By Michael Shemtoub, trial attorney, Beverly Law. Updated November 2026.
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How Medicaid’s share of the cost works
For most residents on Medicaid, federal rules tell the state to reduce what it pays the nursing home by the resident’s income left after certain deductions. The deductions come in a set order (42 C.F.R. 435.725):
- A personal needs allowance for clothing and other personal needs, reasonable in amount and at least $30 a month for an aged, blind or disabled person
- An allowance for a spouse at home
- An allowance for other family members at home
- Health care costs not paid by a third party, such as Medicare and other health insurance premiums
Whatever is left is the resident’s share. In practice the resident, or whoever manages the money, pays that share to the facility each month, and Medicaid pays the rest. The nursing home is collecting a payment the Medicaid rules assign to it. It does not get the whole check by right.
| State | Personal needs allowance | Law |
|---|---|---|
| California (Medi-Cal) | Not less than $35 a month for a person in a medical institution or nursing facility, and the department may raise it by regulation. The rest of income is set under federal rules, with allowances such as upkeep of the home and support of a spouse or children. | Welf. & Inst. Code 14005.12 |
| Texas (Medicaid) | Not less than $75 a month for a resident of a nursing facility or similar long-term care facility who receives medical assistance. The state may send it directly to a resident who receives SSI. | Human Resources Code 32.024(w) |
| Washington (Apple Health) | Set by rule and adjusted each year since January 1, 2024 by the Social Security cost-of-living percentage. The amount for most nursing facility residents is published on a Health Care Authority chart. DSHS calls the resident’s share “client responsibility.” | WAC 182-513-1105, DSHS 22-619 |
If Medicare is paying for a short skilled stay, the rules are different. Our page on whether Medicare pays for nursing home care explains what Medicare covers and what the resident pays.
When the nursing home is the representative payee
Social Security can name a representative payee to receive benefits for a person who cannot manage them. SSA’s guidance for payees says benefits go first to the beneficiary’s current needs, such as food, clothing, shelter, medical care and personal comfort items (SSA). For a beneficiary in an institution, SSA tells payees to:
- Set aside a reasonable share for the institution’s usual charges
- Keep at least $30 a month for personal needs
- Use the full $30 SSI benefit for personal needs when Medicaid pays more than half the cost of care
- Keep records of every payment received and how it was spent or saved, and give SSA an accounting when asked
SSA also says a payee may not use the beneficiary’s money for the payee’s own expenses (SSA). Its general number is 1-800-772-1213.
The resident’s money held by the facility
Federal rules for Medicare and Medicaid nursing homes protect a resident’s own funds (42 C.F.R. 483.10(f)(10)):
- The resident has the right to manage their own financial affairs.
- The facility must not require a resident to deposit personal funds with it.
- Funds the facility holds above $100, or above $50 for a resident whose care Medicaid funds, go in an interest-bearing account, with the interest credited to the resident.
- The resident gets quarterly statements and can see the records on request.
- A Medicaid resident must be told when the account reaches $200 less than the SSI resource limit, because going over can affect eligibility.
- After discharge or death, the facility must convey the funds and a final accounting within 30 days.
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When taking the money is financial abuse
Residents also have the right to be free from misappropriation of their property and from exploitation (42 C.F.R. 483.12). Each state also defines financial abuse.
| State | Definition | Law |
|---|---|---|
| California | Financial abuse includes taking, secreting, appropriating, obtaining or retaining an elder’s property for a wrongful use or with intent to defraud, or by undue influence. A use is wrongful when the person knew or should have known it was likely to be harmful. | Welf. & Inst. Code 15610.30 |
| Texas | Exploitation is the illegal or improper use of an elderly person’s or a person with a disability’s resources for monetary or personal gain without informed consent, by a caretaker, family member or other person with an ongoing relationship. | Human Resources Code 48.002 |
| Washington | Financial exploitation is the illegal or improper use, control over or withholding of a vulnerable adult’s property, income, resources or trust funds, including misuse of a power of attorney, trust or guardianship. A vulnerable adult financially exploited while living in a facility can sue for actual damages, costs and a reasonable attorneys’ fee. | RCW 74.34.020, RCW 74.34.200 |
Texas cases are handled by the firm’s Texas-licensed attorneys, Joyce Ondich and John Efstathiou.
What this means for your case
Ask the facility for the resident’s trust account statements and the Medicaid notice that sets the monthly share. Compare the two. If the facility is collecting more than the share, holding a deceased resident’s funds past 30 days, or if a family member or payee is spending the check on themselves, report it; our page on how to report nursing home abuse lists the state agencies, and questions or problems with a payee can go to Social Security at 1-800-772-1213. Questions about the family home belong on our page about whether a nursing home can take your house. For injury claims against a facility, see our nursing home abuse section.
Common questions
Does the nursing home get my mother's whole Social Security check?
Generally no. With Medicaid, the facility receives the resident’s share of cost, which is the income left after the personal needs allowance and other allowed deductions.
How much does a Medicaid resident get to keep in Texas?
Texas law sets the personal needs allowance at not less than $75 a month for nursing facility residents who receive Medicaid.
What is the personal needs allowance in California?
California law sets it at not less than $35 a month for a person in a nursing facility, and the state may raise it by regulation.
Can the nursing home become my father's representative payee?
Social Security can appoint a payee for a beneficiary who cannot manage benefits. Any payee must use the money for the beneficiary’s needs and keep records.
What happens to money in the resident's account after death?
Federal rules require the facility to convey the funds and a final accounting within 30 days to the person handling the estate. Beverly Law offers a free case review in English or Spanish at (310) 552-6959. You owe no fees or costs unless we win. Find more answers in our injury law FAQs.
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Related pages
Sources
- 42 C.F.R. 435.725 (post-eligibility treatment of income, institutionalized individuals) (ecfr.gov)
- Cal. Welfare and Institutions Code 14005.12 (leginfo.legislature.ca.gov)
- Tex. Human Resources Code ch. 32 (32.024(w)) (statutes.capitol.texas.gov)
- WAC 182-513-1105 (app.leg.wa.gov)
- Washington DSHS, Apple Health (Medicaid) and Long-Term Services and Supports for Adults (DSHS 22-619) (dshs.wa.gov)
- Social Security Administration, FAQs for Representative Payees (ssa.gov)
- 42 C.F.R. 483.10 (resident rights, financial affairs) (law.cornell.edu)
- 42 C.F.R. 483.12 (freedom from misappropriation of property and exploitation) (law.cornell.edu)
- Cal. Welfare and Institutions Code 15610.30 (leginfo.legislature.ca.gov)
- Tex. Human Resources Code ch. 48 (48.002) (statutes.capitol.texas.gov)
- RCW 74.34.020 (app.leg.wa.gov)
- RCW 74.34.200 (app.leg.wa.gov)
Important: This page is general information, not legal or medical advice, and reading it does not create an attorney-client relationship. Every case is different; talk to a lawyer about yours. Texas cases are handled by the firm’s Texas-licensed attorneys, Joyce Ondich and John Efstathiou. Last reviewed: November 7, 2026.