Every year, the government establishes new numbers and thresholds as allowances for people who are elderly and receive benefits. For the first time in a couple years, the Social Security Administration has increased the amounts based on cost of living calculations for Social Security payments, and the Veterans’ Administration has done the same, increasing benefits that veterans receive on a monthly basis.
The average for a Social Security payment in 2012 will be approximately $1,229.00,and the maximum earnings increases to $110,000.00. Medicare Part D participants will have their Part B premium increased to $99.90 per month as the basic premium, with the maximum Part B premium being $319.70 if one’s income exceeds $214,000.00, or $428,000.00 if married.
The gift tax exclusion remains at $13,000 per donee per year, which is the amount that any person may gift another person, even if not a relative, without having to file a gift tax return. In addition, one may gift up to $5,120,000.00 over their lifetime and at death before any Federal estate or gift tax would be due. This amount is due to be reviewed before the end of 2012, so someone wishing to make a significant gift should consider making it in 2012.
If a single person needs long-term care in a facility on a permanent basis, then the amount they may retain continues to remain at $2,000.00. All other assets would have to be expended for that individual who needs care. In Massachusetts, a person who is on Medicaid is permitted to keep $72.80 per month, together with enough other income to cover any medical insurance premiums, with the balance of the funds being spent on their care.
If a person is married, and that person is living at home, (called a community spouse,) he or she is entitled to keep $113,640.00, but the institutionalized spouse may only keep $2,000.00. There is also a calculation for what is known as the minimum monthly maintenance needs allowance, which permits a person who is home and married to maintain $1,837.75 per month in income, which was effective on July 1, 2011 and will be reviewed again and possibly changed by July 1, 2012.
The maximum monthly maintenance needs allowance in 2012 also remains at $2,739.00 per month, which may also change on July 1, 2012. There are also additional allowances for standard shelter expenses and utility deductions that change on a yearly basis. These amounts decreased on October 1, 2011 and will probably be reviewed again on October 1, 2012.
It is important to know the numbers so an individual may make intelligent and informed decisions whan planning for their future, based on all income, including pensions, Social Security, veteran’s benefits, long-term care insurance, etc. Naturally, there are also additional allowances available when there is a special needs planning situation or other situations that permit the exceptions to apply. Good counsel should be obtained before making decisions to assure that the maximum benefits are obtained with the minimum of funds being available for long-term care.
Hyman G. Darling, Esq.
Photo credit: Microsoft
Good tips for seniors- the best thing to do would be to visit an attorney, however.
Posted by: Peck | July 20, 2013 at 04:48 PM