Montana Personal Needs Allowance: What a Nursing Home Resident Keeps

The $50 Rule

When a parent enters a nursing home on Medicaid, nearly all of their monthly income — Social Security, pension, any other payments — goes directly to the facility as their "patient liability" or contribution to the cost of care. Montana allows the resident to keep exactly $50 per month as a Personal Needs Allowance (PNA).

That $50 covers everything Medicaid doesn't pay for: toiletries, personal clothing, haircuts, phone service, reading materials, holiday gifts, and any other personal expenses. It's not much, and it hasn't kept pace with actual costs.

Where the Rest of the Income Goes

The math works like this:

1. Start with total gross monthly income
2. Subtract the $50 PNA
3. Subtract any Medicare premiums (Part B, Part D, supplemental)
4. If married, subtract the spousal income allocation (bringing the community spouse up to the Minimum Monthly Maintenance Needs Allowance of $2,705–$4,066.50)
5. The remaining amount is the patient liability — paid directly to the facility each month

Medicaid covers the difference between the patient liability and the facility's actual daily rate.

Example: A parent receiving $1,800 per month in Social Security keeps $50. After a $175 Medicare Part B premium, the patient liability is $1,575. If the nursing home rate is $8,000 per month, Medicaid covers the remaining $6,425.

What the PNA Must Cover

The facility is required to provide room, board, nursing care, and basic medical supplies through the Medicaid rate. But the PNA covers personal items the facility doesn't:

• Shampoo, soap, deodorant, dental care products
• Clothing and shoes (including replacements)
• Haircuts and grooming services
• Phone and internet charges
• Magazines, books, newspapers
• Personal snacks and beverages beyond what the facility provides
• Gifts for family members
• Co-pays for non-covered medical services

Family members often supplement the PNA informally — buying toiletries, bringing clothes, paying the phone bill. This is allowed, but monetary gifts to the resident can complicate the Medicaid asset limit. The resident's total countable assets (including any unspent PNA that accumulates in a personal account) must stay under $2,000.

The Personal Fund Account

Nursing facilities are required to maintain a personal fund account for each Medicaid resident. The facility deposits the PNA into this account monthly and provides quarterly statements. The resident (or their guardian/representative) can withdraw from the account for personal expenses.

Watch the balance. If the account approaches $2,000, the resident risks exceeding the Medicaid asset limit — which can trigger a period of ineligibility. Families should monitor the quarterly statements and spend down any accumulation on allowable personal expenses before it hits the threshold.

If the resident dies with funds remaining in the personal account, request a final accounting and instructions for handling the balance through the estate.

Protecting the Community Spouse's Income

For married residents, the spousal income allocation is the most important deduction in the patient liability calculation. If the community spouse's own income falls below the MMMNA floor ($2,705 in 2026), a portion of the institutionalized spouse's income is redirected to bring them up to that level. Documented excess shelter costs (mortgage, property tax, insurance, utilities above $811.50) can push the protected amount up to $4,066.50.

This deduction reduces the patient liability dollar-for-dollar. A community spouse with $1,200 in personal income and documented excess shelter costs would receive a $2,867 monthly allocation from the institutionalized spouse's income ($4,067 maximum minus $1,200 own income). That's $2,867 less going to the facility — and $2,867 more keeping the community spouse financially viable.

Advocating for Your Parent

The $50 PNA is a floor, not a negotiated rate. Families can't increase it through the Medicaid application process. But tracking how the money is used and supplementing with in-kind support (buying toiletries, clothing, paying for phone service directly) ensures the parent's dignity without creating asset-limit problems.

The Montana Dementia & Memory Care Guide includes a patient liability worksheet and a community spouse income allocation calculator with the exact 2026 Montana thresholds.

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