North Carolina Medicaid Personal Needs Allowance (2026)

North Carolina's Medicaid Personal Needs Allowance is $70 a month in 2026, the personal spending money a nursing home resident keeps after most of their income goes toward the cost of care. If a parent or spouse is entering a Medicaid-funded nursing facility, the North Carolina Medicaid Personal Needs Allowance is the one slice of their monthly income that stays theirs, meant for the small things a facility doesn't provide: a salon visit, new clothes, a phone bill, a birthday gift for a grandchild. It isn't a large sum, and the rules around how it's held and spent are worth understanding before the first month's bill arrives.1

In This Guide

• What Is the North Carolina Medicaid Personal Needs Allowance?
• How the North Carolina Medicaid Personal Needs Allowance Compares to the Federal Floor
• Where the Money Is Held: The Resident Trust Fund
• How the Allowance Fits Into Your Patient Liability
• What the Facility Must Provide and Can't Bill to the PNA
• Veterans and the VA Pension Cap
• Frequently Asked Questions
• Learn More

What Is the North Carolina Medicaid Personal Needs Allowance?

When someone qualifies for Medicaid to pay for a nursing home, they don't pay the facility out of pocket the way a private-pay resident does. Instead, North Carolina Medicaid, run by the North Carolina Department of Health and Human Services (NCDHHS) through your county Department of Social Services (DSS), helps pay the cost of care, and the income the resident has left after a set of allowed deductions goes toward that bill.1 The word for the resident's share is patient liability, and we'll walk through it below.

Federal law doesn't let the state take every last dollar, though. A nursing home resident on Medicaid gets to keep a small, protected amount of their income each month for personal use. That protected amount is the Personal Needs Allowance, or PNA. It exists so that a resident isn't left with nothing of their own, no way to buy a birthday card, replace a worn-out sweater, or pay for a salon visit beyond the basic grooming the facility has to provide.

In North Carolina, the PNA for a person living in a nursing facility is $70 a month. A married couple who both live in the facility and share a room keep $140 a month between them. North Carolina raised this figure from $30 to $70 under Division of Health Benefits (DHB) Change Notice 13-23, effective January 1, 2024, so if you're reading an older guide that still says $30, it's out of date.1

Who gets it? A Medicaid-eligible nursing-facility resident in North Carolina. The PNA isn't something you apply for separately; it's one of the deductions the county caseworker takes when they calculate how much of the resident's income goes to the facility.1

How the North Carolina Medicaid Personal Needs Allowance Compares to the Federal Floor

Every state has to offer at least a minimum PNA, and states are free to be more generous. Here's where North Carolina's figure sits against that federal minimum.

The federal minimum, set under the Medicaid statute and unchanged since 1988, is $30 a month for an institutionalized individual and $60 a month for an institutionalized couple when both spouses are aged, blind, or disabled and their incomes are counted as available to each other. States must meet that floor and may go above it. Tennessee, for example, sets its nursing-facility allowance at $70, the same figure North Carolina uses.2

North Carolina's $70 is well above the federal minimum, more than twice the $30 individual floor.1,2 Here's how the two line up:

One thing worth keeping straight: the federal $30 figure is a floor, not the amount North Carolina uses. Because the federal minimum has never been raised for inflation in nearly four decades, a state that never acted above it would leave residents with $30 that buys far less than it did in 1988. North Carolina's decision to set $70 keeps a bit more purchasing power in residents' hands.2

Where the Money Is Held: The Resident Trust Fund

Once the state protects that $70, the next question is a practical one: where does it actually go? The resident can keep and manage it, or can choose to deposit it in a resident trust fund, sometimes called a patient trust account, that the nursing facility manages on the resident's behalf.3

Federal nursing-home rules give the resident the right to manage their own money, including the right to know in advance what the facility may charge against it, and a facility can never require a resident to hand their funds over. But if the resident chooses to deposit money with the facility and authorizes it in writing, the facility has to act as a fiduciary and follow strict rules. For a Medicaid resident, any balance above $50 has to go into an interest-bearing account kept separate from the facility's own operating money. The facility must keep a full, separate accounting that never mixes a resident's money with the facility's funds or with anyone else's except other residents', and it must give the resident a statement of the account every quarter and any time they ask.3

Two more protections are worth knowing. The facility has to secure all resident funds with a surety bond or other approved assurance. And when a resident is discharged, evicted, or dies, the facility must turn over the balance and a final accounting within 30 days: to the resident, or after a death to the person or probate court handling the estate.3

A word of practical advice: ask for the quarterly statement rather than waiting for it to arrive, and reconcile it against what you know was actually spent. The trust account also counts toward the resident's resources. North Carolina's reserve limit for a single applicant is $2,000.1 Federal rules also require the facility to warn a Medicaid resident when the account reaches $200 less than the SSI resource limit for one person, because if the balance plus their other countable resources reaches that limit, they can lose Medicaid or SSI eligibility.3 Spending the allowance down on real needs, month to month, is usually the simplest way to avoid that.

How the Allowance Fits Into Your Patient Liability

Patient liability is the amount of a resident's own income that goes to the nursing facility each month. The PNA is one of several deductions that come out before that number is set, which is exactly why it matters: every dollar protected as a personal allowance is a dollar that doesn't go to the facility.

Here's how the deductions line up for a nursing-facility resident, in the order federal rules list them:2

1. Start with the resident's gross monthly income: Social Security, any pension, and other income combined.
2. Subtract the Personal Needs Allowance of $70.1
3. If there's a spouse still living in the community, subtract a community spouse monthly income allowance. Under the federal spousal-impoverishment rules North Carolina follows, that allowance can bring the community spouse up to a monthly floor of $2,705.00 as of July 1, 2026 (the figure is adjusted every July), which can sharply reduce what the institutionalized spouse owes the facility.5,1
4. Subtract an allowance for dependents, if any, whether or not there's a community spouse. A resident with no spouse at home who is expected to return home within 6 months from the date their continuous period of institutionalization began can also keep a $242 monthly maintenance allowance.1
5. Subtract health-insurance premiums the resident still pays. Federal rules count Medicare and other health-insurance premiums among the medical costs deducted here.2 North Carolina converts private health-insurance premiums to a monthly amount and deducts them as an Unmet Medical Needs allowance. A premium the state's Health Insurance Premium Program already pays doesn't count.1
6. What remains is the patient liability, paid to the facility every month. Medicaid pays the rest of the bill.

The $70 sits at the top of that list, protected before the facility sees a dime of the resident's income.1 It's a small number against a monthly nursing-home bill, but it's the resident's to keep. For a fuller walkthrough of how nursing-home coverage and the resident's monthly share of the bill work in the state, see our guide to North Carolina Medicaid and nursing home care.

What the Facility Must Provide and Can't Bill to the PNA

You might assume the $70 has to stretch to cover basics like soap, laundry, and toothpaste.1 It doesn't. Federal rules require the nursing facility to provide a long list of routine items and services as part of the daily rate Medicaid already pays, and the facility may not turn around and bill the resident, or the resident's PNA, for any of them during a covered stay.

Items and services the facility must provide, and can't charge to your personal funds, include:

• Nursing services and bathing assistance
• Meals and nutrition services, and an activities program
• Room and bed maintenance
• Routine personal hygiene items and services: comb and brush, bath soap, razor and shaving cream, toothbrush, toothpaste, denture adhesive and cleaner, moisturizing lotion, towels and washcloths, hair and nail hygiene services
• Incontinence care and supplies
• Over-the-counter drugs
• Basic personal laundry
• Medically related social services
• Hospice care the resident has elected, when Medicare or Medicaid pays for it

The rule reaches further than this list. A facility can't charge a resident's personal funds for any item or service Medicaid or Medicare pays for, apart from applicable deductible and coinsurance amounts, so none of these can come out of the Personal Needs Allowance.6

So what is the $70 actually for?1 The genuinely personal, optional things the facility doesn't have to supply: clothing you choose, a preferred brand of shampoo, a phone or a streaming subscription, snacks, magazines, a salon visit beyond basic grooming, a small gift for a grandchild, transportation for a family outing. A facility can charge the resident's funds for some extras, such as a phone, a TV or personal computer, personal clothing, reading material, flowers, gifts bought on the resident's behalf, privately hired aides, or a private room that isn't medically needed. But it can do so only when the resident asked for the item, it isn't needed to meet the care plan, the facility said up front there would be a charge, and Medicare or Medicaid isn't paying for it.6 If you see a charge against the trust account for something on the list above, question it, because that's a bill the resident shouldn't be paying.

Veterans and the VA Pension Cap

Veterans on a needs-based VA pension face a special rule when they move into a Medicaid-funded nursing facility, and the details are worth getting right.

Under federal law, a veteran who has neither a spouse nor a child, and who is covered by Medicaid for nursing-facility care, has their VA pension reduced to no more than $90 a month for any period after the month of admission to the nursing facility. The same limit applies to a surviving spouse with no child and to a surviving child receiving pension.4 That sounds like a loss, but the important part is what happens to that $90: the law protects it. The payment the nursing facility receives from Medicaid can't be reduced by the retained pension, so the $90 stays with the veteran rather than flowing to the facility.4

VA's own regulation states the same $90 limit but starts it after the month Medicaid payments begin, which can be a later month when Medicaid is approved well after admission. Neither text says which month VA uses in that case, so confirm the effective date of the reduction with VA rather than budgeting around either one. If VA is slow to reduce the pension, the veteran doesn't have to repay the extra unless they willfully concealed information VA needed to make the reduction.4

The cap also turns on where the veteran lives, not only on who is in the family. Federal law defines the nursing facilities this rule covers to exclude a state veterans home for which the VA makes per diem payments for nursing home care, so a Medicaid-covered veteran living in one of those homes isn't held to the $90 limit.4 Worth pinning down which kind of facility the admission is to before anyone assumes the pension is about to drop.

What that federal rule does not decide is whether the $90 is then held on top of the state's Personal Needs Allowance or in place of it. The statute never mentions a personal needs allowance. That interaction is set by state Medicaid policy, and states answer it in opposite directions: some substitute the capped pension for the state allowance, others leave the resident with both. North Carolina's treatment isn't something to assume in either direction, so don't plan on the $90 and the $70 PNA together until the Medicaid caseworker confirms how the pension is being counted.4,1 The cap itself also works differently for a veteran who has a spouse or child, so a married veteran should ask their county Veterans Service Officer and their Medicaid caseworker how their specific situation is handled.

Learn More

Find personalized help understanding the North Carolina Medicaid Personal Needs Allowance 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.