Vermont Medicaid Personal Needs Allowance (2026)

Vermont lets a nursing-facility resident on Long-Term Care Medicaid keep a Personal Needs Allowance of $79.93 a month, money that stays with the resident instead of going to the facility. That figure sits at the center of how the Vermont Medicaid Personal Needs Allowance works, and it has held steady since January 2024.1

In This Guide

• What the Vermont Medicaid Personal Needs Allowance Is, and Who Gets It
• How Vermont's Medicaid Personal Needs Allowance Compares to the Federal Floor
• How Your Money Is Held: The Resident Trust Fund
• Patient Share: Where the Allowance Fits in the Math
• What the Facility Must Provide (and Can't Bill to Your Allowance)
• If You're a Veteran: The VA Pension Cap
• Frequently Asked Questions
• Learn More

What the Vermont Medicaid Personal Needs Allowance Is, and Who Gets It

When someone moves into a nursing facility and Medicaid pays for that care, they don't hand the facility a rent check. Instead, almost all of their monthly income, Social Security, a pension, an annuity, goes toward the cost of care, and Medicaid covers the rest. If that were the whole story, the resident would be left with nothing of their own. The Personal Needs Allowance is the piece the law protects so that doesn't happen.

Here's how it works. Before the state calculates how much of a resident's income goes to the facility, it sets aside a fixed amount the resident keeps for personal use. In Vermont, that amount is $79.93 a month for a nursing-facility resident on Long-Term Care Medicaid.1 The money is meant for the small things a facility doesn't supply, a preferred brand of shampoo, a haircut at the on-site salon, stamps, a phone plan, a magazine subscription, a birthday gift for a grandchild, a snack from the vending machine.

Vermont's long-term-care Medicaid runs through Choices for Care, administered by the Department of Vermont Health Access, with eligibility decided by the Department for Children and Families.1 The allowance applies to residents receiving institutional nursing-facility care under that program. One thing to keep in mind about who qualifies for the underlying coverage: Vermont is a medically needy, spend-down state, so rather than a hard income cap, it uses a Protected Income Level and lets applicants whose income runs high qualify by spending the excess down on care. A single applicant's countable assets generally have to stay at or below $2,000.1 If you're still working out whether a loved one qualifies at all, our Vermont Medicaid eligibility guide walks through the income and asset rules in detail.

The allowance isn't a bonus or a discretionary payment. It's a right built into how post-eligibility income is treated, and no facility can talk a resident out of it or fold it into what they pay for care.

How Vermont's Medicaid Personal Needs Allowance Compares to the Federal Floor

Every state has to protect at least a minimum amount, but the minimum is strikingly low. Federal law sets the floor at $30 a month for an aged, blind, or disabled individual in an institution, and $60 a month for an institutionalized couple when both spouses are aged, blind, or disabled.2 That $30 figure has been fixed in the statute since 1988 and has never been adjusted for inflation.

What the federal rule gives is a floor, not a ceiling. States are free to set their allowance higher, and most do. Vermont is one of them: its $79.93 is more than two and a half times the federal minimum.1,2

That said, it's worth being honest about what $79.93 stretches to. Vermont's Office of the Long-Term Care Ombudsman, which advocates for nursing-home residents, has pointed out that the state's allowance hasn't budged, and at an average of about $2.60 a day it doesn't leave much room once a resident covers a haircut, a phone bill, and a few personal supplies in the same month.1 Knowing that going in helps families plan, because it means the allowance usually needs to be spent deliberately rather than treated as spare cash that accumulates.

How Your Money Is Held: The Resident Trust Fund

A resident can manage their own money if they're able to, and no facility is allowed to make them hand their funds over. Federal nursing-facility rules are clear on that point: the facility must not require a resident to deposit personal funds with it, and the resident keeps the right to manage their own financial affairs.3

Most residents, though, ask the facility to hold and manage the allowance for them, and that's where the resident trust fund comes in. When a facility agrees to hold a resident's money, it takes on a fiduciary duty, and federal law spells out exactly what that means:

• For a Medicaid resident, any personal funds over $50 must go into an interest-bearing account that is separate from the facility's own operating accounts. (The threshold is $100 for a resident who isn't on Medicaid.)3
• The facility has to keep a full, separate accounting and cannot commingle a resident's money with its own funds.3
• The resident's financial record must be available through quarterly statements and on request, so families can check the balance and the transactions whenever they want.3
• The facility must secure all resident funds with a surety bond or another assurance the government accepts.3
• When a resident dies, the facility has to convey the remaining funds and a final accounting within 30 days to the person or the probate court handling the estate.3

A practical habit that protects families: ask for the quarterly statement in writing and actually read it against your own records of what was bought. If a purchase you didn't authorize shows up, that's the moment to raise it, not months later. And keep an eye on the running balance, because the trust-fund money still counts toward the $2,000 asset limit.1 If the allowance piles up unspent for a year or two, it can quietly push a resident over the resource limit and put their eligibility at risk, which is another reason the allowance is designed to be used month to month rather than saved.

Patient Share: Where the Allowance Fits in the Math

To see why the Personal Needs Allowance matters so much, it helps to understand what happens to the rest of a resident's income. Vermont calls a nursing-facility resident's contribution to the cost of care their patient share, and the allowance is the first thing carved out before that share is calculated.

The order runs roughly like this. Start with the resident's gross monthly income. Subtract the Personal Needs Allowance of $79.93.1 Subtract certain health-care costs the resident still pays out of pocket, such as a Medicare Part B premium or a Medigap premium. If there's a spouse still living at home, subtract a spousal income allowance, which under Vermont's spousal-impoverishment rules can bring the at-home spouse's income up to a monthly maintenance figure in the federal range of $2,705.00 to $4,066.50 in 2026.1 Whatever remains is the patient share, paid to the facility each month, and Medicaid covers the gap between that share and the facility's full rate.

So the allowance isn't money added on top of everything else. It's income the state agrees the resident may keep before the rest is spoken for. Without it, that whole check would flow to the facility. For a married couple, the interaction with the spousal allowance can significantly change the numbers, and our Vermont spousal impoverishment guide covers how much the at-home spouse can protect.

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

One of the most common ways a resident's allowance gets eroded is a facility charging for things it's already being paid to provide. Federal rules draw a firm line here. During a covered Medicaid stay, a set of routine items and services is included in the facility's daily rate, and the facility must not bill the resident for them, which means they can't be charged against the Personal Needs Allowance either.4

Those covered items and services include:

• Nursing services and food and nutrition services
• An activities program and routine room and bed maintenance
• Routine personal hygiene items and services, including things like a comb, brush, bath soap, razor, shaving cream, toothbrush, toothpaste, denture cleaner, and moisturizing lotion
• Incontinence care and supplies, over-the-counter drugs, towels and washcloths, bathing assistance, basic hair and nail hygiene, and basic personal laundry4

Because those are built into the per-diem the facility already receives, none of them should ever come out of the resident's allowance. If a facility tries to charge the trust fund for basic soap, a routine haircut framed as required hygiene, or incontinence supplies, that's the kind of charge to question, and the allowance is meant to be spent on preferences and extras, not on care the facility owes as part of the daily rate.

The line isn't always obvious in practice. A basic bar of soap is covered; a resident's insistence on a specific salon shampoo is a personal preference the allowance can cover. A standard haircut tied to hygiene is the facility's responsibility; a color or perm is the resident's choice. When a charge looks like it belongs on the covered list, ask the facility to point to what the resident is actually paying for.

If You're a Veteran: The VA Pension Cap

Veterans on a needs-based Department of Veterans Affairs (VA) pension face a special rule when they enter a Medicaid-paying nursing facility, and it's one families often get wrong. Under federal law, when a veteran who has neither a spouse nor a child is covered by Medicaid for nursing-facility care, no VA pension above $90 a month may be paid for any period after the month of admission.5 In effect, the pension is reduced to $90 once Medicaid is paying for the nursing home.

Here's the part that works in the veteran's favor. That $90 doesn't flow to the facility. Federal law bars the facility's Medicaid payment from being reduced by the pension the veteran is permitted to keep, so the veteran holds onto the $90, in addition to the state Personal Needs Allowance.5 The $90 VA cap and Vermont's $79.93 allowance come from two different bodies of law, the VA pension rule and Vermont's Medicaid post-eligibility rule, and each is protected on its own terms.

The $90 cap applies to a single veteran with no spouse or dependent child.5 If the veteran is married or has a dependent, the treatment can differ, so it's worth confirming the specifics with both a Veterans Service Officer and a Medicaid eligibility worker rather than assuming the cap applies.

Learn More

Find personalized help understanding the Vermont Medicaid Personal Needs Allowance 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.