their own sources (Social Security, a pension, investments), no income is diverted from the Medicaid recipient, and in a high-income household the applicant may even owe a spousal contribution toward the cost of care. If the community spouse's own income falls short, they receive a monthly allocation from the applicant spouse's income to bring them up to the MMNA.1

The excess-shelter adjustment. A community spouse whose shelter costs are high can qualify for an MMNA above the floor. When the at-home spouse's shelter costs (rent or mortgage principal and interest, property taxes, homeowner's insurance, and a utility allowance) exceed a federal shelter standard, the excess is added to the base allowance, raising the MMNA toward the $4,066.50 ceiling. Because the shelter standard itself is a federal figure that resets periodically, confirm the current amount with your County Welfare Agency before relying on a specific number.1

Requesting a higher allowance. If the standard calculation does not adequately cover the community spouse's living expenses, or if exceptional circumstances create unavoidable costs, New Jersey provides a fair hearing process to raise the allowance. Presenting itemized monthly expenses (rent or mortgage statements, utility bills, property-tax records) is the most effective way to support a higher MMNA. An elder-law attorney can help build that case.

New Jersey's Income Cap and Qualified Income Trust

Unlike states that use a medically needy spend-down, New Jersey imposes an income cap on long-term-care Medicaid: a single applicant must have monthly income at or below $2,982 in 2026 (300% of the federal SSI benefit rate). An applicant whose gross monthly income exceeds that cap can still qualify by establishing and funding a Qualified Income Trust (QIT, also called a Miller Trust) with the excess income, which then is not counted for eligibility.2

In a nursing facility, the resident's income above allowances is applied toward the monthly care bill, and Medicaid pays the remainder. The New Jersey nursing-facility Personal Needs Allowance is $50 per month, which the resident keeps for personal expenses.4

The Home Exemption and Equity Limit

The primary home is exempt while the community spouse lives in it and the equity is below the home-equity limit. New Jersey applies the federal-minimum home-equity limit of $752,000 for 2026. That cap does not apply at all while a community spouse or dependent child lives in the home, so the home is fully protected during the community spouse's lifetime.3 One vehicle, personal belongings, and certain burial funds are also exempt.2

New Jersey Estate Recovery After Death

After the applicant spouse passes away, New Jersey estate recovery may seek reimbursement for the cost of care. Federal law prevents any recovery while the community spouse is alive, and no recovery runs against the community spouse's own estate during their lifetime, because the community spouse was never the Medicaid recipient. New Jersey does, however, use an expanded (not probate-only) estate definition once recovery begins, reaching property that passes outside probate through joint tenancy, survivorship, a life estate, or a living trust.5 For how New Jersey defines the recoverable estate and its exceptions, see our New Jersey Medicaid estate recovery guide.6

The Look-Back Period

New Jersey applies a 60-month (five-year) look-back to uncompensated asset transfers when determining long-term-care eligibility. Gifts or below-market-value transfers within five years of the application date can trigger a penalty period during which Medicaid will not pay for care. Transfers between spouses are exempt, so assets can be retitled into the community spouse's name without penalty, but the snapshot valuation still counts all couple assets regardless of titling.2

How to Apply for New Jersey Long-Term Care Medicaid

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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.