by Anita Schnee, Attorney at Law
As part of the coronavirus recovery effort, most Americans are getting direct payments from the federal government known as “stimulus checks.” This money is paid to ease the pain of the Covid pandemic and to jump-start the economy.
The stimulus money should have arrived in the same way that Social Security payments or tax refunds are made, either direct-deposited into a bank account or mailed as a paper check. If the money has not arrived, or for guidance in general, consult the IRS web-page, or call 800-919-9835 or 800-829-1040, or visit your local Taxpayer Assistance Center.
Those who are receiving means-tied government assistance, like SSI, VA benefits, or Medicaid to pay for long-term care, need not worry that stimulus money will be counted against them for eligibility. As long as recipients spend the money within twelve months, the money will not push them over the maximum amount they are permitted before they are penalized.
Recipients may use the money to buy new clothing, cell phones or televisions, toiletries, snacks, dental treatment, or improved quality of medical supplies. They may buy an irrevocable funeral trust, to avoid future expense to family members. The money might pay for updating estate-planning documents, or for consulting a geriatric care manager. (Some commentators believe that the money could even be given away to family or charities. While this may be OK under federal law, it’s probably best not to take chances with how our State may interpret the law. Spend the money, don’t donate it.)
As long as the money is not spent on what could be called an asset or an investment – like, for example, rare coins or stocks or bonds – the money will not be counted against the asset limit for Medicaid eligibility. And, again, the money must be spent within twelve months. It must not be forgotten-about or left unnoticed in a bank account.
It also must not be misappropriated by nursing homes or assisted-living facilities. If this has happened to you or your loved one, inform the facility manager that the money must be refunded to the resident. Cite the law that carves out the payment from being counted toward federally assisted programs like Medicaid: 26 U.S. Code § 6409.
Or, show them a downloadable handout from the Congressional Research Service.
If the facility will not refund the money, contact your state’s attorney general. Then lodge a complaint with the Federal Trade Commission.
Recipients of assistance, like anyone else, are free to spend their stimulus money. The money is theirs. It is tax-free. It is intended to be spent, and it should be spent, in ways the recipient would like (subject to the conditions above).
