A Spend Down:
What is a Spend Down?
For an individual receiving Supplemental Security Income (SSI) and/or Medicaid, a “Spend Down” literally refers to spending excess money that he/she receives within a calendar month to maintain eligibility for public benefits. This is allowable because SSI determines a lump sum of money to be considered income only in the month received if it is spent within that same calendar month (SI 01110.600). In most states, that means that on the last day of the same calendar month that the funds were received the recipient can have not a penny more than the resource limit, which is generally $2,000 for an unmarried individual and $3,000 for a married couple. For example, if John Doe, an unmarried individual, is on SSI and receives $28,000 dollars on September 12th, he must spend down his total resources to $2,000 dollars before October 1st.
What Can a Recipient Spend Their Funds On?
The Social Security Administration (SSA) defines household goods items that are the beneficiary’s personal property that is found in or near the beneficiary’s home and is used regularly. The Social Security Administration does not count household goods as resource to the individual (and spouse) if items full under their definition of household goods.
Medi-Cal (California's Medicaid Program) is a means-tested program or also known as needs-based. Meaning, that there are certain income, asset/resource requirements to qualify to be eligible for Medi-Cal.
Excluded Resources are assets that are not included or counted when the Social Security Administration (SSA) determines a beneficiary’s eligibility for Supplemental Security Income (SSI). Keep in mind, a beneficiary’s individual assets cannot exceed the $2,000 limit $3,000 for a couples. With exempt resources, some items or assets are allowed to be possessed by the beneficiary without being counted in the $2,000 asset limit.
William E. Lindahl, MBA, CLPF