Nursing homes and assisted living facilities: Hands off residents’ stimulus checks

If you have clients who operate nursing homes or assisted living residences, a word of advice from you now can save them from making a serious misstep. We’ve heard that some facilities are requiring residents on Medicaid to sign over their stimulus payments to the facility. That contradicts the CARES Act, so you’ll be doing your clients a favor by cautioning them against that practice – and here’s why.

According to the CARES Act, those economic impact payments are considered tax credits and tax credits don’t count as “resources” for federal benefits programs like Medicaid. That means that nursing homes and assisted living facilities can’t take that money from residents simply because the resident is on Medicaid. Need some quick cites? Take a look at page 3 of the Congressional Research Services’ COVID-19 and Direct Payments to Individuals: Summary of the 2020 Recovery Rebates/Economic Impact Payments in the CARES Act and 26 U.S.C. § 6409 of the Internal Revenue Code.

This isn’t just an arcane hypothetical someone has dreamed up. The Iowa Attorney General’s Office and other State AGs have received boots-on the-ground reports this is happening.

If you learn that your clients have adopted this practice, encourage them to stop it immediately and give the money back to residents.

If you have a family member in a nursing home or assisted living facility, look into whether this has happened to them. If you spot this practice, tell your state attorney general’s office first and then report it to the FTC. And consider having a word with the facility’s management.