The $1,200 stimulus payments sent to Medicaid recipients living in nursing homes belong to the recipients, not the nursing homes, according to a recent AARP story.

The same is true for such payments provided to Medicaid recipients in assisted living facilities.

Make no mistake: These facilities may ask Medicaid beneficiaries to hand over stimulus payments, the Federal Trade Commission warns.

If this happens to you or a loved one, first file a complaint with your state attorney general’s office, then with the FTC, the federal consumer-protection agency says.

Attorney Lois Greisman, the FTC’s elder justice coordinator, wrote a blog post on the topic on May 15.

“This is not just a horror story making the rounds,” she observed in the AARP story. “These are actual reports that our friends in the Iowa attorney general’s office have been getting — and handling. Other states have seen the same.”

She continued: “If a loved one lives in a nursing facility and you’re not sure what happened to their payment, talk with them soon. And consider having a chat with the facility’s management to make sure they know which side of the law to be on.”

The stimulus payments are being issued under the Coronavirus Aid, Relief and Economic Security (CARES) Act, an economic-relief law enacted in March in response to the coronavirus outbreak.

According to the law, nursing homes and assisted living facilities may not ask residents on Medicaid to sign over their paper checks or hand over money from bank accounts.

Some facilities claim that because a resident is on Medicaid, the stimulus payment is owed to the facility, Greisman wrote. The argument these facilities pose is that the stimulus payment is a “resource” that is required to be used to pay for services, but that’s not the case.

Technically, a stimulus payment is an advance on a 2020 tax credit, and tax law states that these credits don’t count as “resources” for federal benefit programs such as Medicaid, Greisman said.

“So: when Congress calls these payments ‘tax credits’ in the CARES Act, that means the government can’t seize them,” she explained.

She urged people to read the following to learn more.

Here is the pertinent provision of federal tax law.

Here is more from the Congressional Research Service.

Greisman said the National Center on Law and Elder Rights can provide more information to people who live in nursing homes or assisted living facilities. The center offers resources and tools to support older at-risk adults.