Will Medicaid count the gross rent or the net rent against my mother?

The Medicaid regulations in your state should explain how you can calculate the rental income that must be contributed to payment for your mother's care.

In my state (Massachusetts) the regulations explain that (C) Rental Income is reduced by allowable business expenses:
"(1) Allowable business expenses from rental income include carrying charges, cost of fuel and utilities provided to tenants, and any maintenance and repair costs."

Property taxes would be a carrying charge.

You would benefit by consulting an elder law attorney in your local area who can help you plan for continued eligibility, and the reporting requirements in your state.

net rents as shown on your schedule E Supplemental Income and Loss. BUT if the property is showing a loss, they expect you to sell it.

If and only if you are planning to return home you can have an allowance to maintain, the house, taxes, utilities, house payment and insurance. If you cannot return home after 12 months that allowance stops.
If the property is a rental, the net rent counts as income and is absorbed for care. Each state can set different rules regarding this. Check with your local Medicaid office or look on Medicaid.gov.
Good Luck.

you can have an allowance to maintain your home?

If you or those who read this are living in NYS, you might want to know about this program.
health.ny.gov/facilities/long_term_care/waiver/nhtd_manual/

What is allowed will be dependent on just how your state administers its Medicaid program. Each state does this uniquely.

Like for TX, they can keep their primary with homestead residence for the rest of their lifetime. When the initial Medicaid application is done, they can fill out a TX HHS/TXdads form H1280 -mandatory benefit optional benefits (really it has benefit twice!) to request for some of the required SOC for 6 months be waived to pay for mortgage & utilities (no phone).

For the H1280 to happen, it has to have supporting documentation as to the amount (like mortgage payment info & past utility bills); and it must be signed by owner AND their attending physician who has to certify they are anticipated to return home. Getting the MD who is the medical director of the NH to sign this could be totally problematic would be my guess. Property must be vacant. The way TX info on this reads is that any continuing costs like taxes, insurance, yard work, repairs are not included. Those costs all fall to family to pay. Only mortgage or rent & some utilities. Only 6 mos of waiver of part of SOC allowed.

For TX, if the house is kept, They will need to do a annual right of return statement along with the annual Medicaid renewal. The statement is usually sent to dpoa after the renewal & it's required documents (like tax assessor annual bill to show continued ownership) is mailed to state. I imagine caseworker looks at assessor document and cross references it via state database to see of all unchanged & verified, then sends out the right of return letter to the DPOA to sign off on.

For TX, if the house is empty, then the normal costs on the home (taxes, insurance, repairs, maintenance, utilities) paid by family on the behalf of the property owner is a deductible expense under TX Administrative Code from the Medicaid tally & MERP/MERS after death. Normal & usual costs, so roof repair is a yes but putting in a pool is a no. Plumbing repair is a yes but bathroom renovation is a no. If the house is kept - for whatever reason - it is centrally important to keep every receipt, contract, bill, etc on the house cost as you need it to offset MERP but also to possibly enter your own claims against the estate for probate if MERP won't provide an inital release of claim. All these costs come in to establish value of overall estate in probate. If the property is lower value to begin with (based on $ either by assessor value or valid appraisal), it could be there is no recoverable estate or not cost effective for recovery. If you do probate and MERP does not file a claim against the estate, the house can be transferred as per the will.

Keeping your parents home is like having a 2nd or 3rd home but without any guarantee of ownership so runs a risk and has costs for family to pay for the elders lifetime on the property and then for however long to settle probate & estate recovery. Renting the property is an option to consider.

What comes up on this site over & over, is that neither the Medicaid applicant or their DPOA or family are aware of the required co-pay or SOC of the elders monthly income to the NH. It comes as a surprise. Family at first is all "guvmint not gonna take maw's house", but in short order brother stops cutting the grass, Sissy won't pay house insurance, taxes are in arrears, etc. House gets sold with all proceeds going towards NH as they are now ineligible for Medicaid & family is usually out all those costs paid.

Really think hard with a solid idea on costs for possibly years & years IF keeping the property is feasible.

wonder if this explains why I've always heard that after 6 mos. in a nursing home, the house has to be sold; I'd never heard of being able to keep some money out of their income - SOC - to cover - what hopefully wouldn't be a mortgage but I know some still do - the mortgage and especially, maybe, utilities, which hopefully, wouldn't be much if they're not there but guess good idea to keep on at minimum at least to prevent damage to the house; guess that does give time to think in terms of the nh not being permanent, with hope of returning, but if I'm understanding, that can be extending if it's still thought that, even after that length of time, that they still might be able to eventually, or maybe at that point, in another 6 mos., return home? I wonder how often this actually happens, either that the possibility is real, or that, like I think you're trying to present, that the family is willing to continue to keep up the cost of maintaining the home, though not entirely sure re the guarantee of ownership; seems even if no will, the probate process would say how that would work, but of course guess the issue is the equality then of who's doing what vs the property being divided equally, or is it that if the nh resident never goes back home, that then the MERP recovery process possibly kicks in to get that money out of the house? so that nobody of the family is guaranteed to get that house after they've spent all that money on it? know have a friend who, though not sure if knew anything about any of this but pretty sure know didn't keep out any money to cover the expense of her mom's home after she put her in the nh, but anything that wouldn't have been allowed to be covered out of her check she wouldn't have - or been able to, although there are some other issues now - covered anyway, so it's already been let go because of the mortgage, which is another issue as well, isn't it, if there's a mortgage that doesn't get paid - wonder if MERP recovery thinks about that

Thank you for your input. The property is in a life estate with an end of life clause (as opposed to an occupancy clause). Currently the Medicaid formula has my mother contributing all but $80 of her retirement income (social security & annuity). Their are no liens against the property. We are working with the Dept. of Social Services in Virgina

The life estate covers a small farm and her home. The land is rented to a neighbor for less than the annual $2100 state Medicaid limit (retained assets) and reported to Social Services. The rent on the land almost covers the taxes, insurance, the utilities and fuel oil. Currently, I am paying the difference.

My brother, who will receive the house and 5 acres at my mother's death (I receive the remaining 25 acres), wants to rent the house. I am not totally opposed to renting if it is allowable especially since I am paying for what Mom cannot. My opposition is mostly due to the fact that I live the closest and I know who the tenants will be calling. And, that dealing with the proper handling of money and my brother never ends well.

When I met with the case worker, I asked if we could rent the house and turn over the net. The case worker said that it would put her over her income limit and disqualify her. She said there was no need to discuss the fact that I was more than willing to turn over any excess money after expenses were paid. I realize receiving the rent would initially put her over the $2100 limit but if she did not retain the excess, I thought they would be happy. SS answer was, "she would make too much". I was left to assume that SS was referring to her retirement income which is less than $24,000 a year. I also attribute the case worker's terse manner to the fact that my brother had called several times and was less than happy with the answers he received.

I scheduled this meeting with SS because my brother was getting ready to rent the house and I a suspect, pocket the money. I am pretty sure that would cause a Medicaid nightmare and might even be fraud. He had mentioned months ago that he thought we should consider renting. We had been told it was a paperwork nightmare that might not be worth the effort. I thought he met with SS and had all the details of "how" from SS. When I stopped by to check the house a few weeks ago, he was there showing the house. I then had a hint of his real plan. That is when I made an appointment with SS and discovered he had only made a few inquiries. The inquiries were such that the case worked had a ruling from the state office that "renting the house will put her over the limit".

I didn't know if I was phrasing my request to SS incorrectly or if I was missing something in the stack of paperwork that covers Medicaid. I speak "accounting" so I know I was phrasing my part correctly, but the case worker seemed to not want to speak at all.

I had spoken with an attorney in early spring when the "maintenance allowance" ended. That was when my brother wanted our mother to sign to change the life estate to an "occupancy" clause so he could take possession. This attorney was recommended by the attorney that actually drew up the life estate. My brother was not happy when the attorney said that changing the terms would reset the "look back". Then my brother asked about renting it. The attorney also said we could rent but he thought Medicaid would take all of the rent and we would have to apply and get approval to be reimbursed for any expenses out of future rents. He said it would be a paperwork nightmare.

I am not complaining about SS/Medicaid. My mother is happy where she is and unless she has a medical issue will live a good while. There is no way she could afford her care without it. My worry is that my brother will not let this go. He is still insisting that we rent the house for just the cost of the taxes and insurance "to help someone who needs a home out". He said he would have the tenants sign a lease saying what they were paying as rent so SS would be satisfied. That would mean we are renting a house for $150 a month that should rent for about $800-$1000 in our area. I am sure that means he would be getting a large sum of money under the table. I do not have proof but I don't think I need or want an admission of his plans on this. If there is a need for a repair, I would never get a dime from him. And, what will happen if they decide to stop paying him under the table? After all they have a lease for a lot less. It will be more than a can of worms that is opened, it will be a bucket full of rattlesnakes.

There is probably no solution but it helps to vent.

Bear in mind that she does not own the property, she just had life estate for living in the house. So the property owners collect the rents for and must fill out a schedule E on their tax return.
Now if you rent out the part she was living in, that is her income, and must be declared to Medicaid but only the NET rental, after expenses are paid. It might increase her share of cost, but I don't see how it could possibly put her over a limit, because nursing homes get about $12K a month.
Virginia regulation M0730.505 states:
"Net rental/boarder income from the rental of real property, or rooms, or
board paid when the applicant/recipient is not engaged in a business
enterprise or actively involved in management is unearned income.
Rental/room and board income is counted in the month in which it is
received."
Notice it said NET rental, not gross rents.

We have a similar situation; my mil's- if it is, pamstegma, based on your comment - according to what I'd read, they value and ownership is based on mil's age - property is also in a life estate, with no clause written into it, but been told that has nothing to do with occupancy, so is still valid even though she has remarried and moved off the property.

It covers 10 acres and the home. The home has been rented out but they've just served an eviction notice on the renter, which I'm assuming the rent has been covering the taxes, not sure if there's even been any insurance, with I'm assuming the renter covering the utilities.

The property has actually already been divided up among the heirs, with a daughter having gotten the house that's been being rented out. She's not the one who lives closest, however; that privilege belongs to another heir, who may partially be behind the eviction notice, plus she's also the POA, which might also have something to do with it, plus she also works in collections at the biggest credit union in the area, where probably the whole family does business (except me; I won't, at least as far as I can avoid it).

I don't believe mil has been getting any of the rent proceeds. Thanks, in that sense, to a change in rules, she's still been able to her fil's pension from his Civil Service job, even though she's remarried - otherwise, she probably wouldn't have and used to be she wouldn't have been able to continue to receive it - so, incomewise, not sure she'd ever be eligible for Medicaid, but not entirely sure re nh, since I understand the eligibility requirements for that are different than community. Not sure how much entirely the POA understands about nh requirements, or exactly what the thoughts are there but do know she and especially the one who has the home who's been renting it out have been discussing mil's deteriorating situation. At this point don't think she's been controlling the income, or how that would work if the began to feel that she needed to, because at this point, wouldn't that still be mil's decision? But to muddy the waters even more, all the rest of the property is also in life estate, including what's supposed to be ours.

I'm wondering if any of them even know anything about the whole Medicaid lookback period if she would even be eligible based on her income. But I'm also wondering how this would even all work with her, since we're not even talking about Social Security but the old Civil Service retirement plan.

Both of mil's sons work at the same installation where fil worked, but they both work for contractors, so are not under the same plan, so don't know if either one of them would even know who or how to contact the administrator of mil's plan.

Mil said early on she didn't even want the life estate, unless, possibly on the house, but she didn't want to talk to the attorney about changing it, and she certainly didn't want to pay to make the changes, and the POA didn't want any of that done, although she did talk to the attorney the credit union works with, who said the property couldn't be sold because of the life estate, but maybe that has something to do the Medicaid "lookback", that if she were to go on it they would want to be reimbursed but my understanding is that would only apply to her portion, since it's already been past the lookback period that the life estate was set up.

We're just not sure what would happen; a granddaughter-in-law has said she could come live with her, but now she's just found out that she's expecting so not sure what that does to those plans. Fil left her with money but we think it's gone now. Think it went to another granddaughter, who's wanting to move into the house, with her new husband and stepkids; had thought the renter that was there was supposed to have already been gone, but of course there's more to moving in than just the actual move, so not really sure how that's all going to be working out anyway. She'd already transferred the kids school to mil's house's school district, though. I'm somewhat concerned re all this false signing all these people are doing, between this and the IRS, both for this type thing and on a somewhat unrelated note, those that are still working and W-2's and 1099's. But, otoh, how is rent determined anyway? I don't guess I mind all the work we put in on the house for his mom after fil passed away but I do wonder if we would have done it had we known she wasn't going to stay there. But it is true that the one who's been renting it their son did move in after that and did a lot more work as well, but then he was living there for free, and she lived there as well with her first husband.

I'm just concerned about the whole situation but I guess maybe I don't need to be because I was told fil didn't even have a valid deed for the property we supposedly inherited anyway, so may just not even matter on our end.