Elder Law Center

One Essex Street

Saugus, Massachusetts 01906

Telephone 781.233.4444   Fax 781.231.2222

July 13, 2006

ROMNEY VETOES SENIOR RIGHTS

I spent last week up in the White Mountains of New Hampshire, golfing, kayaking and hanging out at the river, taking an occasional plunge to cool off. While I was gone there was much activity going on back here in Massachusetts. 

 First, on July 1, MassHealth issued it’s “emergency” regulations enacting the changes that were made in the Deficit Reduction Act that was signed into law by President Bush on February 8, 2006. Next, on July 9, Governor Romney vetoed Section 58 of the fiscal year 2007 budget, reducing the amount of money a married couple may keep if one of them needs nursing home care.

 The “Emergency” Regulations – I am in the process of reading the 26 pages of regulations that have changed and don’t have much good news. The look back period has been changed from 3 years to 5 years, the disqualification period for having made a gift doesn’t begin until you are in a nursing home and have less than $2,000, and eligibility will be affected by how much equity you have in your home. Next week I will go over the changes that affect your home and the following week will examine the severe changes relating to gifts made within five years of needing nursing home care.

The Veto – If your husband suddenly needed nursing home care, how much money would you need to be able to afford to stay in your home? $20,000? $30,000? Our kind and compassionate Governor feels that if you have more than $19,000, that’s too much! He thinks that if you have $40,000 or more, you should give him half of it.

 Our Senators and Representatives, as part of the fiscal year 2007 budget, voted to restore the Community Spouse Resource Allowance (CSRA) to the amount that you could keep prior to the change made in 2003.

WHAT IS THE CSRA? – The CSRA is the amount of money a married couple may keep if one of them needs nursing home care. Prior to January 1, 2003 we had a much better rule. It said that if one spouse needs nursing home care, they could keep about the first $90,000 of assets. This amount has been reduced drastically. In order to keep all of your assets you must have less than $19,000. If you have more than $19,000, you are entitled to keep one-half of your assets up to about $99,000. This maximum amount is adjusted each year for inflation.

IT’S NOT OVER – As a Little League coach, this has become a familiar chant heard when a team is losing a game. In a sense, we are now losing the game, but it’s not over. We are hoping to override the Governor’s veto as we did in 2003 when he vetoed the elimination of the expanded estate recovery.

In order to override this veto, the legislature will have to vote to override by July 31, the end of the current legislative session. Your help is needed.

Please contact your Representative and Senator immediately and ask them to contact the House and Senate leadership to override the veto of Section 58.

 WHY IS IT IMPORTANT? – Seniors face a never ending cost of living increase. Gas, oil, water, taxes… the list goes on, a difficult proposition when living on a fixed income. The idea that a married couple who has about $40,000 is considered to have too much money if one spouse needs nursing home care is upsetting to me.  The spouse remaining at home not only has to pay the normal and routine living expenses but also has to pay for many of the household chores that her husband used to take care of.

 The victims are seniors that can no longer afford to stay in their home. For seniors facing a negative monthly cash flow, it is only a matter of time until they can no longer afford to keep their home. Once this happens, some seniors end up entering nursing homes sooner, rather than later.

This article gives general information and not specific advice on individual matters. Persons wanting individualized advice on matters discussed should contact an advisor experienced in those matters. To the extent this article provides information on legal matters, it is based on law in effect in Massachusetts on the date of posting (laws in effect in other states are often quite different).

Ronald H. Surabian is a CPA and attorney who works at the Elder Law Center in Saugus, Massachusetts. He also holds Masters in accounting and a Masters in tax law. He currently serves on the board of directors of the Massachusetts Chapter of the National Academy of Elder Law Attorneys. If you have any questions please call me at the Elder Law Center, One Essex Street, Saugus, MA 01906 (781)233-4444. To view this or any prior article, please visit our web site at www.elderlawcenter.org

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