2010 Elder Law Numbers

There are several figures of interest to seniors and their families for 2010.  They include long-term care spousal standards, annual gift tax exclusion rates, long-term care premium deductibility limits, and Social Security benefit changes.

The Center for Medicare and Medicaid Services (CMS) has announced changes to the long-term care spousal standards that apply to a community spouse.  A community spouse is a person who is not an inpatient in a medical institution or a nursing facility, but is married to a person who is an inpatient in a medical institution or a nursing facility (the institutionalized spouse).  The standards that changed in 2009 or will change in 2010 include, but are not limited to, the Maximum and Minimum Spousal Resource Standards and the Maximum Monthly Maintenance Needs Allowance (MMMNA).  

The Protected Resource Allowance (PRA) (often referred to as the Community Spouse Resource Allowance, but technically this is incorrect), is the amount of assets that the community spouse is allowed to retain when the institutionalized spouse is eligible for Medicaid.  The PRA is the greatest of either: (1) the Spousal Share (one-half of the total amount of joint countable assets as of the first day of continuous institutionalization for the institutionalized spouse), or (2) the Maximum Spousal Resource Standard at the time of application, or (3) the amount actually transferred to the community spouse as court-ordered spousal support, or (4) an amount determined at a hearing by the Department of Medical Assistance Services (DMAS).  The PRA can be no more than the Maximum Spousal Resource Standard and no less than the Minimum Spousal Resource Standard.  The Maximum and Minimum Spousal Resource Standards increase each year based on changes in the Consumer Price Index.  On January 1, 2009, the Maximum Spousal Resource Standard increased $109,560, and will remain the same for 2010.  The Minimum Spousal Resource Standard increased to $21,912 in 2009 and will remain the same for 2010.

The MMMNA has a minimum allowance amount and a maximum allowance amount.  The MMMNA for 2009 was $1,821.25, effective July 1, 2009, and this amount will remain as the minimum allowance for the first half of 2010.  The maximum maintenance needs allowance increased to $2,739 in 2009, and this amount will remain the same for the first half of 2010.  The community spouse excess Shelter Standard for 2009 was $546.38, and this amount will remain the same for the first half of 2010.  The utility standard deduction (SNAP) changed from 2008 to 2009.  For 1 to 3 household members, the utility standard deduction decreased from $290 per month to $141 per month effective October 1, 2009, and the utility standard deduction increased from $365 per month to $381 per month for 4 or more household members.

The annual gift tax exclusion will remain at $13,000.  This exclusion is the amount that a taxpayer can give to another individual without filing a gift tax return.  The IRS established limitations for 2009 and future tax years for the deductibility of long-term care insurance premiums from federal taxes.  Premium amounts above the limits are not considered to be a medical expense.  For those 40 years or age or less, the maximum deduction is $320; for those more than 40 years of age to 50 years of age, it is $600; for those more than 50 years of age to 60 years of age, it is $1,190; for those more than 60 years of age to 70 years of age, it is $3,180, and for those over 70 years of age, it is $3,960.  In Virginia, premiums that are not deductible on the federal income tax return can be taken as a deduction on the Virginia state income tax return.

For those on Social Security, there will not be a cost of living increase for 2010.  The estimated average monthly Social Security benefit payable in 2010 will remain $1,153.  The maximum taxable earnings will remain at $106,800, and the maximum Social Security benefit will remain $2,323 per month.  The Supplemental Security Income (SSI) federal payment standard will not increase in 2010, and it will remain at $674 per month for an individual and $1,011 per month for a couple.  Most Medicare Part B enrollees will see no increase in their Part B premium payments as a result of a "hold harmless" provision in the law.  Approximately 27% of beneficiaries are not subject to the hold-harmless provision because they are new enrollees during the year (3%), they are subject to the income-related additional premium amount (5%), or they do not have their Part B premiums withheld from Social Security benefit payments (19%), including those who qualify for both Medicare and Medicaid and have their Part B premiums paid on their behalf by Medicaid (17%).

Oast & Hook has been providing quality legal services in Southeastern Virginia and North Carolina for more than 80 years. The attorneys at Oast & Hook can assist clients with their estate, financial, insurance, long-term care, veterans' benefits and special needs planning issues. Visit their website at www.oasthook.com for more information.

Sandra Smith

Sandra L. Smith joined the firm in 2003. She practices primarily in the areas of elder law, estate planning, estate and trust administration, special needs planning, asset protection planning, long-term care planning and Veterans' benefits. Ms. Smith is certified as an Elder Law Attorney (CELA) by The National Elder Law Foundation (NELF).

In 2008, Ms. Smith was named as a Rising Star by Virginia Super Lawyers magazine. Rising Stars names the state's top up-and-coming attorneys.