NJ Medicaid and Court Ordered Alimony Video
I was recently asked if I knew of any statutory or other persuasive authority supporting the allowance of court-ordered spousal support (alimony) as a deduction from the income of a Medicaid beneficiary. Some attorneys believe (wrongly) that since the IRS generally treats alimony as income to the recipient spouse, this can be an exception. Here is some IRS guidance on tax treatment of alimony: https://www.irs.gov/taxtopics/tc452
Medicaid starts with total gross income, and only permits certain explicit exclusions. Alimony/spousal support is not one of those exclusions.
There is a statute, 42 USC 1396r-5(d)(5), (5) Court ordered support which reads:
If a court has entered an order against an institutionalized spouse for monthly income for the support of the community spouse, the community spouse monthly income allowance for the spouse shall be not less than the amount of the monthly income so ordered.
Unfortunately, this statute has been decided to apply only to support awarded as part of the Medicaid process, and not to a pre-existing spousal support order, so for all practical purposes, the community spouse will lose his/her alimony payments once Medicaid is approved.
To discuss your NJ Medicaid matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at fniemann@hnlawfirm.com. Please ask us about our video conferencing or telephone consultations if you are unable to come to our office.
By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold Township, Monmouth County, NJ Medicaid Attorney