Tennessee Personal Needs Allowance (PNA) (2026)

When someone moves into a nursing home on TennCare, almost all of their monthly income goes to the facility, but they keep a small Personal Needs Allowance (PNA) for things Medicaid does not cover. Effective January 1, 2025, Tennessee's nursing facility PNA increased from $50 to $70 per month under Public Chapter 986 of 2024, codified at TCA § 71-5-147. The federal floor under 42 USC § 1396a(q) has been $30 since 1988. Tennessee's PNA framework also includes a uniquely high $2,982/month Community PNA for HCBS waiver participants in CHOICES Groups 2 and 3 and ECF CHOICES Groups 4-8, set at 300 percent of the SSI Federal Benefit Rate. This guide covers what the PNA is, who gets which amount across CHOICES, ECF CHOICES, the 1915(c) ID waivers, and Tennessee State Veterans Homes; how the Resident Trust Fund works; the TSVH override of the federal $90 VA pension cap; and where Tennessee sits in the national distribution.

In This Guide

• The 60-Second Version
• What Is a Personal Needs Allowance?
• 2026 Tennessee PNA Numbers, All Settings
• The 2024 PNA Increase: $50 → $70, Public Chapter 986 and the Statute-Versus-Rule Lag
• The Resident Trust Fund: How Your Money Is Held in Tennessee
• Allowable and Prohibited Spending
• Group 1 (Nursing Facility), Patient Liability Math, Step by Step
• Group 2 and Group 3 (HCBS), The $2,982 Community PNA
• ECF CHOICES, I/DD Waiver Groups 4–8
• The 1915(c) ID Waivers, Statewide ID, Self-Determination, Arlington
• Veteran-Specific: $90 VA Cap, the TSVH Override, and Stacked $160
• Working Residents, The $100 Sheltered Workshop Disregard
• When PNA Balance Approaches the $2,000 Asset Limit
• Death of a Resident, Where the Money Goes
• Power of Attorney, Conservatorship, and Resident Representative Rules
• Cross-State PNA Comparison (2026)
• The Federal $30 Floor and the PNA Modernization Act
• Tennessee PNA History 1988–2026
• Three Worked Examples
• Where to Get Help When PNA Is Mishandled
• Pending Policy Watch
• 12 Tennessee-Specific PNA Pitfalls
• Related Reading

The 60-Second Version

If your loved one receives Tennessee Medicaid (TennCare) long-term services and supports:

1. Nursing facility residents keep $70 per month as their Personal Needs Allowance, raised from $50 effective January 1, 2025 under Public Chapter 986 of 2024 and TCA § 71-5-147.
2. HCBS waiver participants in CHOICES Groups 2 and 3 keep up to $2,982/month (300% of SSI FBR) as a "Community PNA" for rent, food, utilities, and personal needs at home, they typically owe little or no patient liability.
3. ECF CHOICES participants in Groups 4–8 (I/DD HCBS) use the same $2,982/month structure.
4. 1915(c) ID waivers vary: Statewide ID and Arlington ID waivers cap the maintenance allowance at 200% of SSI FBR ($1,988/month); Self-Determination uses 300% ($2,982).
5. The Resident Trust Fund at the facility is governed by federal 42 CFR § 483.10(f)(10), Tennessee TCA § 68-11-906 (which sets a higher $100 deposit threshold than the federal $50), and Tenn. Comp. R. & Regs. 0720-18-.04.
6. Veterans on VA pension get the federal $90/month cap under 38 USC § 5503(d) once Medicaid pays for nursing-home care, stacked with the Tennessee $70 PNA, that's $160 in personal funds.
7. Tennessee State Veterans Homes (TSVH) are different: Tennessee's contracted TSVH facilities count the full VA pension toward the cost of care rather than respecting the $90 cap. Families need to ask before placement.
8. The Tennessee $70 PNA places it at #16–17 nationally, above the $30 federal floor, but well below Alaska ($200) and Florida ($160). It is, however, a 40% raise over the prior $50 figure.
9. The administrative rule lags the statute: Tenn. Comp. R. & Regs. 1200-13-01-.08(1)(a) still codifies $50 as of its April 2023 revision. The controlling authority is TCA § 71-5-147 at $70. Eligibility counselors at DHS may quote $50 from outdated paperwork, push back and cite the statute.

What Is a Personal Needs Allowance?

When an individual receives Medicaid-funded nursing facility (NF) or institutional care, they don't pay rent or board out of pocket, Medicaid pays the facility directly through a combination of federal match (Tennessee's FMAP is 65.96% in FFY 2026), state share, and the resident's own income (their Patient Liability, sometimes called share-of-cost or PT).

Federal law requires that the resident retain a small portion of their income each month for personal expenses, clothing, toiletries beyond what the facility provides, telephone, hair care, snacks, magazines, transportation for outings. This protected amount is the Personal Needs Allowance, and it's deducted from the resident's gross income before the patient liability is calculated.

Without a PNA, a resident's entire SSI/Social Security/pension check would flow to the facility, leaving them with nothing for personal dignity, choice, or quality of life.

The PNA is mandatory under 42 USC § 1396a(q) and 42 CFR § 435.725(c)(1). The federal floor is $30 per month, and has been since the Omnibus Budget Reconciliation Act of 1987 (P.L. 100-203, § 4211, effective July 1, 1988). It has never been indexed for inflation, never raised by Congress in nearly 40 years.

States may set their PNA above the federal floor, and most do. Tennessee's $70/month is 2.33× the federal floor, but still well below Alaska's $200 and Florida's $160.

For the federal framework (the $30 floor, OBRA-87 history, the complete state-by-state table, the post-eligibility deduction order, and the pending PNA Modernization Act), see Brevy's Medicaid Personal Needs Allowance Explained federal hub.

2026 Tennessee PNA Numbers, All Settings

The 2024 PNA Increase: $50 → $70, Public Chapter 986 and the Statute-Versus-Rule Lag

Tennessee's PNA had been frozen at $50/month for nursing facility residents since 2003. For more than two decades, advocates, including the Tennessee Justice Center, AARP Tennessee, Tennessee Health Care Association, and the Tennessee Long-Term Care Ombudsman, pressed the General Assembly to raise the figure to keep pace with the cost of personal items. The 2003 $50 figure had eroded to roughly $25 in 1988 dollars by 2024.

In the 113th General Assembly (2023–2024), HB 2740 / SB 2862 ("the Tennessee PNA Increase Act") was introduced to raise the PNA from $50 to $70. It passed both chambers with bipartisan support and was signed by Governor Bill Lee on May 21, 2024 as Public Chapter 986 of 2024. The increase took effect January 1, 2025.

The statute is codified at TCA § 71-5-147, which now reads in pertinent part:

"Notwithstanding any law or rule to the contrary, the personal needs allowance for a recipient of medical assistance under this part who is a resident of a nursing facility shall be seventy dollars ($70.00) per month."

The rule lag

Here's where Tennessee gets tricky. The TennCare administrative rule at Tenn. Comp. R. & Regs. 1200-13-01-.08(1)(a) still reads, as of its last revision in April 2023:

"The personal needs allowance for nursing facility residents shall be fifty dollars ($50.00) per month."

The rule has not been amended to reflect Public Chapter 986. Under Tennessee law, when a statute conflicts with an administrative rule, the statute controls (TCA § 4-5-203). But families and even DHS/TennCare eligibility counselors sometimes still quote the rule's $50 figure from older training materials.

What to do if you're told $50: Cite TCA § 71-5-147 directly. The TennCare LTSS Operations Bulletin OPS-25-001 (issued December 2024) instructs all MCO and DHS staff to apply $70 effective January 1, 2025. If the issue persists, escalate to TennCare Member Services (1-800-878-3192) or file a complaint with the Tennessee Long-Term Care Ombudsman (1-877-236-0013).

Practical implication for facilities: Tennessee NFs should have updated their resident trust fund accounting and patient-liability calculations effective January 1, 2025. The Tennessee Health Care Association issued member guidance in November 2024 walking through the operational transition. If your loved one's facility still credits only $50 to their resident trust fund, that's a billing error, and the facility owes the difference retroactively.

The Resident Trust Fund: How Your Money Is Held in Tennessee

When a Tennessee Medicaid resident keeps their $70 PNA, the facility must administer those funds in compliance with federal law (42 CFR § 483.10(f)(10)), Tennessee statute (TCA § 68-11-906), and Tennessee licensing rules (Tenn. Comp. R. & Regs. 0720-18-.04 for nursing homes; 0720-22-.04 for HFC; corresponding rules for ICF/IID).

Federal requirements (42 CFR § 483.10(f)(10))

The facility:

• May not require residents to deposit personal funds with the facility, but must hold and safeguard them if requested in writing.
• For Medicaid residents: any balance over $50 must be in a separate interest-bearing account (versus the $100 threshold for non-Medicaid residents).
• Pooled trust accounts are permitted but must include separate accounting for each resident.
• Must provide quarterly statements showing all deposits, withdrawals, and the running balance.
• Must notify the resident when their balance approaches the resource limit ($2,000 in Tennessee for ABD/LTC).
• Must convey funds and a final accounting to the resident's estate within 30 days of death or to the resident within 30 days of discharge.
• Must purchase a surety bond sufficient to recover all resident funds if the facility were to default.

Tennessee-specific requirements (TCA § 68-11-906 and Tenn. Comp. R. & Regs. 0720-18-.04)

Tennessee's resident-funds statute is stricter than the federal rule in two specific ways:

1. $100 deposit threshold (vs. federal $50). TCA § 68-11-906(c) provides that any single-resident deposit exceeding $100 must be placed in a separate interest-bearing account. This is a higher floor than the federal $50 threshold for Medicaid residents, Tennessee picked the larger number, so the federal rule controls for Medicaid (any balance over $50 goes interest-bearing).
2. Quarterly written accounting must be provided to the resident or representative without charge, and must reconcile to the penny against the facility's general ledger.

Tenn. Comp. R. & Regs. 0720-18-.04 (nursing homes) and 0720-22-.04 (residential homes for the aged / homes for the aged), both promulgated by the Tennessee Health Facilities Commission (HFC) following the 2022 transfer of licensing authority from the Department of Health, require:

• A separate identifiable record for each resident's personal funds.
• Reconciliation against bank statements at least monthly.
• Surety bond or self-insurance arrangement equal to 110% of the maximum aggregate trust balance.
• Immediate notification to the HFC (Tennessee Health Facilities Commission) and the Long-Term Care Ombudsman of any suspected misappropriation.
• Annual independent audit of resident trust funds for facilities with 50+ beds.

Reporting suspected mishandling

If you suspect a Tennessee facility has mishandled, commingled, or stolen resident PNA funds:

1. Tennessee Health Facilities Commission (HFC), Complaint Line: 1-877-287-0010. Online: hfc.tn.gov/complaints.
2. Tennessee Long-Term Care Ombudsman, 1-877-236-0013 (statewide hotline operated through the Tennessee Commission on Aging and Disability, TCAD).
3. TennCare Office of Program Integrity, 1-800-433-3982 (for Medicaid-billing fraud overlap).
4. Adult Protective Services (APS), 1-888-277-8366 (24-hour reporting line).
5. Tennessee Bureau of Investigation Medicaid Fraud Control Unit (MFCU), for criminal-grade misappropriation. tbi.tn.gov.
6. Consider involving the county district attorney for theft prosecution (TCA § 39-14-103).

The HFC has authority under TCA § 68-11-207 to issue civil monetary penalties up to $25,000 per violation for resident-fund mishandling.

Allowable and Prohibited Spending

The PNA is the resident's money. Federal regulations (42 CFR § 483.10(g)(8)) and Tennessee licensing rules sharply limit what facilities can charge against the PNA.

Allowable (resident chooses):

• Clothing and shoes beyond what the facility issues
• Personal toiletries, cosmetics, hair products beyond what the facility provides
• Telephone, long distance, cell phone bills, plan upgrades
• TV streaming services, magazines, books, hobbies
• Snacks, soft drinks, treats from the facility canteen
• Hair salon, manicures (when not part of the facility's standard service)
• Outings, transportation, entertainment outside the facility
• Gifts for family, donations, religious offerings
• Personal medical care items not covered by Medicaid (e.g., elective dental over Medicaid coverage limits)
• Burial pre-payment (within Tennessee's $1,500 burial exclusion, plus an irrevocable funeral trust under TCA § 71-5-117)

Prohibited charges against the PNA (under 42 CFR § 483.10(g)(8), "Limitations on Charges"):

Facilities may not charge the PNA for:

• Nursing services (covered by Medicaid)
• Activities of daily living (ADL) assistance, bathing, dressing, feeding, toileting, transfer
• Drugs or biologicals (covered by Medicaid Drug Rebate Program or Medicare Part D)
• Routine personal hygiene items issued by the facility, comb, brush, soap, toothbrush, toothpaste, deodorant, denture care, sanitary napkins, basic shampoo
• Linens, gowns, slippers issued by the facility
• Standard meals
• Room cleaning, maintenance, repairs to standard equipment
• Standard medical equipment use (wheelchair, walker if part of routine care)

Tennessee F-tag enforcement: F570 (Security and Personal Funds) and F571 (Limitations on Charges) under CMS State Operations Manual Appendix PP. Tennessee surveyors with HFC issue these tags during routine and complaint surveys; Tennessee averages 24 F570 tags and 18 F571 tags per year statewide (per CMS QCOR data, FY 2024).

Facility staff sometimes attempt to bill the PNA for "incontinence supplies" beyond the facility's basic stock or "extra laundry." Both are nursing-care components and cannot be charged. If you see them on a quarterly statement, raise it with the administrator or the Ombudsman.

Group 1 (Nursing Facility), Patient Liability Math, Step by Step

Here's how Tennessee calculates a nursing-facility resident's patient liability in 2026:

Step 1, Start with countable monthly income

Add up:

• Social Security retirement, SSDI, or survivor benefits (gross before Part B premium)
• VA pension (capped at $90 if applicable, see "Veteran-Specific" below; full pension at TSVH)
• Private pensions, annuities (most pension distributions count)
• Required Minimum Distributions from IRAs (the entire RMD counts as income in the month received)
• Interest, dividends, royalties

Exclude (per TCA § 71-5-103, federal SSI rules at 20 CFR § 416.1100, and TennCare LTSS Manual):

• The first $20 of unearned income (general income disregard)
• The first $65 of earned income + half the rest (earned income disregard, if applicable)
• VA Aid & Attendance and Housebound (40 USC and 38 USC § 5503 framework)
• Reparations from foreign governments, German Restitution payments
• Holocaust survivor reparations
• The income of a community spouse (Tennessee follows the "name on the check" rule, community spouse income is the spouse's, not the applicant's)

Step 2, Subtract the post-eligibility deductions in this order

(Per 42 CFR § 435.725(c) and TennCare LTSS Manual)

1. Personal Needs Allowance, $70/month
2. Maintenance Needs of the Community Spouse (MMNA), for 2026, between $2,643.75 (the federal floor through 6/30/2026) and $4,066.50 (the maximum, eff. 1/1/2026). The exact MMNA depends on the community spouse's actual shelter costs and income.
3. Family Allowance for dependent minor children, dependent adult children with disabilities, dependent siblings, or dependent parents living in the community.
4. Court-ordered support obligations (current child support, alimony, garnishments).
5. Medicare Part B premium ($202.90/month standard for 2026, +9.7% YoY), only deducted if the resident pays it directly (i.e., not enrolled in a Medicare Savings Program).
6. Medicare Part D premium for plans above the regional benchmark (Tennessee's 2026 benchmark is in the $40–45 range; LIS-eligible residents pay $0).
7. Medigap or Medicare Advantage premiums if the resident keeps such coverage post-NF placement.
8. "Health insurance and other remedial care expenses" not paid by Medicaid, including dental copays beyond TennCare dental coverage limits.

Step 3, Whatever remains is the patient liability

The facility bills Medicaid for the difference between the daily Medicaid NF rate (Tennessee's average 2026 rate is approximately $210/day for nursing facilities) and the monthly patient liability.

Worked Example, Single Tennessee NF resident, no community spouse, no veteran benefits

Mrs. Owens, age 84, lives at Magnolia Manor Nursing Home in Knoxville. She has:

• Social Security: $1,860/month
• Small private pension: $310/month
• No spouse, no dependents

Step 1: Countable income = $1,860 + $310 = $2,170/month

Step 2, Deductions:

• PNA: $70
• Medicare Part B (paid directly): $202.90
• No spouse, no family allowance, no court-ordered support, no Part D excess

Patient Liability = $2,170 − $70 − $202.90 = $1,897.10/month

Mrs. Owens turns over $1,897.10 of her income to Magnolia Manor each month. Magnolia Manor bills TennCare for the daily rate minus that patient share. Mrs. Owens keeps $70 in her resident trust fund, which she uses for her hair appointment ($25 every six weeks at the on-site salon), her phone bill ($30 cell phone plan), and small purchases at the canteen.

Worked Example, Married TN NF resident with community spouse

Mr. Reyes, age 79, lives at a Memphis NF. His wife, Carmen, lives at home. Mr. Reyes has:

• Social Security: $2,440/month
• VA Survivor Pension (he is a veteran, no Aid & Attendance): $0 (hypothetical: he doesn't qualify)
• He pays Medicare Part B directly

Carmen's income is $1,150/month (her own Social Security). Their housing costs in Memphis are $1,890/month (rent + utilities + property tax escrow).

Step 1: Mr. Reyes's countable income = $2,440

Step 2, Deductions:

• PNA: $70
• MMNA for Carmen: calculate the excess shelter allowance, $1,890 actual shelter (rent + utilities + property tax) − $793.13 (federal Standard Shelter / 30% × MMMNA floor for 7/1/2025–6/30/2026) = $1,096.87 excess shelter. MMNA = federal floor $2,643.75 + $1,096.87 = $3,740.62 (under the 2026 cap of $4,066.50). Carmen's own income ($1,150) is subtracted from her MMNA target. Net spousal allowance needed from Mr. Reyes's income = $3,740.62 − $1,150 = $2,590.62. (See TN spousal impoverishment guide for the full ESA mechanics.)
• Medicare Part B: $202.90

Patient Liability = $2,440 − $70 − min($2,590.62, $2,167.10) − $202.90 = $0 (the spousal allowance is capped at Mr. Reyes's available income of $2,167.10 after PNA and Medicare; even with this cap the patient liability is zero because the MMNA need exceeds his entire available income).

Mr. Reyes pays the facility nothing as a share-of-cost. His entire $2,440 stays out of the facility, $70 to his trust fund, $202.90 to Medicare, $2,167.10 to Carmen as the spousal allowance. Medicaid pays the full daily NF rate.

This is a common outcome for married Tennesseans with a community spouse, especially when the institutionalized spouse has the larger income.

Group 2 and Group 3 (HCBS), The $2,982 Community PNA

CHOICES Group 2 (the at-home HCBS group for individuals who meet the nursing-facility level of care) and Group 3 (the at-risk group) work fundamentally differently from Group 1 institutional placement. Members live in their own home, an apartment, a relative's home, or a residential setting in the community. They receive in-home services (personal care, homemaker, adult day, home-delivered meals, attendant care, and more), not facility-based care.

For Group 2/3 members, the post-eligibility "Community PNA" maintenance allowance equals the full Special Income Standard, $2,982/month in 2026 (300% of the federal SSI Federal Benefit Rate of $994/month, effective 1/1/2026 through 12/31/2026).

This means most Group 2 and Group 3 members owe little or no patient liability. Their income up to $2,982/month is fully protected for community living expenses (rent, food, utilities, transportation, personal needs).

How patient liability is calculated for Group 2/3

Following the post-eligibility framework at 42 CFR § 435.726 (the HCBS waiver post-eligibility rule):

Step 1: Countable income (same SSI methodology as Group 1)

Step 2: Deduct in this order:

• Community PNA = $2,982 (300% SSI FBR)
• Family allowance for dependents
• Court-ordered support
• Health insurance premiums (Part B, Part D if not LIS-covered, Medigap)
• "Remedial care" not covered by TennCare

Step 3: Whatever remains is patient liability, paid to the assigned Managed Care Organization (BlueCare Plus, UnitedHealthcare Community Plan of Tennessee, or Wellpoint TN), NOT to a facility.

Because the Special Income Standard is also Tennessee's income cap for institutional Medicaid eligibility ($2,982 in 2026), most Group 2/3 members have income at or below the protection threshold, leaving $0 patient liability.

What if a Group 2 member has income above $2,982?

Then they need a Qualified Income Trust (QIT, also called a Miller Trust) authorized federally by 42 USC § 1396p(d)(4)(B) and implemented in Tennessee through Tenn. Comp. R. & Regs. 1240-03-03-.03(8) and the TennCare ABD Eligibility Manual "Trusts" chapter (Tennessee has no stand-alone QIT statute; authority is regulatory). Income deposited to the QIT is excluded from the eligibility income cap. Only the income that flows out of the QIT for the resident's medical and personal needs counts in the patient-liability calculation. The Community PNA still applies.

Short-term NF stays

If a Group 2 member has a short-term nursing facility stay of 90 days or less (e.g., post-surgical rehabilitation), their Community PNA continues during the stay, TennCare preserves community residence. The home is held open. Group 1 Patient Liability calculations only kick in if the stay exceeds 90 days or the discharge plan transitions to long-term institutional care.

ECF CHOICES, I/DD Waiver Groups 4–8

Employment and Community First (ECF) CHOICES is Tennessee's comprehensive 1115 waiver demonstration for individuals with intellectual and developmental disabilities. It replaced and consolidated the older 1915(c) ID waivers for new enrollees beginning July 2016 (under the TennCare III §1115 demonstration, currently approved through 12/31/2030 per CMS letter dated 12/16/2024).

ECF CHOICES has five service groups, each with its own service catalog:

• Group 4, Essential Family Supports (children under age 21 living with family)
• Group 5, Essential Supports for Employment and Independent Living (working-age adults, lower acuity)
• Group 6, Comprehensive Supports for Employment and Community Living (working-age, higher acuity)
• Group 7, Intensive Behavioral Supports
• Group 8, Comprehensive Behavioral Supports

For all five groups, the post-eligibility Community PNA is $2,982/month (300% SSI FBR), identical in mechanics to CHOICES Groups 2/3. ECF members live in the community (with family, in their own home, in a Family Model Residential Support setting, or a Companion Care arrangement) and the Community PNA preserves enough income for community living.

ECF is administered jointly by the TennCare Long-Term Services and Supports (LTSS) division and the Tennessee Department of Disability and Aging (TDDA), formerly the Department of Intellectual and Developmental Disabilities (DIDD), renamed and restructured in 2023.

The 1915(c) ID Waivers, Statewide ID, Self-Determination, Arlington

Tennessee continues to operate three legacy 1915(c) Medicaid HCBS waivers for individuals who entered the I/DD service system before ECF CHOICES took over new enrollment in 2016:

The lower 200%-of-SSI-FBR maintenance allowance ($1,988 vs. $2,982 under ECF and Self-Determination) is a holdover from waiver design choices made in the 1990s, when Tennessee adopted a more restrictive post-eligibility framework for Statewide ID and Arlington members. These waivers are grandfathered, TennCare cannot raise the legacy figure without CMS approval to modify the existing waiver, and there's been no policy push to do so given the planned phase-out.

Practical impact: Statewide ID and Arlington members with income between $1,988 and $2,982/month pay the difference as patient liability to their MCO. A Statewide ID member with $2,400/month income pays $412/month patient liability; an ECF Group 6 member with the same income pays $0.

This is one of the most significant operational disparities in TennCare's I/DD system. Advocates at The Arc Tennessee, Tennessee Disability Coalition, Disability Rights Tennessee (the state's Protection and Advocacy organization), and the Tennessee Council on Developmental Disabilities have flagged the disparity, but a formal waiver amendment to align all waivers at 300% has not been submitted to CMS as of May 2026.

If you have a family member on Statewide ID or Arlington ID and their income is approaching the $1,988 cap, consider asking TennCare or your DDA case manager about transition options to ECF CHOICES, though such transitions require service plan changes and aren't always advantageous.

Veteran-Specific: $90 VA Cap, the TSVH Override, and Stacked $160

The federal $90 VA pension cap

Under 38 USC § 5503(d)(1), when a veteran (or surviving spouse) is receiving VA pension benefits AND becomes a Medicaid-paid resident of a nursing facility, the VA reduces the pension to $90 per month. The other 38 USC § 5503(d) provisions (38 CFR § 3.551(i) implements) define how this reduction interacts with Medicaid post-eligibility.

The $90 reduction is excluded from the veteran's countable income for Medicaid purposes, Tennessee TennCare follows the federal pre-emption. This means the $90 stacks on top of the Tennessee $70 PNA, giving the veteran resident $160/month in personal funds.

The $90 cap applies to:

• Veterans receiving VA Pension (low-income)
• Surviving spouses receiving VA Survivor Pension (Death Pension)
• Veterans receiving Aid & Attendance (A&A), though the A&A increment is typically reduced to $0 or kept under different framework
• Veterans receiving Housebound benefit

It does NOT apply to:

• Service-connected disability compensation (which has no cap)
• VA retirement pay (different pot of money)
• Non-Medicaid NF stays (private-pay)
• Community-based VA care

The $90 cap is currently scheduled to sunset January 31, 2033 under various reauthorization provisions (most recently extended in the SUPPORT for Patients and Communities Reauthorization Act of 2023). Without further legislation, on February 1, 2033 the full pension would resume.

The Tennessee State Veterans Homes (TSVH) override

This is where Tennessee gets unusual. The Tennessee State Veterans Homes (TSVH), operated under a contractual arrangement between the Tennessee Department of Veterans Services and a state-chartered nonprofit board, with five facilities (Murfreesboro, Humboldt, Knoxville, Clarksville, Crossville), are recognized by the U.S. Department of Veterans Affairs as State Veterans Homes under 38 CFR Part 51.

VA pays a per-diem to State Veterans Homes for eligible veterans. When a veteran is a resident of a TSVH AND is also TennCare-eligible (because their income/assets are low), the TSVH operating agreements count the full VA pension toward the cost of care rather than honoring the $90 federal cap.

This means a TSVH resident does NOT get the $160 stack, they get the standard $70 Tennessee PNA only, and their full VA pension flows to the facility as part of patient liability.

This is legally permissible because:

• TSVH's primary funding stream is VA per-diem, not Medicaid as primary
• Medicaid is structured as a payer of last resort under 42 USC § 1396a(a)(25)
• The TSVH operating agreement is a contractual arrangement between the resident, the home, and the state, not a Medicaid post-eligibility calculation

But it's a real difference in family economics. A veteran at a community Medicaid NF keeps $160 PNA + cap. A veteran at a TSVH facility keeps $70 only. For low-income veterans with full VA pension ($1,492/month for a single vet without dependents in 2026), the difference is meaningful, the community NF placement preserves an extra $90/month for personal use.

Action item for veteran families: Before TSVH placement, ask explicitly: "How does my VA pension flow under your operating agreement? Will I keep the federal $90 cap, or does TSVH count my full pension?" Get the answer in writing. The Tennessee Department of Veterans Services 800-VET-INFO (1-877-VET-INFO) is the state-level resource.

The TennCare interaction, special income standard math

A veteran with VA Pension is subject to Tennessee's $2,982/month income cap for institutional Medicaid eligibility. But the post-eligibility VA $90 cap applies AFTER eligibility is established.

Worked example: Marine veteran Mr. Tolliver, age 78, lives at a community NF in Chattanooga. Pre-NF placement: Social Security $1,510/month + VA Pension $1,492/month + A&A $400/month = $3,402/month gross.

Step 1, Pre-eligibility: $1,510 SS + $1,492 VA Pension + $400 A&A = $3,402. The A&A increment is excluded under SSI rules (it's not "pension"). So countable income for TN's $2,982 cap is $1,510 + $1,492 = $3,002, that's $20 over the cap. Mr. Tolliver needs a Qualified Income Trust to get under the income cap. (Or, alternatively, he may be eligible based on the income cap because the $20 general income disregard applies, eligibility planners run this calculation case-by-case.)

Step 2, Post-eligibility once on Medicaid: VA reduces his pension to $90/month under 38 USC § 5503(d). Now his countable income is $1,510 SS + $90 VA = $1,600. After:

• $70 PNA: $1,530
• $202.90 Medicare Part B: $1,327.10

Mr. Tolliver pays $1,327.10/month patient liability. He keeps $160/month ($70 PNA + $90 VA) for personal use.

Had Mr. Tolliver gone to a TSVH facility instead, he'd keep $70/month only, the full $1,492 VA pension would flow through TSVH per-diem accounting.

For deeper detail on Tennessee veteran-specific Medicaid eligibility, see Brevy's Tennessee State Veterans Homes guide and Tennessee VA Pension and Medicaid LTSS interaction.

Working Residents, The $100 Sheltered Workshop Disregard

Tennessee, like most states, allows a limited earned-income disregard for residents who continue to work, typically in a sheltered workshop or supported employment setting through a 1915(c) waiver provider, an ECF CHOICES employment service, or a private employer.

The disregard structure follows SSI methodology under 20 CFR § 416.1112:

• First $20 general income disregard
• First $65 earned income disregard
• Half of remaining earned income excluded

For practical TennCare purposes, a sheltered workshop earner with $200/month gross earnings would have:

• $200 − $65 = $135
• $135 ÷ 2 = $67.50 countable

So $200 in gross earnings adds only $67.50 to countable income for patient-liability purposes. The resident keeps the disregard amount as "earned income" on top of their PNA, effectively up to $100/month in additional pocket money in addition to the $70 PNA.

This matters most for ECF CHOICES Group 5/6 members who participate in supported employment. It rarely applies to nursing-facility residents because Medicaid NF residents are typically too medically complex to maintain employment.

The Tennessee DHS Family Assistance Manual (Vol. II, Chapter 110) and TennCare LTSS Pre-Eligibility Manual codify these calculations. Counselors at the local DHS office (1-866-311-4287) can run the exact figure for a specific individual.

When PNA Balance Approaches the $2,000 Asset Limit

Tennessee's resource limit for institutional Medicaid (and for most LTSS waivers) is $2,000 for an individual. The community spouse has a much higher Community Spouse Resource Allowance, $162,660 for 2026 (the federal maximum, effective 1/1/2026 per CMS CIB dated 12/9/2025), with a $32,532 minimum. See the dedicated TN spousal impoverishment guide for snapshot mechanics, fair-hearing increases, and the SFA model.

PNA accumulates in the resident trust fund. A resident who spends modestly might accumulate $50–$60/month, reaching the $2,000 cap in 2.5–3 years. Once the balance approaches $2,000, the resident is at risk of losing Medicaid eligibility for excess resources.

What facilities must do

Per 42 CFR § 483.10(f)(10)(iii), the facility must notify the resident or their representative when the balance reaches within $200 of the SSI/Medicaid resource limit ($1,800 in Tennessee). The notification triggers the family's obligation to spend down.

What families can do, allowable spend-down for PNA balances

• Burial pre-payment: Tennessee excludes up to $1,500 of irrevocable burial space items + an irrevocable funeral trust under TCA § 71-5-117(b)
• Personal effects with a fair-market value over $2,500 (clothing, electronics, jewelry, Tennessee uses the federal SSI exclusion at 20 CFR § 416.1216)
• Dental work beyond TennCare coverage limits (Tennessee dental coverage for adults is limited; see Brevy's TN Medicaid dental coverage guide)
• Prosthetic and orthotic devices beyond Medicaid coverage
• Hearing aids and eyeglasses beyond Medicaid coverage
• Adaptive equipment for the resident's individual needs
• Personal goods purchase, clothing, books, hobby supplies, personal electronics
• Family visits, the resident's PNA can pay for a family member's transportation to visit

What is NOT a permitted spend-down

• Gifts to family in excess of de minimis amounts (subject to the 60-month look-back at 42 USC § 1396p(c) and TCA § 71-5-1605)
• Loans to family
• Investment purchases
• Cash withdrawals retained as cash

The 60-month look-back applies. A $1,500 "gift" to a daughter is a transfer for less than fair-market value and triggers a penalty period.

For more detail, see Brevy's Tennessee Medicaid look-back and penalty divisor guide.

Death of a Resident, Where the Money Goes

Per 42 CFR § 483.10(f)(10)(vi), the facility must convey the deceased resident's personal funds to:

1. The administrator/executor of the estate
2. If no estate is opened (small-estate threshold), to the next of kin under Tennessee intestacy rules (TCA § 31-2-104)

Within 30 days of death, with a final accounting reconciling all deposits and withdrawals.

Tennessee small-estate procedure

Tennessee's small-estate procedure under TCA § 30-4-101 covers estates with personal property under $50,000 (excluding the homestead and one motor vehicle). For most resident PNA balances at death, the small-estate affidavit (TCA § 30-4-103) is the applicable procedure, far simpler than full probate.

The process:

1. Wait 45 days from date of death
2. File a small-estate affidavit at the chancery or probate court in the county of the decedent's residence
3. Affidavit requires identification of all assets, debts, and heirs
4. Once granted, the affidavit is presented to the facility
5. Facility releases the trust fund balance + final accounting

Tennessee estate recovery

Tennessee estate recovery is limited to probate assets only under TCA § 71-5-116 and SPA TN-24-0002 (effective 4/1/2024). Tennessee does not pursue TEFRA liens (it's one of the small group of states without a TEFRA program). The recovery threshold is $10,000, TennCare won't pursue recovery if the total Medicaid claim is under $10,000, recognizing collection costs.

A resident's $500–$1,500 trust fund balance at death is technically a probate asset (and thus subject to recovery), but in practice TennCare's $10,000 floor means small balances are not pursued. The family receives the funds.

For deeper detail, see Brevy's Tennessee Medicaid estate recovery guide.

Power of Attorney, Conservatorship, and Resident Representative Rules

Tennessee operates under the Tennessee Health Care Decisions Act (TCA § 68-11-1801 et seq.) and the Tennessee Conservatorship Act (TCA § 34-3-101 et seq.).

POA, Power of Attorney for finance

A durable financial POA (TCA § 34-6-101 et seq.) authorizes an agent to manage the resident's finances, including the PNA / resident trust fund. The POA must be:

• Written and signed by the resident before incapacity
• Notarized for real estate transactions; advisable for all financial transactions
• "Durable", i.e., effective when the principal is incapacitated, per TCA § 34-6-102

The facility may require a copy of the POA before allowing the agent to deposit/withdraw from the resident trust fund.

Conservatorship

Where there is no POA and the resident lacks capacity, the family must petition for conservatorship of the person and/or estate (TCA § 34-3-102). Tennessee uses the term "conservator" for both adult guardianships and protective arrangements for incapacitated adults.

The petition is filed in the chancery court of the county of the resident's residence. The court appoints a guardian ad litem to investigate, schedules a hearing, and may appoint a conservator. The conservator of the estate has authority over the resident trust fund.

Annual accountings are required (TCA § 34-3-110), and major financial decisions require court approval. The resident has the right to legal representation throughout, typically through a public defender (if indigent) or court-appointed counsel.

Resident Representative under federal law

Independent of state POA / conservatorship, federal law (42 CFR § 483.5) defines "resident representative" as anyone the resident has designated, anyone authorized under state law (POA, conservator, surrogate), or, if the resident lacks capacity and no other representative is identified, any individual the facility identifies as having an interest in the resident's welfare.

The facility must allow the resident representative the same access to the resident trust fund as the resident would have. If a representative is denied access, this is an F567 deficiency under CMS rules.

Cross-State PNA Comparison (2026)

How does Tennessee's $70 stack up?

Tennessee at $70 ranks roughly 16th-17th nationally, in the upper half but not top tier.

For the complete state-by-state distribution, the four typologies of state PNA design (federal floor states, modest-increase states, indexed states, regional-leader states), and how the PNA Modernization Act (HR 5685) would change the federal floor to $200 indexed to CPI, see Brevy's Medicaid Personal Needs Allowance Explained federal hub.

The Federal $30 Floor and the PNA Modernization Act

The PNA's $30 federal floor has been frozen since the Omnibus Budget Reconciliation Act of 1987 (P.L. 100-203, § 4211, effective July 1, 1988). In 1988 dollars, $30 had the purchasing power of approximately $84 in 2026 (per BLS CPI-U), meaning the floor has lost about 64% of its real value over 38 years.

The PNA Modernization Act

HR 5685 (Representative Jan Schakowsky, D-IL, 119th Congress) and its companion HR 7778 would:

• Raise the federal floor to $200/month
• Index it annually to the consumer price index
• Apply to all states retroactive to the effective date

The bill's predecessors:

• HR 3853 (116th Congress, 2019), proposed a $50 floor; died in Energy & Commerce subcommittee
• HR 7682 (118th Congress, 2024), proposed $60 individual / $120 couple; died in committee
• HR 5685 (119th Congress, 2025), currently pending; co-sponsored by 47 House Democrats; no Republican co-sponsors as of May 2026

Key endorsers include AARP, Justice in Aging, Center for Medicare Advocacy, National Association of State Long-Term Care Ombudsman Programs, Disability Rights Education and Defense Fund.

If HR 5685 passed, Tennessee would automatically raise the NF PNA from $70 to $200, a 186% increase. The cost to TennCare would be modest, because the PNA isn't paid by Medicaid, it's deducted from the resident's own income. The cost is borne by the federal/state Medicaid match (the patient liability is reduced by $130/month per resident, requiring slightly more Medicaid match to fill the gap).

Tennessee's congressional delegation has not co-sponsored HR 5685 as of May 2026. Senator Marsha Blackburn (R) and Senator Bill Hagerty (R) have not commented publicly on the bill. Congressman Steve Cohen (D-9) has expressed support in constituent correspondence but has not added formal co-sponsorship.

Tennessee PNA History 1988 to 2026

That 21-year freeze (2003-2024) cost Tennessee NF residents significant real purchasing power. $50 in 2003 had the purchasing power of approximately $86 in 2024 dollars, meaning the 2024 raise to $70, while welcome, didn't restore residents to 2003 buying power.

Public Chapter 986 sponsorship: Lead Senate sponsor was Senator Becky Massey (R-Knoxville); lead House sponsor was Representative Sam Whitson (R-Franklin). Bipartisan companion support included Senator Sara Kyle (D-Memphis) and Representative Bo Mitchell (D-Nashville). The bill cleared both chambers without dissent and was signed without a ceremony.

Advocacy work leading up to passage came primarily from:

• Tennessee Justice Center (Nashville)
• AARP Tennessee (Nashville)
• Tennessee Health Care Association
• Tennessee Long-Term Care Ombudsman, operated through the Tennessee Commission on Aging and Disability
• The Arc Tennessee
• LeadingAge Tennessee (the senior services trade association)

Three Worked Examples

Example 1, Single TN NF resident, no spouse, no veteran benefits

Mrs. Beasley, 89, in a Memphis NF. Income: $1,720/month Social Security, no other income.

• $1,720 income
• − $70 PNA
• − $202.90 Medicare Part B
• = $1,447.10 patient liability

Mrs. Beasley keeps $70/month PNA + $202.90 returns to her checking account for Part B autopay. She has $70 in her resident trust each month for her phone bill and small purchases. She has zero personal funds beyond that.

Example 2, TN HCBS Group 2 member, lives at home with daughter

Mr. Adkisson, 76, has dementia, lives with his daughter in Knoxville. Receives CHOICES Group 2 services (home-delivered meals, attendant care 30 hours/week, adult day care 3 days/week). Income: $2,210/month Social Security.

• $2,210 income
• − $2,982 Community PNA → entire income protected
• = $0 patient liability

Mr. Adkisson pays $0/month patient liability to his MCO (BlueCare Plus). His full $2,210 stays in his pocket and helps pay his rent contribution to his daughter, his prescription copays, his phone, and personal needs. The MCO collects $0 share of cost.

Example 3, TN NF veteran with VA pension

Mr. Caldwell, 81, Vietnam veteran, in a community Medicaid NF in Chattanooga. Income: $1,290/month Social Security + $1,492/month VA Pension (single, no dependents).

Pre-NF placement: $1,290 + $1,492 = $2,782 (under the $2,982 income cap, so eligible without a QIT after $20 general disregard).

Post-eligibility once on Medicaid:

• VA reduces pension to $90 (38 USC § 5503(d) cap)
• Countable income: $1,290 SS + $90 VA = $1,380
• − $70 PNA
• − $202.90 Medicare Part B
• = $1,107.10 patient liability

Mr. Caldwell keeps $160/month ($70 PNA + $90 VA) for personal use. The other $1,107.10 of his Social Security flows to the NF as patient share.

If Mr. Caldwell were instead at a TSVH facility (e.g., Murfreesboro Veterans Home), the math would differ, TSVH's operating agreement counts the full $1,492 VA pension toward NF cost, so he'd keep only $70 PNA. Personal funds: $70/month, not $160.

The $90/month difference is meaningful for Mr. Caldwell, over a 5-year stay, that's $5,400 in additional personal funds at the community NF versus the TSVH.

Where to Get Help When PNA Is Mishandled

The Long-Term Care Ombudsman is the right starting point for most PNA-related complaints. The ombudsman is independent of the facility, the state Medicaid agency, and the licensing board, and is empowered under the federal Older Americans Act (42 USC § 3058) to advocate for residents.

Pending Policy Watch

Items to track over 2026–2027:

1. TennCare administrative rule update: Tenn. Comp. R. & Regs. 1200-13-01-.08(1)(a) still references $50. A formal rule amendment is expected (per TennCare's 2026 rulemaking agenda) but not yet posted for public comment. Expected adoption Q3 2026.

2. ALW PNA equity gap: Tennessee does not operate an Assisted Living Waiver in the same form as Ohio's. CHOICES Group 2 covers some assisted-living settings (CBRA, Community-Based Residential Alternatives), and the Community PNA framework applies. No major gap as in Ohio.

3. Sheltered workshop reform: Federal sub-minimum wage debate (Section 14(c) of the Fair Labor Standards Act) may eliminate sheltered workshops by 2028. If Tennessee's sheltered workshops close, the $100 earned-income disregard becomes mostly moot, and ECF members shift to supported employment under different earning structures.

4. TennCare III §1115 demonstration renewal: The current §1115 expires 12/31/2030. CMS renewal will likely revisit ECF Community PNA percentages. Watch for proposed amendments in 2028–2029.

5. HR 5685 PNA Modernization Act: If enacted, would raise the federal floor to $200 with CPI indexing. Tennessee would automatically benefit. Track legislative calendar and the House Energy & Commerce Subcommittee on Health.

6. VA $90 cap sunset (1/31/2033): Without further action by Congress, the cap expires. Tennessee veterans would resume full pension flow (from $90 back to $1,492+ for a single-veteran, no-dependent pension), substantially raising patient liability. Expected reauthorization push in 2030–2032.

7. TSVH operating agreement re-negotiation: Tennessee's contracted TSVH facilities have operating agreements that come up for periodic re-negotiation with the Tennessee Department of Veterans Services. Advocacy to honor the federal $90 cap (instead of counting full pension) has not gained legislative traction but is a worthy policy target.

8. Public Chapter 182 of 2025 (Freedom for Family Caregiving Act): Effective 7/1/2025. Expands paid family caregiver opportunities under CHOICES, does not directly affect PNA but affects who can be paid to provide care, indirectly affecting the financial picture of HCBS members. See Brevy's Tennessee paid family caregiver guide.

12 Tennessee-Specific PNA Pitfalls

1. The $50 rule lag. Tenn. Comp. R. & Regs. 1200-13-01-.08(1)(a) still says $50; the controlling authority is TCA § 71-5-147 at $70. If a facility or counselor cites $50, push back with the statute.

2. Conflating Group 1 PNA with Group 2/3 Community PNA. They're entirely different, $70/month for NF residents vs. $2,982/month for HCBS members. Don't apply Group 1 logic to a home-based member or vice versa.

3. Forgetting the TSVH override. Veterans at Tennessee State Veterans Homes do NOT get the federal $90 cap stacked with the TN PNA. Confirm in writing at admission.

4. Statewide ID vs. Self-Determination disparity. If a family member is on the legacy Statewide ID waiver, their maintenance allowance is $1,988 (200% SSI), not $2,982 (300%). This can yield non-zero patient liability the family didn't expect.

5. Late notification of approaching $2,000 cap. Facilities are required to notify when balance hits $1,800. If your facility doesn't, you can lose Medicaid for excess resources without warning. Check trust fund balances quarterly.

6. Believing facility staff that the PNA covers personal hygiene items. It doesn't, the facility must provide soap, toothpaste, comb, brush, denture care, basic shampoo, sanitary napkins, deodorant, and basic clothing. F571 enforcement is regular in Tennessee.

7. Letting the facility cash the resident's Social Security check directly. It's permissible but creates accounting complications. Better practice: Social Security goes to the resident's bank account (or representative payee), patient liability is paid to the facility by check or ACH, $70 PNA stays in the bank or goes to the trust fund.

8. Not getting quarterly trust-fund statements. They're required. If you don't get them, the facility is non-compliant. Demand them in writing.

9. Spending PNA on family gifts. Triggers 60-month look-back. The PNA is for the resident's personal needs, not family transfers.

10. Forgetting Part D LIS. If the resident is dual-eligible (Medicare + Medicaid), they automatically qualify for Low-Income Subsidy (LIS) under 42 CFR § 423.773 with $0 Part D premium. If a facility deducts a Part D premium that LIS would otherwise cover, that's an error in the patient-liability calculation.

11. Confusing "patient liability" with "Medicaid liability". Patient liability is what the resident pays. Medicaid liability (or Medicaid daily rate) is what the program pays the facility. They're complementary, not the same.

12. Missing the 30-day post-death distribution deadline. If a resident dies and the family doesn't see the trust-fund balance within 30 days, that's a federal violation. Escalate to the Ombudsman.

Related Reading

• Medicaid Personal Needs Allowance Explained, federal hub: $30 floor (frozen since OBRA-87), complete 2026 state-by-state PNA table, Resident Trust Fund federal mechanics, VA $90 cap stacking, PNA Modernization Act (HR 5685).
• Tennessee Medicaid (TennCare) overview, the umbrella TennCare guide
• Tennessee Medicaid eligibility and income limits, the Special Income Standard ($2,982/month), QIT mechanics, asset rules
• Tennessee long-term care nursing home guide, daily rates, level-of-care, admission process
• Tennessee CHOICES program overview, Groups 1, 2, and 3
• Tennessee ECF CHOICES (I/DD), Groups 4–8
• Tennessee BlueCare Plus FIDE-SNP, managed care for dual eligibles
• Tennessee State Veterans Homes (TSVH), TSVH facilities and the $90 cap override
• Tennessee Medicaid estate recovery, probate-only recovery, $10K threshold
• Tennessee Medicaid look-back and penalty divisor, 60-month look-back rules
• Tennessee Medicaid managed care plans, BlueCare, UnitedHealthcare, Wellpoint
• Tennessee paid family caregiver guide, CHOICES consumer direction
• Tennessee assisted living, care options
• Tennessee nursing homes, care options
• Tennessee memory care, care options
• Ohio Medicaid Personal Needs Allowance, sister state PNA guide
• Texas Medicaid Personal Needs Allowance, sister state PNA guide
• Florida Medicaid Personal Needs Allowance, sister state PNA guide

Learn More

• Tennessee Medicaid Programs Overview
• Tennessee Long-Term Care & Nursing Homes
• TennCare Eligibility & Income Limits
• Tennessee Spousal Impoverishment
• TennCare Estate Recovery
• How to Apply for TennCare

Find personalized help understanding Tennessee Personal Needs Allowance 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.