Florida Medicaid Spend-Down: What You Are Allowed to Buy

Marjorie's Situation, in Plain Terms

Marjorie is 82, lives in Ormond Beach, and lost her husband a few years back. She has about $180,000 in savings, a home that's paid off, and a nursing home bill that just landed on the kitchen table. Her daughter Carol is doing what a lot of adult children do right now: staring at every withdrawal and wondering if writing a check for anything will get "counted against" her mother later. (Marjorie is a composite of the families I meet in this practice, not an actual client, but her numbers and her worries are typical.)

I've already written about the five-year lookback and how Medicaid eligibility works in general, so I won't repeat all of that here. This piece answers the one question Carol actually asked me: with $180,000 sitting in the bank, what can Marjorie spend it on without creating a penalty?

The short version is reassuring. Florida law does not require Marjorie to sit on her hands and watch her savings drain into a nursing home bill dollar for dollar with no other options. She is allowed to spend her own money on her own needs. The rule that matters is simple to state and easy to misapply: she can spend on herself, or on things and services worth what she pays for them, but she cannot give money away, even to people she loves.

The Spend-Down Categories That Are Genuinely Allowed

• Paying off legitimate debts. Marjorie can pay her own mortgage balance (though her home is paid off), credit card balances, car loan, medical bills, or personal loans. Money used to satisfy a real debt she owes is not a transfer to anyone else; it is simply resolving an obligation.
• Home repairs and accessibility upgrades. A new roof, plumbing or HVAC repairs, a walk-in tub, grab bars, a wheelchair ramp, or updated flooring all count as spending on her own homestead. These improvements also tend to protect the home's value for the family later, which is a nice side benefit, but the Medicaid purpose is that she is using her money for her own property and safety.
• A prepaid, irrevocable funeral plan. Funds placed into an irrevocable prepaid funeral contract are removed from her countable assets right away. This is one of the cleanest and most commonly used spend-down tools, and it also spares Carol a painful decision later.
• A car. Florida allows an applicant to own one vehicle of any value as an exempt asset. If Marjorie needs a newer, safer car, or wants to buy one outright, that purchase does not count against her.
• Medical equipment and personal medical needs. Hearing aids, glasses, dentures, a wheelchair or scooter, and similar items are legitimate purchases for her own health and comfort.
• Household goods and personal items. Furniture, appliances, clothing, and even things like a modest trip are generally treated as personal spending, not gifting, because she is the one receiving the benefit.
• Paying for care at fair value, including a properly documented caregiver agreement. If Carol or another family member actually provides caregiving services, Marjorie can pay for that care, but only if it is structured as a real agreement with a written contract, a reasonable hourly rate, and records of the hours worked. Paid-for care is different from paying a family member out of love with no paperwork behind it.

What Looks Like Spend-Down But Isn't

This is where Carol's fear usually comes from, and it's a fair fear, because the line between "spending" and "gifting" is exactly where families get tripped up.

• Outright gifts to Carol or grandchildren. Even a loving, well-intentioned check written to help a grandchild with tuition or a down payment is a transfer for less than fair value. Marjorie received nothing back in return, so Medicaid treats it as a gift subject to the lookback penalty.
• Selling the house, a car, or anything else below market value. If Marjorie sold her home to Carol for a token amount, or transferred her car for far less than it's worth, the difference between what she received and what the asset was actually worth is treated as an uncompensated transfer.
• Paying a family member for caregiving with no contract. This is the trap I see most often. Carol has been helping her mother for months, maybe driving her to appointments, cooking, managing medications. That care has real value, and Florida law does allow Marjorie to pay for it. But if there's no written caregiver agreement, no defined rate, and no record of hours, a payment from Marjorie to Carol looks exactly like an undocumented gift on a bank statement, and DCF has no way to tell the difference.
• Loans to family with no expectation of repayment. A "loan" that isn't documented with terms and a repayment schedule, and that never gets repaid, is functionally a gift in the eyes of Medicaid review.

What This Means for Marjorie's $180,000

If Marjorie needs a new roof, a safer car, updated flooring, hearing aids, and wants to prepay her funeral, all of that can come directly out of her $180,000 without penalty, because she is the one benefiting and she's paying fair value for what she gets. If Carol has genuinely been providing care, a properly drafted caregiver agreement can let Marjorie compensate her daughter for real work, documented in writing, going forward.

What Marjorie should not do is write Carol a check labeled "gift" or "help with bills," transfer her home to Carol for a dollar, or hand money to grandchildren, no matter how good the reason feels in the moment. Those transfers, discovered during the five-year lookback review, could delay the very Medicaid help the family is trying to access.

Sources

• Zoecklein Law, P.A., "Medicaid Spend Down Rules in Florida: What Counts & What Doesn't," July 26, 2026
• Elder Needs Law, "Florida Medicaid Spend Down Options Explained," May 9, 2026
• DeLoach, Hofstra & Cavonis, P.A., "Florida Nursing Home Medicaid Spend Down Planning," accessed 2026
• Florida Senate Legislative Database, Fla. Stat. § 409.904, effective May 1, 2003
• Elder Law, P.A., "The Medicaid Spend-Down in Florida: What It Means and How to Do It Strategically," July 31, 2026
• Absolute Law Group, "Medicaid Spend-Down Myths That Cost Florida Families," August 19, 2026

This article is for general informational purposes only and does not constitute legal advice, nor does reading it create an attorney-client relationship. Florida estate, elder, probate, and real estate law are fact-specific and change over time. Consult a licensed Florida attorney about your individual circumstances. Arthur Simpson, Esq. is licensed to practice law in the State of Florida. Attorney advertising.