South Dakota Medicaid Personal Needs Allowance (2026)

South Dakota's Medicaid Personal Needs Allowance is $100 a month. It's the slice of income a nursing-facility resident keeps for personal spending instead of turning their whole check over to the facility, and it's the money set aside to cover their personal needs.1

In This Guide

• What the Personal Needs Allowance Is
• South Dakota's Allowance vs. the Federal Floor
• The Resident Trust Fund
• Patient Liability and Where the Allowance Fits
• What the Facility Must Provide for Free
• Veterans and the VA Pension Cap
• Frequently Asked Questions
• Learn More

What the South Dakota Medicaid Personal Needs Allowance Is

When Medicaid pays for someone to live in a nursing facility, it doesn't hand the resident a monthly benefit to cover room and board. Instead, the resident is expected to put almost all of their own income, Social Security, a pension, and so on, toward the cost of their care, and Medicaid pays the rest of the bill directly to the facility. That contribution from the resident's own pocket is called the patient liability, or share of cost.

The Personal Needs Allowance is the exception to that "almost all." Federal law requires every state to let an institutionalized resident keep a small, protected amount of income each month for personal expenses the facility doesn't cover, things like clothing, a haircut, snacks, a phone bill, stamps, or a magazine. Without it, a resident's entire check would flow to the nursing home, leaving nothing for the small choices that make daily life feel like their own.

In South Dakota, that protected amount is $100 a month for a resident of a nursing or intermediate care facility, set in the state's own Administrative Rule 67:46:06:05, which reads that such a resident is allowed "a deduction of one hundred dollars per month to cover personal needs."1 The allowance is deducted from the resident's gross income before the patient liability is figured, so it comes off the top rather than being paid back to the resident afterward.

Who gets it? Anyone receiving Medicaid-funded long-term care in a South Dakota nursing or intermediate care facility. South Dakota is an income-cap state, which means an applicant qualifies for that coverage only if gross monthly income falls at or below 300 percent of the Supplemental Security Income (SSI) benefit rate, equal to $2,982 a month in 2026, according to the South Dakota Department of Social Services.1 For income above that cap, South Dakota's rules provide a "Medicaid income trust" (the state's name for what is elsewhere called a qualified income trust or Miller trust), and the $100 allowance works the same way once someone is covered.1

There's one more piece worth knowing. A resident who earns money from a job, uncommon but not unheard of, keeps an additional deduction of up to the first $75 of gross earned income each month, on top of the $100 allowance.1

South Dakota's Medicaid Personal Needs Allowance vs. the Federal Floor

The federal government sets a floor, not the actual number. Under 42 U.S.C. 1396a(q) and 42 CFR 435.725, the minimum Personal Needs Allowance a state may set is $30 a month for a single institutionalized person, 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 in determining eligibility. Those figures have not changed since the Omnibus Budget Reconciliation Act of 1987 added the floor to federal law, effective for calendar quarters beginning on or after July 1, 1988, so they have never been raised for inflation.2

States are free to set their allowance at or above that floor. South Dakota's $100 is more than three times the $30 federal minimum.1,2 For a resident, that difference is real money: it's the gap between $360 a year for personal needs at the federal floor and $1,200 a year under South Dakota's rule.

It helps to see why the number matters. Once the allowance and any other deductions that apply come out, the rest of a resident's income goes toward the cost of care, so the allowance is the part of their own income set aside for personal needs. South Dakota setting it at $100 rather than the bare federal $30 is a meaningful, if modest, cushion.1,2

The Resident Trust Fund: How the Money Is Held

Once the $100 is protected, where does it actually live? A resident can choose to deposit personal funds with the nursing facility, and federal rules at 42 CFR 483.10(f)(10) lay out exactly how the facility has to handle that money, starting with the resident's right to know in advance what charges the facility may take from those funds.4

A facility can't require a resident to deposit personal funds with it, that has to be the resident's choice. But once a resident chooses to deposit funds and gives the facility written authorization, the facility must act as a fiduciary and follow specific safeguards:4

• For a Medicaid resident, any balance over $50 has to sit in an interest-bearing account, separate from the facility's own operating accounts.4
• The facility has to keep a full, separate accounting of each resident's funds, with no commingling of resident money and facility money.4
• The facility has to make each resident's financial record available through quarterly statements and whenever the resident asks, so the resident (or the family member handling their affairs) can check every deposit and withdrawal.4

This is the account, often called the resident trust fund or personal-needs account, where the monthly $100 accumulates if it isn't spent. That matters for eligibility, because South Dakota caps a single long-term-care recipient at $2,000 in countable resources, and countable resources include liquid holdings such as checking and savings accounts.1 Federal rules give some warning: the facility must notify a Medicaid resident when the account reaches $200 less than the SSI resource limit for one person, and tell them that if that amount plus their other nonexempt resources reaches the limit, they may lose Medicaid or SSI eligibility.4 If the allowance piles up untouched month after month, the balance can grow toward that limit, so ask the facility or your eligibility worker how your trust-fund balance is counted, and, as a practical matter, spend the allowance on what it's meant for rather than letting it bank indefinitely.

Patient Liability and Where Your $100 Fits

The clearest way to understand the allowance is to walk through the monthly calculation it lives inside. For a nursing-facility resident on Medicaid, the state figures patient liability roughly like this: start with gross monthly income, subtract the protected deductions, and whatever remains is what the resident pays the facility each month.

The $100 Personal Needs Allowance is the first of those deductions.1 The same state rule adds two more in the same place, when they apply: the earned-income deduction of up to the first $75 of gross earned income a month, and, for a resident paying court-ordered child or spousal support, a deduction up to the amount actually paid.1 Separately, a married resident whose spouse still lives in the community can have income shifted to that spouse through a monthly maintenance allowance set under South Dakota's spousal-impoverishment rules.1 Federal Medicaid rules also call for a deduction for medical or remedial care costs that no third party pays, including health-insurance premiums, deductibles, and coinsurance, so ask your DSS eligibility worker exactly which deductions go into your calculation.2 Whatever income is left after every deduction that applies is the patient liability, paid to the nursing home.

The takeaway is that the allowance isn't a payment the resident receives; it's income the resident gets to hold back before the rest is committed to care. Everything above the $100 (and the other deductions) goes to the facility.1

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

Because the allowance is small, it matters a great deal that the facility isn't quietly billing it for things Medicaid already pays for. Federal rules at 42 CFR 483.10(f)(11) settle this: seven categories of items and services are already built into the facility's Medicaid per-diem rate, and during a covered stay the facility must not charge the resident for them.5

Those seven are nursing services, food and nutrition services, the activities program, room and bed maintenance, routine personal hygiene items and services, medically related social services, and hospice care the resident has elected under Medicare or Medicaid. The hygiene category alone covers things like a comb and brush, bath soap, a razor and shaving cream, a toothbrush and toothpaste, denture adhesive and cleaner, deodorant, moisturizing lotion, incontinence care and supplies, towels and washcloths, over-the-counter drugs, hair and nail hygiene services, bathing assistance, and basic personal laundry.5

The $100 allowance is for extras beyond that baseline, and the federal list of what a facility may charge to a resident's funds includes a telephone, a TV, radio, or computer for personal use, personal clothing, reading matter, gifts bought for the resident, flowers and plants, cosmetic and grooming items beyond what Medicaid covers, social events outside the activities program, privately hired nurses or aides, and a private room that isn't therapeutically required. Even then, the facility can charge only if the resident asked for the item, it isn't needed to meet the care plan's goals, the facility said up front there would be a charge, and Medicare or Medicaid isn't paying for it.5

If a facility does try to charge the resident's personal funds for something on the covered list, that's worth questioning. Ask for an itemized accounting of what came out of the trust-fund account, and compare it against the routine services the per-diem rate already covers.

Veterans and the VA Pension $90 Cap

A veteran receiving a needs-based VA pension hits a special rule when they move into a Medicaid-covered nursing facility. It's worth walking through carefully, because it settles less about the Personal Needs Allowance than it might first appear.

Under 38 U.S.C. 5503(d)(2), when a veteran who has neither a spouse nor a child is covered by Medicaid for nursing-facility services, the VA reduces the pension to no more than $90 a month for any period after the month of admission.3 That sounds like a cut, and it is. The next paragraph of the same statute, 38 U.S.C. 5503(d)(3), adds an anti-offset rule: the payment a nursing facility receives under a Medicaid plan may not be reduced by any amount of pension the veteran is permitted to keep.3 That provision governs what Medicaid pays the home, so the state cannot claw the $90 back out of the facility's reimbursement.

VA's own regulation, 38 CFR 3.551(i), sets the same $90 limit but starts it after the month Medicaid payments begin, and when Medicaid approval comes months after admission those are different months, so confirm with the VA the date your reduction takes effect. Either way, 38 U.S.C. 5503(d)(4) says a veteran isn't liable to repay pension paid above the cap because the VA failed to reduce it, unless the veteran willfully concealed the information needed to make the reduction.3

Read the paragraph that comes before (d)(2) and (d)(3), though, because it decides who the cap can touch. 38 U.S.C. 5503(d)(1)(B) defines nursing facility, for this subsection only, as a facility described in section 1919 of the Social Security Act other than a state home for which the VA makes per diem payments for nursing home care under 38 U.S.C. 1741(a).3 A Medicaid-covered veteran living in a state veterans home the VA makes those per diem payments for is therefore outside the $90 cap.3 The per diem is the test, not the label on the building, so confirm with the VA that it pays one for the home before relying on the exclusion.

Here is what that federal rule does not decide. Section 5503 does not address a state's personal needs allowance at all; it caps the pension and protects the facility's payment rate, and stops there.3 Whether a veteran's retained $90 sits on top of South Dakota's $100 allowance or takes the place of some or all of it is settled by state post-eligibility rule, in the calculation that produces the patient liability, and the answer varies by state.1,3

So don't assume either answer for South Dakota. Before counting on a number, ask the South Dakota Department of Social Services or your DSS eligibility worker how a capped VA pension is treated in the patient-liability calculation. A County Veterans Service Officer can help with the VA side of the same question.6

The same $90 cap reaches a surviving spouse with no child and a child entitled to VA pension, applied the way it applies to a veteran with neither spouse nor child. The math changes for a married veteran or one with a dependent child, where the cap as written does not apply.3 Those situations turn on family circumstances and the type of VA benefit, so a veteran in that position should talk through the details with a County Veterans Service Officer and a Medicaid eligibility worker before assuming a number.

Learn More

Find personalized help understanding South Dakota Medicaid nursing-home rules 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.