Virginia Medicaid Personal Needs Allowance (2026): What You Keep

If your loved one lives in a Virginia nursing home on Medicaid, they keep a Personal Needs Allowance of $40 a month for their own use.1 The Virginia Medicaid Personal Needs Allowance is the small slice of monthly income that stays with the resident instead of going to the facility.

In This Guide

• What Is the Virginia Medicaid Personal Needs Allowance?
• Virginia Medicaid Personal Needs Allowance vs. the Federal Floor
• How the Money Is Held: The Resident Trust Fund
• Where the Allowance Fits in Your Patient Pay
• What the Facility Must Provide Without Touching Your Allowance
• Veterans and the VA Pension Rule
• Frequently Asked Questions
• Learn More

What Is the Virginia Medicaid Personal Needs Allowance?

When someone qualifies for Medicaid to cover nursing-facility care, they no longer pay the home out of pocket the way a private-pay resident does. Instead, Medicaid pays the facility, and the resident contributes nearly all of their own monthly income toward the cost of that care. That contribution is called the patient pay, or patient liability, and for most residents it swallows almost the entire Social Security or pension check.

Federal law does not let it swallow everything. Every resident gets to keep a small, protected amount each month for the ordinary expenses of daily life, things Medicaid and the facility don't cover: a salon visit beyond routine hair care, clothing, snacks, stamps and greeting cards, a phone plan, a magazine subscription, a small gift for a grandchild.5 That protected amount is the Personal Needs Allowance. It is deducted from the resident's income before the patient pay is figured, so it never reaches the facility at all.

Who gets it? Any resident whose long-term care is paid by Virginia Medicaid in a nursing facility. The program in Virginia is Cardinal Care, run by the Virginia Department of Medical Assistance Services (DMAS), with applications taken at the local Department of Social Services.1 The allowance isn't something a family applies for separately, it's built into the way DMAS calculates what a resident owes the facility each month.

Without this rule, a resident's entire income would go to the nursing home, and they would have nothing of their own, no way to buy a birthday card, replace a worn pair of shoes, or pay for a haircut the facility doesn't provide. The allowance is modest, but it protects a person's ability to make small choices about their own life.

Virginia Medicaid Personal Needs Allowance vs. the Federal Floor

Here's how Virginia's figure compares to the national minimum. Federal law sets a floor, not a fixed amount: under 42 U.S.C. 1396a(q), a state must let an institutionalized individual keep at least $30 per month, and at least $60 a month for an institutionalized couple if both spouses are aged, blind, or disabled and their incomes are considered available to each other.2 That $30 figure has not moved since the Omnibus Budget Reconciliation Act of 1987 set it, effective July 1988.

States are free to set their allowance higher than the floor, and Virginia sits just above it. A single aged, blind, or disabled resident in a Virginia nursing facility keeps $40 per month, and a couple with both spouses in a facility keep $60 per month between them.1 Virginia's figure is written into the state's administrative code at 12VAC30-40-20, the rule that governs how income is treated after eligibility is established. That rule writes the line as $40 "plus" for residents with greater need, so $40 isn't always the whole allowance. A resident who pays guardianship fees keeps the actual cost of those fees, up to 5% of gross income, on top of the $40. A patient in an institutional work program that's part of treatment keeps the first $75 of earnings plus half the rest, up to $190 a month.1

So Virginia's basic allowance clears the federal minimum by ten dollars for an individual. It's a small margin, and it's worth being realistic with families about what $40 stretches to in 2026. It covers the essentials the facility doesn't, but it isn't meant to fund anything large. That's part of why the resident trust fund rules below matter so much, an unspent balance can quietly build up and create its own problem.1

How the Money Is Held: The Resident Trust Fund

Once the allowance is set aside from a resident's income, the money has to live somewhere. A nursing facility can hold it in what's called a resident trust fund, a personal-funds account the facility manages on the resident's behalf. Federal rules at 42 CFR 483.10(f)(10) govern how that has to work, and they are strict, because the money belongs entirely to the resident.

Here's what to know. First, the facility cannot require a resident to deposit personal funds with it, a resident has the right to manage their own money, and can keep it in a personal bank account if they prefer.3 If the resident chooses to deposit funds with the facility and authorizes it in writing, the facility becomes a fiduciary and has to follow a set of protections:3

• Any balance over $50 for a Medicaid resident must be kept in an interest-bearing account, separate from the facility's own operating accounts, and the interest belongs to the resident.3
• The facility must keep a full, separate accounting with no commingling of resident funds and facility funds.
• It must give the resident a statement of the account every quarter, and make the record available on request.
• It must warn a Medicaid resident when the account comes within $200 of the SSI resource limit for one person, and explain that crossing that limit, counting other nonexempt resources, can cost Medicaid or SSI eligibility.3
• It must secure the funds with a surety bond or another assurance acceptable to the federal government.
• When a resident is discharged, evicted, or dies, the facility has 30 days to turn over the balance and a final accounting, to the resident or, after a death, to whoever is handling the estate.3

For a family, the practical takeaway is simple: you are entitled to see this account. Ask for the quarterly statement, keep it, and reconcile it against what you know the resident actually bought. Any charge you can't explain is worth a question, because these accounts are exactly where mishandling shows up.3

Where the Allowance Fits in Your Patient Pay

To see why the allowance matters in dollars, it helps to walk through how Virginia figures a resident's monthly patient pay. The state starts with the resident's gross income, then subtracts a series of protected amounts before whatever is left goes to the facility. The Personal Needs Allowance is the first of those deductions.

In rough order, DMAS takes the resident's gross monthly income and subtracts:

1. The $40 Personal Needs Allowance, plus guardian fees (up to 5% of gross income) for a resident who pays them.1
2. An income allowance for a spouse still living in the community, if there is one, under Virginia's spousal impoverishment rules.1

What remains after those deductions is the patient pay, the amount the resident owes the facility each month. Medicaid covers the rest of the bill.

Those two are the deductions Virginia's post-eligibility rules set out by amount for a nursing-facility resident. A particular case can carry others, and whether a given expense comes off the top, a Medicare Part B or Medigap premium, for instance, is not something to assume in either direction. The notice DMAS sends when it sets the patient pay itemizes every deduction it applied, so read that notice against the resident's actual income and ask the caseworker about anything that isn't on it.

The community-spouse piece can shift a large amount of income. When one spouse enters a facility and the other stays home, Virginia lets the at-home spouse keep a monthly income allowance so they aren't left destitute. The calculation starts from the Minimum Monthly Maintenance Needs Allowance of $2,705.00 a month (effective July 1, 2026), which an excess shelter allowance can raise. The eligibility worker's figure can't go above $4,066.50 a month, but that's the worker's ceiling, not the family's: a DMAS Hearing Officer may raise the allowance when exceptional circumstances cause extreme financial duress.6,1 If you're working through a married couple's numbers, our Virginia spousal impoverishment guide covers that calculation in full.

One more point that trips families up: for nursing-facility coverage, Virginia's main income test is 300 percent of the federal Supplemental Security Income (SSI) benefit rate, a cap of $2,982 per month in 2026. Virginia is also a medically needy state, so an applicant whose income sits above that cap can still qualify for nursing-facility care by spending down to Virginia's medically needy income limit, a much lower figure that is set separately for three locality groups.1 The Personal Needs Allowance sits downstream of all of this: it's what the resident keeps no matter how the rest of the math shakes out.

What the Facility Must Provide Without Touching Your Allowance

A common worry is that the facility will nickel-and-dime the resident's $40 for things that should be included in care.1 Federal law draws a clear line here, and it's worth knowing where that line falls.

Under 42 CFR 483.10(f)(11)(i), a whole category of routine items and services is already covered by the daily rate Medicare or Medicaid pays the facility, and during a covered stay the facility may not charge the resident for them. Federal law also bars a facility from charging a resident's personal funds for anything Medicaid or Medicare pays for, so none of these can come out of the allowance.5 The covered categories are:

• Nursing services
• Food and nutrition services
• An activities program
• Room and bed maintenance
• Routine personal hygiene items and services, including comb, brush, bath soap, razor and shaving cream, toothbrush, toothpaste and dental floss, denture adhesive and cleaner, deodorant, moisturizing lotion, tissues, towels and washcloths, incontinence care and supplies, over-the-counter drugs, hair and nail hygiene services, bathing assistance, and basic personal laundry
• Medically related social services
• Hospice care the resident has elected, when Medicare or Medicaid pays for it

The $40 is meant for what falls outside that list: grooming beyond what Medicaid covers, a phone, personal clothing, reading matter, gifts, outings beyond the activities program. Even then, the facility may charge the resident's funds for an item like that only if the resident asked for it, it isn't needed to meet the care plan, and the facility said up front there would be a charge. If a facility bills the resident's trust fund for something in the covered list, that breaks a rule written into both the federal regulation at 42 CFR 483.10(f)(11) and the statute at 42 U.S.C. 1396r(c)(6)(D), so a family raising it isn't guessing.5

Veterans and the VA Pension Rule

Veterans have a special rule worth understanding, because it changes both the size of the pension check and where that money is allowed to go. It applies to the VA pension, the monthly benefit for wartime veterans whose income and net worth fall within limits Congress sets.7 It's a separate award from VA disability compensation, and VA won't pay both on the same person's own service at once.8

Here's how it works. 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 care, the VA pension is reduced to $90 per month for any period after the month of admission. That sounds like a cut, and it is. VA's own regulation, 38 CFR 3.551(i), instead counts from the month after Medicaid payments begin, and those can be different months when Medicaid is approved late, so confirm with VA when the reduction starts. A veteran isn't made to repay pension VA paid above $90 because it failed to reduce it in time, unless the veteran willfully hid the information VA needed.4 Another paragraph of the statute, 38 U.S.C. 5503(d)(3), adds one protection alongside the cap: 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.4 Read it carefully, because it is a rule about what Medicaid pays the home, not a rule about what ends up in the resident's hands.

There is also a limit on the cap that turns on the building rather than on the veteran. 38 U.S.C. 5503(d)(1)(B) defines the nursing facility the cap covers as one described in 42 U.S.C. 1396r, other than a state home for which the VA makes per diem payments for nursing home care. A single, childless veteran whose Medicaid-covered care is in a state veterans home receiving those VA per diem payments falls outside the $90 cap, and the cap should not be applied to that stay.4 If your family member lives in a state veterans home, ask its business office whether the VA pays a per diem for their nursing home care before you plan around $90.

Neither provision addresses how the capped pension lines up with a state's Personal Needs Allowance. That interaction is set by state post-eligibility rules, and states answer it differently: in some, the pension is kept alongside the state allowance; in others, it counts toward the personal-needs amount rather than adding to it. Virginia's answer is not something this guide can confirm, so plan around neither version. Ask the eligibility worker at your local Department of Social Services, or DMAS, how the capped pension is treated in the patient-pay calculation, and read the notice DMAS sends when it sets the patient pay, which itemizes what was deducted and what was counted as income.

The same $90 cap also reaches a surviving spouse with no child and a child entitled to pension in their own right.4 A veteran with a spouse or dependent child falls outside it, and the pension may be treated differently. A veteran in that situation should check with an accredited Veterans Service Officer and their Medicaid caseworker before assuming how the numbers will land.

Learn More

Find personalized help understanding Virginia 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.