New Jersey 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 spousal impoverishment rules, in 2026 the at-home spouse keeps half of the couple's countable assets, never less than $32,532, and in the ordinary calculation no more than $162,660.1 On income, federal law sets a monthly maintenance floor of $2,705.00 that every state's allowance must meet or exceed. This guide explains how those two protections work through New Jersey Medicaid, known as NJ FamilyCare.2

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 with the spousal-impoverishment rules at 42 U.S.C. 1396r-5, and New Jersey carries the asset side into its own regulation, N.J.A.C. 10:71-4.8.1 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.2

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.3 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 come into play when one spouse applies for long-term care through New Jersey's Managed Long-Term Services and Supports (MLTSS) program or institutional (nursing-facility) Medicaid. New Jersey's MLTSS guidance puts it plainly: if you are married and your spouse is not applying, some of your marital assets are set aside for your spouse and do not count toward your own limit.1

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 looks at both spouses' countable resources combined. Under New Jersey's regulation, N.J.A.C. 10:71-4.8, as amended for 2026, the community spouse's share is the greater of $32,532 or one half of those combined resources, and it may not exceed $162,660 unless one of two exceptions written into the same rule applies.1

• The $32,532 floor. If half the couple's assets comes to less than this, the at-home spouse's share is still $32,532.1
• The $162,660 ceiling. In the ordinary calculation, the share stops here however large the couple's assets are. It is not absolute: federal law also lets a protected amount set at a fair hearing, or transferred under a court order, go above $162,660. A hearing first counts the applicant spouse's available income as going to the at-home spouse (the "income first" rule), which limits when it yields more.2

In practice: a couple with $60,000 in countable assets leaves the community spouse $32,532, because half ($30,000) is below the floor. A couple with $22,000 leaves the community spouse the full $22,000, because the floor is more than they have. A couple with $400,000 leaves the community spouse $162,660 in the ordinary calculation, because the ceiling caps the share.1

Countable vs. excluded assets. Not everything the couple owns counts. New Jersey's MLTSS guidance says the house you live in and the vehicle you use do not count toward the total. That guidance is written for a home someone lives in; if the applicant has moved permanently to a nursing home, ask the County Welfare Agency how the home will be treated rather than assuming it is excluded.1

The applicant spouse's share. After the community spouse's CSRA is set aside, the applicant must bring their remaining countable assets down to New Jersey's $2,000 individual resource limit before Medicaid will pay for care. Timing matters: New Jersey counts resources as of the first day of the month, so more than $2,000 on the first disqualifies the applicant for that whole month even if the balance drops the next day. A denial for excess resources is not final, though; you can reapply at any time.1

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 federal figures work. The federal minimum is $2,705.00 per month, effective July 1, 2026 through June 30, 2027. That is a floor every state's allowance must meet or exceed, not a cap on what the at-home spouse can be allowed. The standard maximum is $4,066.50 per month, effective January 1, 2026. Both are federal figures from the CMS 2026 chart; New Jersey's own publications that we rely on here do not restate them, so ask your County Welfare Agency to confirm the allowance it will apply in your case.2,1

If the community spouse's own income (Social Security, a pension, investments) already meets the allowance, nothing is owed to them from the applicant spouse's income, because the allowance is only the amount by which the MMNA exceeds the income the at-home spouse already has. If their own income falls short, they can receive a monthly allocation from the applicant spouse's income to make up the gap, to the extent the applicant's income is actually made available to them.1

The excess-shelter adjustment. A community spouse with high housing costs can be allowed more than $2,705.00 without any hearing. Federal law builds the allowance from a poverty-based amount plus an excess shelter allowance, and the housing standard used for that adjustment is $811.50 a month from July 1, 2026. Housing costs above that standard raise the allowance, up to the $4,066.50 standard maximum.2

Requesting a higher allowance. Federal law gives either spouse a fair hearing: if the at-home spouse needs more income than the allowance provides because of exceptional circumstances resulting in significant financial duress, the hearing can substitute a higher amount. That is a showing you have to make, not an automatic increase, and New Jersey's published guidance does not spell out how it applies this route, so expect to document the expenses behind the request. An elder-law attorney can help build that case.2

New Jersey's Income Cap and Qualified Income Trust

New Jersey uses an income limit for long-term-care Medicaid: a single applicant's monthly income limit is $2,982 in 2026 (300% of the $994 SSI federal benefit rate). New Jersey's published income table applies that figure to someone in a Title XIX approved facility for a full calendar month, and separately to someone receiving home and community-based services in their own home. An applicant whose income exceeds the limit can still qualify by establishing and funding a Qualified Income Trust (QIT, also called a Miller Trust) with the excess income.1

In a nursing facility, the resident keeps a Personal Needs Allowance of $50 per month for personal expenses, and the rest of their income is applied to the cost of care as patient liability (the cost share), which the facility bills and collects.4

The Home Exemption and Equity Limit

New Jersey's MLTSS guidance excludes the house you live in from the $2,000 resource count, but long-term care also carries a home-equity cap. New Jersey elected the highest cap federal law allows; on CMS's 2026 chart that maximum is $1,130,000. That 2026 figure is our derivation from New Jersey's election and the federal chart, since no New Jersey publication we hold states it.1 The equity cap does not apply at all while the applicant's spouse, a child under 21, or a blind or permanently and totally disabled child lawfully lives in the home, so it does not limit a couple while the community spouse lives there. An applicant over the cap can also use a reverse mortgage or home equity loan to bring equity below it.5 The vehicle you use is excluded as well.1

New Jersey Estate Recovery After Death

After the applicant spouse dies, New Jersey's Division of Medical Assistance and Health Services may claim against the estate for all Medicaid payments for services received at age 55 or older, not only long-term care. It cannot recover while a surviving spouse is alive, or while there is a surviving child under 21 or a blind or permanently and totally disabled child. That is a postponement, not a cancellation: once the exception ends, the Division has a right to recover from any remaining estate assets.6 New Jersey also uses an expanded (not probate-only) estate definition, reaching property that passes outside probate through joint tenancy, survivorship, or a living trust. A life estate the beneficiary kept that simply ends at death is not part of the recoverable estate.7 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 five-year look-back on all resources, done according to federal regulations: a caseworker reviews resources and income going back five years from the date of your first application for MLTSS. The documentation window can run longer than five years, because records are required from five years before that first application up to the date of the current one.1 Under federal law, a transfer for less than fair market value made on or after the look-back date can bring a penalty period of ineligibility, whose length is the uncompensated value divided by the average monthly private-pay cost of nursing-facility care.8 Transfers to your spouse are exempt from that penalty, so assets can be moved into the community spouse's name without one, but the CSRA calculation still counts both spouses' resources combined.9,1

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.