Questions & Answers

My father-in-law is in a nursing home in our small community. Of course he gets social security and a pension. He has had his former employer to take out taxes (federal) since his retirement. The nursing home gets all his money(around $2,430), and Medicaid picks up the balance. Medicaid is now telling my husband (POA), that his dad will have to not have the money every month taken out for taxes, because they want it. We have asked them why, and they tell us Dad doesn't have to pay taxes because he is in a nursing home. Well the federal government is telling us he does have to pay taxes. What can we do?

I would be very surprised if your father-in-law still must taxes now that he is in a nursing home since his contribution of his income to the nursing home should be treated as a deductible health care cost. So there should be no reason to continue to have the taxes deducted from the pension. The Indiana Medicaid agency accordingly included all of the income in determining what must be paid to the nursing home. To check on this you could consult with a local accountant or elder law attorney.