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 for most residents it's the entire budget for anything the home doesn't hand out.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 Someone whose income runs above that cap can still qualify by routing the excess through a Qualified Income Trust, but the $100 allowance works the same way once they're covered.

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 a couple when both spouses are aged, blind, or disabled and living in the facility. Those figures have not changed since the Omnibus Budget Reconciliation Act of 1987 made them effective in July 1988, and Congress has never indexed them to inflation.2

States are free to set their allowance at or above that floor, and most set it higher. 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 so much. A nursing-home resident on Medicaid has almost no other source of discretionary money, because the whole point of the patient-liability system is that the rest of their income is already committed to their care. The allowance is, for most residents, the entire budget for anything the facility doesn't hand out. 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? Many residents let the nursing facility hold and manage their personal funds, and federal rules at 42 CFR 483.10(f)(10) lay out exactly how the facility has to handle that money.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 does ask the facility to hold the money, the facility becomes a fiduciary and has to 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, and the interest belongs to the resident.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 resident (or the family member handling their affairs) is entitled to see that accounting, so a periodic statement showing every deposit and withdrawal is something you can and should ask for.

This is the account, often called the resident trust fund or personal-needs account, where the monthly $100 accumulates if it isn't spent. The balance in this account counts as a resource, so an unspent allowance can add up against the resource limit: South Dakota caps a single nursing-home resident at $2,000 in countable resources.1 If the allowance piles up untouched month after month, the account can eventually grow toward that limit and put eligibility at risk. The practical answer is simply to 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 After it come a handful of others when they apply: any earned-income deduction, current health-insurance costs such as a Medicare premium, and, for a married resident whose spouse still lives in the community, a monthly maintenance allowance that shifts income to that spouse. 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: certain routine 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

That protected list includes nursing services, meals and nutrition services, the activities program, room and bed maintenance, and routine personal hygiene items and services, things like a comb and brush, bath soap, 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 basic hair and nail hygiene.5 A resident's $100 allowance is meant for the extras beyond that baseline, a preferred brand of shampoo, a salon perm, magazines, outings, gifts, not for the basics the facility already owes.

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, and it interacts with the Personal Needs Allowance in a way worth understanding carefully.

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, but the same law protects the $90: a nursing facility's Medicaid payment can't be reduced by that retained pension, so the $90 stays with the veteran rather than flowing to the facility.3

Here's where the two rules meet. The federal statute is explicit that the retained $90 VA pension is kept in addition to any state Medicaid personal needs allowance.3 So a single, childless veteran in a South Dakota Medicaid nursing home keeps the $90 VA pension and, separately, the $100 South Dakota Personal Needs Allowance drawn from their other income.3,1 Each amount comes from its own source under its own rule, so don't let a caseworker treat the $90 as if it replaces or reduces the state allowance.

The math changes for a married veteran or one with a dependent child, where the $90 cap may not apply the same way.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.