South Dakota Medicaid Income Limits 2026: Eligibility

For long-term care, the South Dakota Medicaid income limit is a hard cap: $2,982 a month in 2026. State rule ARSD 67:46:04:14 makes an applicant in a nursing facility or on a waiver ineligible once monthly income passes that ceiling, and the route the rules provide for income above it is a Medicaid income trust, South Dakota's own name for what is elsewhere called a Miller Trust.1

This guide covers the 2026 income and asset rules for South Dakota Medicaid long-term care: the income cap and how a Miller Trust clears it, the $2,000 asset limit, what a nursing-home resident keeps, and what the at-home spouse is protected from. It also separates the long-term-care rules a senior faces from the income-based Supplemental Security Income (SSI) test and the expansion path for working-age adults. South Dakota Medicaid is run by the state's social-services agency (DSS).

In This Guide

• South Dakota Medicaid in 2026: the numbers that matter
• Which income test applies: ABD long-term care vs. MAGI expansion
• The South Dakota Medicaid income limit for long-term care
• How the Miller Trust clears the cap
• What a nursing-home resident keeps
• Protecting the spouse who stays home
• After death: estate recovery
• How to apply when you are over the South Dakota Medicaid income limit
• Frequently Asked Questions
• Learn More

Which income test applies: ABD long-term care vs. MAGI expansion

South Dakota's Medicaid program has several coverage groups, and DSS says each has its own eligibility rules, but two income tests matter most for this question, and which one applies depends on who is asking.1

• The long-term-care (ABD) test. A senior who is aged, blind, or disabled and needs nursing-facility or waiver care is judged under the Supplemental Security Income (SSI) related rules: the $2,982/month income cap and a hard $2,000 asset test for a single applicant. This is the test the rest of this guide explains.1,2
• The expansion (MAGI) test. South Dakota implemented Medicaid expansion on July 1, 2023, under voter-approved Constitutional Amendment D. Adults aged 19 to 64 with household income at or below 138% of the Federal Poverty Level, which HHS's 2026 table puts at $22,024.80 a year ($1,835.40 a month) for one person, are covered if they are not eligible for or enrolled in another Medicaid category, and there is no asset test.5,6

The distinction matters because, of these two tests, only the long-term-care one has an asset test. A working-age adult in the expansion group is measured on income alone, while a senior applying for nursing-home coverage must clear both the income cap and the $2,000 asset limit.1

The South Dakota Medicaid income limit for long-term care

For long-term-care Medicaid, South Dakota sets the income limit at $2,982 per month, equal to 300% of the 2026 SSI Federal Benefit Rate of $994.1,2 That figure applies to nursing-facility coverage and to the home-and-community-based services (HCBS) waivers that pay for care outside a facility.

The rule is written as a flat bar rather than a target you whittle down. ARSD 67:46:04:14 makes an individual who is in a medical or nursing facility, or who is participating in a home- and community-based waiver program, ineligible for assistance under those rules when monthly income exceeds 300 percent of the maximum SSI standard benefit amount. So monthly income even one dollar above the $2,982 cap puts you over the line.1

That sounds like a trap. What the rules provide instead is a trust.

How the Miller Trust clears the cap

South Dakota's rules call it a Medicaid income trust (ARSD 67:46:05:33.01). Elsewhere the same device goes by Qualified Income Trust or Miller Trust. Each month the income above the cap is paid into the trust, and the trustee pays the beneficiary an amount that, added to income never routed through the trust, may not exceed 300 percent of the SSI standard benefit amount, which is the $2,982 line. That is how an over-income applicant is brought within the limit.1

The trust is not a loophole or a way to shelter money for heirs. The rule sets out exactly what it must do:

• It may hold only the beneficiary's own money (pension, Social Security, or other income), and it must be established for the beneficiary's sole benefit.
• The trustee must pay the beneficiary's monthly amount without option or discretion, and must pay the income left in the trust each month to the nursing facility, HCBS, or waiver provider. The trustee may draw on that remaining income only for the direct cost of running the trust and for health items that neither Medicaid nor the facility covers.
• On the beneficiary's death, DSS receives all amounts left in the trust, up to the total medical assistance paid on the beneficiary's behalf after September 30, 1993.

Those requirements are exact and the trust must be a nontestamentary trust or similar legal device established after August 10, 1993, which is why this is elder-law-attorney territory, not a do-it-yourself form.1

The practical takeaway: being over the income cap in South Dakota does not mean you are disqualified. It means the excess has to run through a trust that meets those requirements. A single dollar of excess income is a paperwork problem, not a dead end.

What a nursing-home resident keeps

When South Dakota Medicaid pays for nursing-facility care, the resident contributes most of their monthly income toward the cost of care. What stays with them for personal use is the Personal Needs Allowance (PNA), money set aside for the resident's own small expenses like clothing, a haircut, or a phone. South Dakota sets its PNA at $100/month, plus up to the first $75 of gross earned income for a resident who works.1,3

That $100 is worth noticing. The federal floor has sat at $30/month since 1988, so South Dakota's $100 leaves a resident more breathing room than the federal minimum requires.1,3 (For the national picture on how the allowance works and where it gets deducted, see our explainer on the Medicaid personal needs allowance.)

The five-year look-back

South Dakota reviews asset transfers made in the 60 months before the first date on which the applicant is both institutionalized and applying for long-term-care assistance (ARSD 67:46:05:06.01).1,7 Giving away money or property for less than fair market value during that window, such as signing a house over to a child or gifting a grandchild a down payment, can trigger a penalty period during which Medicaid will not pay for long-term-care services, even when you otherwise qualify. South Dakota presumes such a transfer was made to qualify for Medicaid unless you show by clear and convincing evidence that it was made for another reason or that you meant to receive fair value.1 The penalty is calculated by dividing the total uncompensated value transferred by the state's average monthly private-pay cost of nursing-facility care.7

Narrow exceptions exist. One is the federal caregiver child rule: transferring the home to a son or daughter who lived in it for at least the two years immediately before you were institutionalized, and who, as determined by the State, provided care that permitted you to reside at home rather than in a facility, does not trigger a transfer penalty.8 That "as determined by the State" clause is part of the statute, so the exception turns on a state finding rather than applying automatically.8 South Dakota can also waive the resulting period of ineligibility, but ARSD 67:46:05:10 requires three things together: clear and convincing evidence that you have no other means of support and that denial would deprive you of food, clothing, shelter, other necessities, or medical care whose absence would endanger your health or life; a demand for the asset's return, or receipt of its fair market value; and, if neither comes back, an attorney's civil action to recover it, or a police report where the transfer was theft or exploitation.1

Anything done inside the five-year window deserves an elder-law attorney's review first. If long-term care is on the horizon for someone in your family, talk to a professional before moving assets. For the broader toolkit, see our guide to Medicaid planning strategies.

Protecting the spouse who stays home

When one spouse needs long-term care and the other stays in the community, federal spousal-impoverishment rules keep the at-home spouse from being left with nothing. South Dakota's rules set these protections by reference to the federal standards (ARSD 67:46:07:02, 67:46:07:06, and 67:46:07:12), and these are the 2026 figures.1,4 They apply when the spouse needing care has applied for nursing-facility or waiver coverage, has entered a hospital, nursing facility, or intermediate care facility or begun waiver services, and is expected to stay there or keep receiving those services for at least 30 consecutive days; a spouse entering assisted living without waiver services, or adult foster care, is assessed under the ordinary resource rules instead.1

So a married couple stands in a very different position from a single applicant. Under the standard calculation the community spouse keeps half the couple's countable assets, never less than $32,532 and up to $162,660 unless a fair hearing or court order sets a higher amount, and an income allowance that starts at $2,705 a month and cannot be pushed past $4,066.50 without a court order or a fair-hearing finding of duress.4,1 The $2,000 asset limit applies to the spouse who needs care, not to the couple's whole net worth.1

The home is excluded up to $752,000 in equity while it remains the applicant's principal residence. Above that figure the applicant is ineligible for long-term-care medical assistance, not merely counted over the resource limit, but there are ways around it.1,7 South Dakota's rule, read literally, lifts the equity limit only when the spouse or a child under 21 is blind or permanently and totally disabled and lives in the home. The federal statute it cross-references is broader: the limit does not apply when the applicant's spouse, a child under 21, or a blind or permanently and totally disabled child of any age is lawfully living there, so a healthy spouse at home protects the house too, and a family in that position should raise 42 U.S.C. 1396p(f)(2) with DSS.1,7 Equity over the limit can also be brought down with a reverse mortgage or home equity loan, and federal law requires a process to waive the limit for demonstrated hardship.1,7

After death: estate recovery

Like every state, South Dakota runs a Medicaid estate-recovery program. Under SDCL 28-6-23, what the state paid on behalf of a person 55 or older for nursing-facility, home- and community-based, intermediate-care-facility, hospital, and prescription-drug services is a debt due DSS, collected from that person's estate after death.9,1,8

The age rule cuts differently than most families expect. The same statute separately makes any medical assistance paid for someone who is an inpatient in a nursing facility, intermediate care facility, or other medical institution a debt due DSS, with no age condition. DSS states there is no age restriction on which estates it may reach: it may recover from the estate of any recipient who received benefits after July 1, 1994. What the 55-or-older line does is limit which service categories the claim covers, not whose estate is exposed.1,9

DSS may not seek recovery while the recipient's spouse is still living, or while a surviving child is under 21 or is blind or disabled. Those bars are not absolute: DSS states that if it finds the recipient owned or transferred property that would have made them ineligible, it will seek the full amount paid and the bars do not apply.9 Otherwise, read them as a pause, not a cancellation: DSS states that once those conditions no longer apply, it will pursue estate recovery.1 The surviving-spouse protection is not a permanent waiver: SDCL 28-6-23 lets DSS file a claim against the surviving spouse's own estate to satisfy the debt, and a surviving spouse may petition DSS on its form, within six months of the recipient's death, to limit that liability to the value of the surviving spouse's estate as of the recipient's date of death.9 Federal law also requires every state to have a procedure to waive recovery in cases of undue hardship.8 South Dakota's statute directs DSS to set hardship limitations on recovery, so a family facing a claim should ask DSS about them.9 For how recovery works and where families have room to plan, see our Medicaid estate recovery explainer and our guide to South Dakota estate recovery.

How to apply when you are over the South Dakota Medicaid income limit

South Dakota Medicaid is administered by the state DSS. For the long-term-care groups, DSS requires that your medical needs call for the level of care a nursing home provides, on top of the income and asset tests.1

Where to get help

Learn More

Find personalized help working through South Dakota Medicaid eligibility and the Miller Trust question for your family 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.