Nursing home residents on Medicaid are permitted to keep a small amount of their monthly income for personal spending. This is known as the Personal Needs Allowance.
When a person is on long-term care Medicaid and resides in a nursing home, their monthly income is paid to the nursing facility as a co-pay towards their cost of care. Countable income includes Social Security, SSDI, SSI, and pensions. There is a small exception for a monthly Medicaid personal needs allowance (PNA) that nursing home residents can spend on personal expenses that the nursing home does not provide. Examples of items and services that could be purchased include personal hygiene items, toothbrushes, toothpaste, other toiletries, haircuts, cell phone bills, and any other personal items that the nursing home does not provide. The PNA is designed to improve the resident’s quality of life. The Medicaid recipient must be careful not to save up too much of the PNA, because if they are over Medicaid’s asset limit, they could lose Medicaid eligibility.