There are several figures of interest to seniors and their families
for 2012. 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
2011 or will change in 2012 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, 2012, the Maximum Spousal Resource Standard
increased to $113,640. The Minimum Spousal Resource Standard increased
to $22,728 on January 1, 2012.
The MMMNA has a minimum allowance amount and a maximum allowance
amount. The MMMNA for 2011 was $1,837.75, effective July 1, 2011, and
this amount will remain as the minimum allowance for the first half of
2012. The maximum maintenance needs allowance was $2,739 in 2011, and
this amount will remain the same for the first half of 2012. The
community spouse excess Shelter Standard for 2011 was $551.63, and this
amount will remain the same for the first half of 2012. The utility
standard deduction (SNAP) changed from 2010 to 2011. For 1 to 3
household members, the utility standard deduction decreased from $303
per month to $274 per month effective October 1, 2011, and the utility
standard deduction decreased from $382 per month to $345 per month for 4
or more household members. The Medicaid minimum home equity limit will
be $535,000, and the maximum will be $786,000.
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 2012 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 of age or less,
the maximum deduction is $350; for those more than 40 years of age to 50
years of age, it is $660; for those more than 50 years of age to 60
years of age, it is $1,310; for those more than 60 years of age to 70
years of age, it is $3,500; and for those over 70 years of age, it is
$4,370. 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 be a cost of living increase
for 2012. The estimated average monthly Social Security benefit payable
in 2012 will remain $1,229. The maximum taxable earnings will increase
to $110,000, and the maximum Social Security benefit will remain $2,513
per month. The Supplemental Security Income (SSI) federal payment
standard will increase in 2012, and it will increase to $698 per month
for an individual and $1,048 per month for a couple. Most Medicare Part B
enrollees will see an increase in their Part B premium payments. The
basic premium will be $99.90 per month, and the maximum Part B premium
will be $319.70 per month (individuals with annual incomes of $214,000
or more and married couples with annual incomes of $428,000 or more).
Premiums for other individuals will be between the minimum and maximum
and will be determined based on annual income for 2012.
The attorneys at Oast & Hook can assist families with their
estate, financial, insurance, long-term care, veterans' benefits, and
special needs planning issues.
Sandra Smith is an elder law attorney with Oast & Hook, and
she practices in the areas of 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
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