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

In 2026, Oregon's Medicaid personal needs allowance is $81.28 a month, the slice of income a nursing facility resident keeps for personal spending while Medicaid pays for their care.1

That amount sits well above the federal minimum of $30 a month, and it comes with rules about how the money is held, what it can pay for, and what the facility can never charge against it. The Oregon Medicaid personal needs allowance exists so that going on Medicaid doesn't leave a resident with nothing of their own for clothing, a haircut, or a phone bill.2

In This Guide

• What the Oregon Medicaid Personal Needs Allowance Is and Who Gets It
• The Oregon Medicaid Personal Needs Allowance vs the Federal Floor
• How Your Money Is Held: The Resident Trust Fund
• Where the Allowance Fits in Your Patient Liability
• What the Facility Must Provide (and Can't Bill to Your Allowance)
• Veterans and the VA Pension Cap
• Frequently Asked Questions
• Learn More

What the Oregon Medicaid Personal Needs Allowance Is and Who Gets It

When someone moves into a nursing facility and qualifies for Medicaid to pay for it, they don't hand the facility a rent check out of pocket. Instead, most of their monthly income, Social Security, a pension, an annuity, goes to the facility as their share of the cost of care. In Oregon that program is the Oregon Health Plan, the state's Medicaid program, with long-term-care eligibility handled by the Oregon Department of Human Services (ODHS) Aging and People with Disabilities program.

If every dollar of that income flowed to the facility, the resident would have nothing left for the small things that make daily life bearable. Federal and state law prevent that by carving out a protected amount the resident keeps each month. That protected amount is the personal needs allowance, and in Oregon it is $81.28 a month for a nursing facility resident.1

Who gets it: a resident of a Medicaid-paying nursing facility (or an intermediate care facility for individuals with intellectual disabilities) whose care is covered through the Oregon Supplemental Income Program Medical (OSIPM). Oregon's rule sets these amounts for OSIPM but not for the separate OSIPM-EPD program. The allowance is the resident's to spend on clothing and personal items the facility isn't required to provide, and it can't be touched by the facility for the cost of care.1 It's a small figure, and it isn't the only income protected: the patient-liability formula also deducts other allowances, such as one for a spouse at home and health insurance premiums.2

The Oregon Medicaid Personal Needs Allowance vs the Federal Floor

Every state has to allow a personal needs allowance, and federal law sets the minimum. Under 42 U.S.C. 1396a(q), the floor is at least $30 a month for an aged, blind, or disabled individual, and at least $60 a month for an institutionalized couple when both spouses are aged, blind, or disabled and their incomes are considered available to each other. Those numbers are a floor, not a ceiling. They haven't changed since the Omnibus Budget Reconciliation Act of 1987 wrote them into law, effective for calendar quarters starting on or after July 1, 1988, and inflation has quietly eroded them for nearly four decades.2

A state must set its nursing-facility allowance at or above that $30 and is free to set it higher, as Tennessee does at $70. Oregon's $81.28 a month is more than two and a half times the $30 federal minimum, and $11.28 above the $70 Tennessee protects.1,2

Here's the practical takeaway for families: the Oregon Medicaid personal needs allowance isn't a number the facility or a caseworker gets to negotiate. It's set by rule (OAR 461-155-0250), and $81.28 is the 2026 allowance for a nursing facility resident. The same rule has one exception at the bottom of the income scale: for a resident whose countable income, including any SSI, is less than $79.07, the payment standard is the difference between that income and $79.07. If a caseworker's figure doesn't match either number, ask them to point to the rule.1

How Your Money Is Held: The Resident Trust Fund

The personal needs allowance doesn't have to sit in the resident's own checking account. A resident can choose to deposit it with the facility in what's called a resident trust fund, and federal law (42 CFR 483.10(f)(10)) sets strict rules for how the facility has to manage that money. A facility can't require a resident to deposit personal funds with it, but if the resident chooses to and authorizes it in writing, the facility has to act as a fiduciary and account for every dollar. The resident also has the right to know in advance what charges the facility may make against those funds.3

Here's what those rules require. For a Medicaid resident, any balance above $50 has to sit in an interest-bearing account kept separate from the facility's operating money (the threshold is $100 for a resident who isn't on Medicaid). The facility has to keep a full, separate accounting that never mixes the resident's money with its own, give the resident a statement every quarter and on request, and secure the funds with a surety bond or another assurance federal rules accept. When a resident is discharged, evicted, or dies, the facility has 30 days to convey the balance and a final accounting, to the resident or, after a death, to whoever is administering the estate under state law.3

One thing worth watching: money that piles up in the account can cost a resident their coverage. The resource limit for OSIPM, the Oregon Health Plan program that covers nursing facility care, is $2,000 for a one-person need group.1 Federal rules require the facility to notify a Medicaid resident when the account reaches $200 less than the SSI resource limit for one person, and to warn that if the account plus the resident's other nonexempt resources reaches that limit, the resident may lose Medicaid or SSI eligibility. The fix is simple: spend the allowance on the things it's meant for rather than letting it accumulate.3

Where the Allowance Fits in Your Patient Liability

To see why the allowance matters, it helps to understand how Oregon calculates a resident's monthly contribution to their own care, known as the patient liability or share of cost. The state starts with the resident's gross income and then subtracts a set of protected amounts before arriving at what the resident owes the facility. The personal needs allowance is one of those subtractions.

In rough order, the calculation works like this. Start with the resident's total monthly income. Subtract the personal needs allowance of $81.28. If the resident has a spouse still living at home, subtract a monthly maintenance allowance that shifts income to that spouse. Subtract the cost of health insurance premiums the resident pays, such as Medicare Part B and any supplemental or Part D coverage. What's left is the patient liability, paid to the facility each month, and the Oregon Health Plan covers the rest of the bill.1,2

A couple of Oregon-specific details shape this math. Oregon is an income-cap state, with the nursing-facility income standard set at $2,982 a month for 2026; a resident whose income runs higher has to route their income through an Income Cap Trust to qualify. One detail to get right: the trust has to hold all of the resident's income, not just the amount above the cap. The trust then distributes that income each month in a set order that begins with the personal needs allowance. And for a married couple, the at-home spouse's income protection is built on a minimum monthly maintenance needs allowance of $2,705.00 (effective July 1, 2026) and a maximum of $4,066.50 (effective January 1, 2026). Those are the standards for the ordinary calculation, not a hard cap: federal law lets either spouse ask for a fair hearing to show exceptional circumstances causing significant financial duress. On the asset side, the at-home spouse keeps the largest of four amounts: half the couple's countable resources up to $162,660, the $32,532 state standard, a court-ordered amount, or the amount that, if invested, would raise the spouse's income to the maintenance allowance. The last two carry no dollar limit. Our Oregon spousal impoverishment guide walks through how that protection is calculated.1,4

The point to hold onto is that the $81.28 comes off the top, before the facility gets its share. It's not a favor the facility does; it's a protected deduction built into the patient-liability formula. For more on how nursing home costs and coverage fit together, see our Oregon Medicaid and nursing home care guide.1

What the Facility Must Provide (and Can't Bill to Your Allowance)

A common and costly misunderstanding is that the personal needs allowance is meant to cover basic care items. It isn't. Federal law (42 CFR 483.10(f)(11)) folds a long list of routine items and services into the daily rate Medicaid already pays the facility, and during a covered Medicaid stay the facility may not bill the resident, or charge their personal funds, for any of them.5

That covered list includes nursing services, meals and nutrition, an activities program, room and bed maintenance, medically related social services, hospice care the resident elects that Medicare or Medicaid pays for, bathing assistance, basic personal laundry, and routine personal hygiene items and services: soap, comb and brush, a razor and shaving cream, a toothbrush and toothpaste, denture adhesive and cleaner, moisturizing lotion, incontinence care and supplies, towels and washcloths, over-the-counter drugs, and hair and nail care. Because the per-diem rate already pays for these, none of them can be charged to a resident's personal needs allowance.5

So what is the allowance actually for? The extras that make a life feel personal rather than institutional: clothing and shoes, a preferred brand of shampoo or lotion beyond the basics the facility supplies, a salon haircut or manicure, snacks, magazines and books, phone and postage, hobby supplies, a streaming subscription, and small gifts for family. The facility itself can charge the allowance only for non-covered items, such as a phone, a TV or other personal electronics, personal clothing, reading matter, grooming beyond what Medicaid pays for, or a private room that isn't therapeutically required, and only if the resident asks for it, it isn't required by the care plan, the facility says up front there will be a charge, and Medicare or Medicaid isn't paying. If a facility ever tries to bill an item on the covered list against a resident's allowance, that's a violation worth raising with the facility administrator or the Oregon Long-Term Care Ombudsman.5

Veterans: The $90 VA Pension Cap

Veterans on a VA pension face a separate federal rule when they enter a Medicaid-paying nursing facility, and it's easy to confuse with the personal needs allowance. Under 38 U.S.C. 5503(d)(2), a veteran who has neither a spouse nor a child and is covered by Medicaid for nursing-facility services has their VA pension capped at $90 a month for any period after the month of admission; the same cap applies to a surviving spouse with no child and to a child entitled to pension. VA's own regulation (38 CFR 3.551(i)) instead starts the cap after the month Medicaid payments begin, so if Medicaid was approved months after admission, confirm with VA which month the reduction runs from. The law also protects that $90: the facility's Medicaid payment can't be reduced by it, so the $90 stays with the veteran rather than flowing to the facility.6

The cap has a boundary that's easy to miss, because it sits in the statute's definitions rather than in the rule itself. Under 38 U.S.C. 5503(d)(1)(B), the nursing facilities this subsection reaches do not include 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 living in a state veterans home the VA makes those payments for is outside the $90 cap.6 The setting is what decides it, so that is the first thing to pin down.

Oregon's own post-eligibility rule handles VA-pension recipients specifically. Under OAR 461-155-0250, a resident who receives a VA pension based on unreimbursed medical expenses is allowed a personal needs allowance of $90 a month rather than the standard $81.28.1

These are two different rules from two different sources, and it's worth keeping them straight rather than treating them as a single combined figure: the federal statute governs how much VA pension a single, childless veteran keeps, while Oregon's rule sets the personal needs allowance for a VA-pension recipient. A veteran's exact situation, especially if they have a spouse or receive Aid and Attendance, can change how the pension is treated, so it's worth confirming the specifics with a County Veterans Service Officer and a Medicaid caseworker.6,1

Learn More

Find personalized help understanding the Oregon 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.