NJ bill would leave nursing home residents’ monthly personal allowance at $50

The measure would provide annual cost-of-living increases but falls far short of the $140 per month residents and advocates sought.

An Assembly committee will consider a bill Monday that would keep New Jersey’s personal needs allowance for Medicaid recipients living in nursing homes and other institutions at its current rate of $50 a month while providing annual cost-of-living increases.

The pleas of nursing home residents and their advocates for a more substantial increase appear to have fallen on deaf ears. Residents and advocates told lawmakers in May that $50 is not enough to pay for basic personal expenses in one of the most expensive states in the country. They also noted that the allowance has failed to keep pace with inflation.

Assembly Bill 5440 is scheduled for consideration by the Assembly Health Infrastructure Committee at 10 a.m. Monday in Committee Room 14 on the fourth floor of the State House Annex in Trenton. The public can also watch the meeting on the New Jersey Legislature’s website.

The allowance is the only discretionary money available to Medicaid recipients living in long-term care facilities. Residents must contribute nearly all of their Social Security benefits, pensions, and other income toward the cost of their care. They are allowed to keep the personal needs allowance for expenses the facility does not cover.

Those expenses can include clothing, shoes, socks, undergarments, coats, toiletries, haircuts, telephone service, postage, electronic devices, snacks, books, hobbies, and occasional outings.

Nursing home residents who testified before another Assembly committee in May said that nursing homes often provide only basic or low-quality toiletries. Some residents said the soap, shampoo, and lotion supplied by facilities irritated their skin, meaning they must buy their own products using the $50 allowance.

Others said they must pay for their own clothing, internet access, private telephone service, envelopes, stamps, tablets, and computers. At $50 a month, even an inexpensive haircut or telephone bill can consume a large chunk of the allowance.

Residents who do not have relatives able to help them must go without. Those who do have family support may have to ask relatives to buy basic necessities, even when those family members are managing their own housing, food, transportation, medical, and education expenses.

About 28,000 New Jersey nursing home residents receive Medicaid, which covers about two-thirds of the state’s nursing home residents.

Advocates had rallied behind separate legislation that would increase the allowance from $50 to $140 a month. The Assembly Aging and Human Services Committee voted unanimously to advance the bill in May, with lawmakers from both parties expressing support for giving residents more money to meet their personal needs.

The increase would help residents maintain some measure of dignity, independence, and personal identity, advocates said. They argued that people who spent decades working should not have to depend on relatives or charitable donations to buy a new pair of shoes, make a telephone call, or get a haircut after entering a nursing home.

Instead, Assembly Bill 5440 would write the existing $50 allowance into state law. The current statutory amounts are as low as $25 or $35, depending on the resident’s benefits and the type of facility they are in. In the fiscal year 2026 state budget, the allowance was increased to $50, but that rate has not been permanently incorporated into the law.

The bill would apply the $50 allowance to eligible residents of nursing homes, state and county psychiatric hospitals, state developmental centers, residential health care facilities, and certain rooming and boarding houses.

Beginning Jan. 1 of the year after the bill is enacted, the allowance would increase annually by the percentage change in the regional Consumer Price Index. The calculation would use an average of the federal indexes for the New York-Northern New Jersey-Long Island and Philadelphia-Wilmington-Trenton regions.

Although the inflation provision would prevent the allowance from remaining frozen in future years, the increases would begin with the existing $50 rate rather than the $140 residents and advocates sought. A 3% annual increase, for example, would add only $1.50 to the monthly allowance in the first year.

The bill would also formalize the allowance for residents who receive Supplemental Security Income, a federal program for older people and people with disabilities who have little or no income. The federal government provides those residents with up to $30 a month for personal expenses. New Jersey currently adds $20, bringing their total allowance to $50. Under the bill, the state would continue supplementing the federal benefit and ensure that the combined allowance increases annually with inflation.

Under Medicaid rules, the allowance is excluded when officials determine how much of an institutionalized resident’s income must go toward the cost of care. Medicaid pays the remainder of the eligible cost.

The bill was introduced last Thursday by Assembly members Sterley Stanley, Carol Murphy, and Shanique Speight, all Democrats. Stanley chairs the Assembly Health Infrastructure Committee.