Helping a family member pay rent

Last updated: September 22, 2020
medicaidplanner Staff asked 4 weeks ago

Can a Medicaid recipient receive help with rent payments from a family member or third party without that help counting as income as long as it is paid directly to the landlord?

1 Answers
medicaidplanner Staff answered 4 weeks ago

Yes, generally speaking, a Medicaid beneficiary can receive assistance with rent payments from a relative or a third party without it counting as income, given it is paid directly to the landlord.
 
On the other hand, if a family member or third party were to give money to the Medicaid recipient each month to pay his / her rent, this would likely count as income (unearned income to be exact). This is very important to mention since one of the requirements to maintain Medicaid eligibility is to have a limited monthly income. In most states, at the time of this writing, the income limit is $2,349 / month. (To see income limits by state and Medicaid program, click here). This “unearned income” would be calculated together with the Medicaid recipient’s other income. This, in effect, could cause a Medicaid recipient to have a monthly income over Medicaid’s limit and result in the loss of Medicaid benefits.
 
The information contained in this answer also applies to a Medicaid applicant in that the Medicaid agency would likely determine that money given directly to the individual for the purposes of paying his /her rent is unearned income. The “gift” could cause one to be denied Medicaid eligibility. Therefore, it is always better to pay the landlord directly if rent assistance is needed by a Medicaid applicant / beneficiary.
 
It is strongly advised that one contact a Medicaid planner for counsel prior to paying a Medicaid recipient’s / applicant’s rent (even if making payments directly to the landlord). The rules surrounding Medicaid tend to change fairly frequently and also vary based on the state in which one lives. Therefore, it is possible that not all states consider rent payments paid directly to the landlord similarly.

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