Q. My wife and I are both on SSI and Medi-Cal and we just received $1,200 under the federal stimulus program, and hope to receive another round if Congress and the new administration approve more. Will these payments mess up our public benefits, which we depend upon?

A. The short answer is “No”. Some background may be helpful:  As you may know, the basic Medi-Cal and Supplemental Security Income (“SSI”) rules are  that both income and assets are considered in terms of eligibility. If the stimulus payments were considered income, they would potentially undermine that eligibility or at least increase the Medi-Cal recipient’s Co-Pay (“Share of Cost”) for health care services. Also, since the value of countable assets of recipients on SSI and/or Medi-Cal must be under the permissible resource ceilings, there was also concern that these stimulus payments would put many over these ceilings and result in their termination from these vital public benefit programs.

Because of these concerns, immediately after the last round of stimulus payments in April, 2020, the Commissioner of Social Security issued an important statement  which recited, in part, as follows:

“Please note that we will not consider economic impact payments as income for SSI recipients, and the payments are excluded from resources for 12 months”. [Emphasis added]

Because federal public benefits law provides that state Medicaid (Medi-CAL) programs cannot impose eligibility requirements that are stricter than SSI requirements, the Commissioner’s pronouncement of favorable treatment for the SSI program essentially resulted in the extension of the same treatment to the Medi-Cal program. Thus, the stimulus payments will not count as income, nor will they count as resources for at least 12 months after receipt. This should give you and your wife some measure of comfort.

In accord with federal law, the Medi-Cal folks in Sacramento then issued a statewide directive to all counties further clarifying this matter, essentially affirming the Secretary’s statement of ‘no effect’. While they have not yet issued another statewide directive with regard to the last round of stimulus payments a few weeks ago, my contacts at the Department of Health Care Services in Sacramento assure me that the same treatment will apply, again, and that a further written directive to that effect will issue soon.

There is one caution, however: if the stimulus payments are saved, and not spent within the 12 month grace period, then they will thereafter count as resources, and that circumstance could then undermine a beneficiary’s ongoing eligibility.  However, if the stimulus payments are spent in the interim, or used to purchase exempt resources (e.g. funeral plan, clothing, automobile, home repair, etc.), then there would be no adverse effect even after that 12 month grace period.

Further, these stimulus payments will not be counted as income for purposes of the various subsidies available to qualify for health insurance under plans available through Covered California. However, Pandemic Unemployment Benefits will count.  See the resource listed below for further detail.

Lastly, for folks reading this article, please do not confuse economic stimulus payments with unemployment assistance payments. The latter will count as income in the month received, and if not spent in the month of receipt will count as an asset as of the next following month. So be careful to distinguish these subsidies.

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For readers wishing more information, please see the resources listed below, along with hyper-links to the articles:

References:  Medi-Cal ‘All County Welfare Directors’ Letter’, ACWDL 20-09 (04/27/2020);

Treatment of Stimulus Payments by Covered California; Treatment by IRS;

Q & A’s prepared by Neighborhood Legal Services of LA County;

Statement by Commissioner of Social Security (04/03/2020);

Health Affairs Blog entitled “Coverage Provisions in the 2021 Appropriations & COVID 19 Stimulus Package”, (01/04/2021);

Nursing Home Residents, Medicaid, and Stimulus Checks: What You Need to Know, by National Center on Law & Elder Rights (“NCLER”);

Summary prepared by the Social Security Administration (5/14/2020), “Economic Impact Payments for Social Security and SSI Recipients—Steps to Take and Schedule of Payments”