South Dakota Medicaid Spousal Impoverishment 2026: CSRA Guide

South Dakota Medicaid spousal impoverishment rules protect the at-home spouse when one partner needs nursing facility care, and South Dakota applies the full federal CSRA range.

How South Dakota Medicaid Spousal Impoverishment Works

When one spouse enters a nursing facility or qualifies for a home- and community-based services (HCBS) waiver, South Dakota Medicaid applies federal spousal impoverishment protections under 42 USC § 1396r-5. These rules divide into two parts: an asset protection for the at-home spouse and an income protection.

South Dakota is an income-cap state administered by the Department of Social Services (DSS). The institutionalized spouse must have income at or below $2,982/month (300% of the 2026 SSI Federal Benefit Rate) to qualify, and applicants over that limit must establish a Qualified Income Trust (also called a Miller Trust) before Medicaid will pay for long-term care.

The community spouse's asset and income protections are calculated independently from the income eligibility rules.

The spouse entering long-term care is called the institutionalized spouse. The spouse who remains at home is the community spouse.

How the South Dakota Medicaid Spousal Impoverishment CSRA Works

The Community Spouse Resource Allowance (CSRA) is the portion of the couple's countable assets that the community spouse gets to keep when the institutionalized spouse applies for South Dakota Medicaid long-term care coverage.

The Snapshot Date

Before South Dakota calculates the CSRA, the program takes a snapshot of the couple's total countable assets. The snapshot date is the first day of a continuous period of institutionalization, typically the date the institutionalized spouse enters a nursing facility for a stay of at least 30 continuous days.

The snapshot date matters because the CSRA is based on that frozen figure, not on the couple's asset position at the time of the Medicaid application.

The Half-of-Assets Formula

South Dakota applies the federal formula: the community spouse keeps half of the couple's total countable assets at the snapshot date, subject to minimum and maximum limits.

For 2026:

• Minimum CSRA: $32,532 (if half the assets is less than this, the community spouse still keeps $32,532)
• Maximum CSRA: $162,660 (if half the assets exceeds this, the community spouse keeps $162,660)

South Dakota applies the federal maximum, giving South Dakota couples the most the law allows.

A worked example illustrating the formula:

The figures below are hypothetical and shown only to illustrate how the calculation works. They are not a real case and not a prediction of your own result.

A couple in Sioux Falls has $150,000 in joint savings and a $60,000 CD. Total: $210,000. Half is $105,000, which falls between the floor and ceiling, so the community spouse keeps $105,000.

The institutionalized spouse's share is $105,000. South Dakota allows a single applicant $2,000 in countable assets, so roughly $103,000 must be spent down before Medicaid eligibility is established.

What Counts as a Countable Asset?

Both spouses' assets are pooled regardless of whose name is on the account. Countable assets generally include:

• Checking and savings accounts
• CDs and money market funds
• Stocks, bonds, and mutual funds
• Both spouses' IRAs and 401(k)s
• Cash value of life insurance above $1,500 face value
• Non-home real estate

Assets that are exempt include the primary home, one vehicle, household goods and personal effects, and prepaid burial contracts.

How the South Dakota Medicaid Spousal Impoverishment MMMNA Works

The Minimum Monthly Maintenance Needs Allowance (MMMNA) is the income protection for the at-home spouse.

For 2026, South Dakota applies:

• Floor (minimum MMMNA): $2,643.75/month (effective 7/1/2025 through 6/30/2026)
• Ceiling (maximum MMMNA): $4,066.50/month (effective 1/1/2026 through 12/31/2026)

The Name-on-the-Check Rule

Under federal law (42 USC § 1396r-5(b)(2)), the community spouse keeps all of her own income regardless of amount. Income in the community spouse's name does not factor into the applicant's Medicaid eligibility.

Only the institutionalized spouse's income flows toward the nursing facility cost.

Income Diversion

When the community spouse's own income falls below the MMMNA floor, South Dakota allows an income diversion from the institutionalized spouse's income to bring the community spouse up to the floor.

The institutionalized spouse's income is reduced by the Personal Needs Allowance ($100/month in South Dakota), Medicare Part B premiums, and other deductions. From the remainder, enough is diverted to the community spouse to reach the MMMNA floor. The remaining amount is the patient liability, paid to the nursing facility. South Dakota Medicaid covers the rest.

Worked example #1 illustrating income diversion:

The figures below are hypothetical and shown only to illustrate how the calculation works. They are not a real case and not a prediction of your own result.

The community spouse receives $1,400/month from Social Security. The MMMNA floor is $2,643.75/month. Her shortfall is $1,243.75/month. The institutionalized spouse receives $2,300/month from Social Security and pension. After the $100 PNA and a $185 Medicare Part B premium, $2,015 is available. Of that, $1,243.75 is diverted to the community spouse. The remaining $771.25 goes to the nursing facility. South Dakota Medicaid covers the rest.

Reaching the MMMNA Ceiling

The community spouse can reach the $4,066.50 ceiling if she has excess shelter costs above the federal shelter standard ($793.13/month for 2026). Actual rent, mortgage, property taxes, homeowners insurance, and utilities exceeding $793.13/month raise the allowable income toward the ceiling.

The Home and Home Equity in South Dakota

The primary residence is exempt from Medicaid eligibility calculations as long as the community spouse lives there.

For 2026, the South Dakota home equity cap is $752,000. If the community spouse lives in the home, the equity cap rarely comes into play.

South Dakota applies a 60-month lookback on asset transfers. Consult an elder law attorney if any assets were transferred within five years before application.

Assets That Are Exempt

Beyond the home, other asset categories are excluded from the Medicaid eligibility calculation:

• Primary residence (equity up to $752,000 while the community spouse lives there)
• One vehicle of any value
• Household goods and personal effects
• Prepaid irrevocable burial contracts
• Burial plots for the applicant and immediate family

The Miller Trust and Income Eligibility in South Dakota

Because South Dakota is an income-cap state, an institutionalized spouse whose gross monthly income exceeds $2,982 must establish a Qualified Income Trust (Miller Trust) before South Dakota Medicaid will pay for long-term care. Each month, the excess income above $2,982 is deposited into the trust; from it, the trustee pays the personal needs allowance, the community spouse income diversion, Medicare premiums, and the patient liability. The trust must be irrevocable and name the South Dakota DSS as the remainder beneficiary. An elder law attorney should draft it.

For more on income eligibility, see South Dakota Medicaid eligibility and income limits.

South Dakota Medicaid Spousal Impoverishment and the Application Process

Who Administers This

South Dakota Medicaid for long-term care is administered by the South Dakota Department of Social Services (DSS). The CSRA and MMMNA are calculated as part of the nursing home Medicaid application.

How to Request a Resource Assessment

A couple can request a resource assessment without filing a full Medicaid application. Apply online through the DSS Economic Assistance portal or by phone at 1-605-773-3165.

The Application Process

South Dakota Medicaid long-term care applications generally follow these steps. For a full walkthrough, see the South Dakota Medicaid how-to-apply guide.

1. Gather documentation: bank and brokerage statements, property records, insurance policies, income statements.
2. Determine whether a Miller Trust is needed (income over $2,982/month).
3. Apply online at eaportal.sd.gov or by phone at 1-605-773-3165.
4. DSS calculates the CSRA and MMMNA and notifies both spouses.
5. Both spouses have the right to appeal any determination.

Medicaid Planning Strategies to Consider

South Dakota's federal-maximum CSRA gives couples a solid baseline. Cases where additional planning may help include situations where countable assets exceed the $162,660 ceiling:

• Converting countable assets to exempt ones: home improvements, prepaying burial contracts, purchasing a vehicle.
• Community-spouse annuities: converting excess countable assets into an income stream using an irrevocable annuity meeting Deficit Reduction Act 2005 requirements.
• Fair hearing: if the CSRA does not generate enough income to meet the MMMNA, a fair hearing may increase the resource allowance.

For broader options, see Medicaid planning strategies.

Couples with significant assets above the CSRA ceiling should consult a South Dakota-licensed elder law attorney before applying.

Learn More

• South Dakota Medicaid Eligibility and Income Limits
• How to Apply for South Dakota Medicaid
• Medicaid Planning Strategies

Find personalized help understanding South Dakota Medicaid spousal impoverishment 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.