Spousal Impoverishment Rules in South Dakota
The Problem Spousal Protections Solve
When one spouse enters a nursing home and applies for Medicaid, the program's $2,000 asset limit could leave the at-home spouse with almost nothing to live on. Federal spousal impoverishment protections prevent this by letting the at-home spouse — the "community spouse" in Medicaid language — keep a defined share of the couple's combined assets and receive a portion of the institutionalized spouse's income if needed.
South Dakota applies these federal protections through two mechanisms: the Community Spouse Resource Allowance (CSRA) for assets and the Minimum Monthly Maintenance Needs Allowance (MMMNA) for income.
The Community Spouse Resource Allowance (CSRA)
On the "snapshot date" — the first day of a continuous 30-day period of institutionalization or HOPE waiver services — DSS evaluates all countable assets owned by both spouses combined, regardless of whose name is on the account.
South Dakota uses the "half-of-assets" formula. The community spouse keeps exactly half of the couple's total countable assets, subject to a floor of $32,532 and a ceiling of $162,660 in 2026.
How this works in practice:
- Couple has $200,000 in countable assets. Half is $100,000. That falls between the floor and ceiling, so the community spouse keeps $100,000. The institutionalized spouse has the remaining $100,000 and must spend down $98,000 to reach $2,000.
- Couple has $50,000 in countable assets. Half is $25,000. That's below the $32,532 floor, so the community spouse keeps the full $32,532. The institutionalized spouse has the remaining $17,468 and must spend down $15,468 to reach $2,000.
- Couple has $400,000 in countable assets. Half is $200,000. That exceeds the $162,660 ceiling, so the community spouse keeps $162,660. The institutionalized spouse has the remaining $237,340 and must spend down $235,340 to reach $2,000.
One planning wrinkle: South Dakota requires the CSRA calculation to be completed before applying any protections under the Long-Term Care Partnership Program. If the institutionalized spouse had a qualifying partnership insurance policy, the dollar-for-dollar asset protection from that policy gets stacked on top of the CSRA, maximizing total protection.
The Minimum Monthly Maintenance Needs Allowance (MMMNA)
The community spouse keeps all income in their own name — Social Security, pensions, investment income — under the "name-on-the-check" rule. But if their total monthly income falls below the MMMNA floor, they can receive an income diversion from the institutionalized spouse's income.
In 2026, the MMMNA floor is $2,705.00 per month (effective July 1, 2026 through June 30, 2027). If the community spouse's own income is $1,800 per month, they can receive a $905 diversion from the institutionalized spouse's income to reach the floor.
The MMMNA can be adjusted upward — to a maximum ceiling of $4,066.50 — if the community spouse demonstrates high shelter and utility costs. This "excess shelter cost" adjustment applies when housing costs (rent/mortgage, property taxes, homeowner's insurance, condominium fees, and a standard utility allowance) exceed a set threshold.
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The Snapshot Date Matters
The snapshot date locks in the total asset picture. Assets acquired or spent after the snapshot don't change the community spouse's protected share. This means the timing of the snapshot — typically the first day a spouse is in a facility for 30 consecutive days — determines how much the community spouse can keep.
Families sometimes don't realize the snapshot has occurred. If a parent was hospitalized for 10 days, then transferred to a skilled nursing facility for rehabilitative care, the 30-day clock started running at the hospital admission if the nursing facility stay began immediately after. The snapshot can happen before anyone has thought about Medicaid.
Income Diversion and Patient Liability
After the CSRA protects the community spouse's assets and the MMMNA protects their income, the institutionalized spouse's remaining income goes toward their "patient liability" — the amount they pay the nursing facility each month. The patient liability is gross income minus the $100 personal needs allowance (plus up to the first $75 of gross earned income), health insurance premiums, and any spousal income diversion.
The South Dakota Medicaid Long-Term Care & Asset Protection Guide includes a CSRA calculator worksheet, an MMMNA income diversion template, and a step-by-step guide for requesting the spousal resource assessment through Form DSS-EA-240.
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