When applying for ALTCS benefits, applicants are often told they need to “spend down” before they will be considered eligible. What does this mean? For a single applicant, their assets must be below $2,000 to be eligible. For the married applicant, the rules are very different but the spend down could be as much as half of the marital assets. The question we get asked frequently is “Spend Down on What?”.
Remember the rules are there to make sure the applicant spends their money on THEIR needs. The applicant can not give the money away, change the ownership of the asset or try to hide the asset. The rules exist for a reason and are clear on the intent. Spending down money on what the state considers exemptions is fine; prepaid funeral plans, house, car and care needs the applicant might have. Paying for care is always allowable. Personal items needed, clothing, depends, over the counter medications…we have even heard of folks spending down on a new television. The tip to remember is you can not give your money away. Spend down can be complicated because in some situations, you may be told that you need to spend down a certain amount but after careful legal review, it may be that you do not. Legal fees are an allowable expense…getting good legal advice before you proceed with the application might just end up being the best option before you “spend down”.