Indiana Medicaid Personal Needs Allowance and Room and Board Rules

What the Personal Needs Allowance Covers

When a parent enters a nursing home or uses Medicaid waiver services in Indiana, they don't get to keep their Social Security check and pension for personal spending. Nearly all of their income goes toward the cost of care. The Personal Needs Allowance (PNA) is the small protected amount they're allowed to retain.

In Indiana, the PNA is $52 per month.

That $52 is meant to cover everything outside of room, board, and medical care — haircuts, phone bills, magazine subscriptions, toiletries beyond the basics the facility provides, clothing replacements, and any small personal purchases. Families commonly supplement this amount informally, but the $52 is what Medicaid legally protects from being consumed by care costs.

How Income Gets Allocated

When Medicaid covers nursing home care, the resident's income flows through a specific allocation order:

1. The Personal Needs Allowance ($52) comes off the top. This is the resident's money, period.
2. The Community Spouse Monthly Income Allowance (CSMIA) applies if the resident has a spouse living at home. If the at-home spouse's own income falls below the Minimum Monthly Maintenance Needs Allowance floor ($2,705 per month, effective July 2026), the resident can transfer enough income to bring the spouse up to that floor. The maximum spousal allowance — factoring in the Excess Shelter Standard of $811.50 for high housing costs — caps at $4,066.50 per month.
3. Incurred medical expenses not covered by Medicaid or Medicare, such as dental care, vision, or hearing aids.
4. Patient liability — everything remaining after the above deductions goes to the nursing facility as the resident's share of cost.

For residents whose income exceeds $2,982 per month (Indiana's Medicaid income cap), a Qualified Income Trust (Miller Trust) is required. Income above the cap is deposited into the trust, and the trust may disburse for the PNA, spousal allowance, medical expenses, and patient liability.

Room and Board Rules in Assisted Living

The room and board question is different — and more painful — in assisted living and memory care settings. Medicaid waivers in Indiana do not pay for room and board outside of nursing homes. In a participating assisted living facility, the state caps the allowable room and board charge at the maximum SSI rate ($994 per month in 2026) minus the $52 PNA, leaving $942 as the maximum room and board the facility can charge a Medicaid waiver participant.

The gap between that $942 and what the facility charges private-pay residents (often $3,000 to $6,000+) is why many assisted living communities limit how many Medicaid residents they accept, and why some don't participate in the waiver program at all. The math doesn't work for facilities whose cost structure is built around private-pay rates.

If your parent is in a memory care facility paying privately and their funds are running out, the transition planning needs to start well before the account hits zero. Options include transferring to a nursing home where Medicaid covers full costs, applying for FSSA's Assisted Living Reserve Capacity Procedure, effective July 1, 2025 (which provides priority waiver placement for residents who've been in a participating facility for 30+ days and have exhausted private funds), or exploring the RCAP program for facilities that participate.

Protecting the At-Home Spouse

The spousal impoverishment protections are designed to prevent the at-home spouse from becoming destitute. Two numbers matter most:

CSRA (Community Spouse Resource Allowance): The at-home spouse keeps between $32,532 and $162,660 of the couple's joint assets, calculated as half the total on the "snapshot date."

MMMNA (Minimum Monthly Maintenance Needs Allowance): The at-home spouse's income is entirely exempt. If their own income is below $2,705 per month, they receive a transfer from the institutionalized spouse's income before any patient liability is calculated.

The $52 PNA may seem like an afterthought next to these larger numbers, but it's the only income the nursing home resident keeps for themselves. Families should budget around it and understand that supplementing a parent's personal expenses is a common and expected part of the arrangement.

The Indiana Dementia & Memory Care Guide includes a Spousal Income Calculator that shows exactly how your parent's income will be allocated between the PNA, spousal transfer, and patient liability — so the at-home spouse can plan their budget before the transition happens.

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