Residents of long-term care facilities who have Medicaid have received or will receive $1,200 from the IRS. For most people, the stimulus money will be (or has been) electronically deposited into their checking accounts or that of their representative payees. The nursing facility serves as rep payee for many of these residents. There has been a bit of confusion about what to do with the money. A resident who receives Medicaid usually has to pay most of his or her income to the facility as cost sharing. I've heard that some facilities attempted to collect this money or have advised the resident to spend it down to maintain eligibility. This is incorrect. 

The stimulus payments are meant to help recipients and to boost the economy during the pandemic. They are not taxable income to anyone. And they are not counted as income to those enrolled in Medicaid. So they are not included in the cost-sharing calculation. The money is also not a countable resource for Medicaid eligibility for one year after receipt. So the money can be deposited into a resident trust account or a regular checking account regardless of the current balance. The owners of the accounts have  one year to spend the balance to below the $2,000 resource limit. They can spend it on anything that they need or desire for themselves - clothes, meals, electronics, furniture, entertainment, medical expenses that are not covered by insurance etc. They should not pay it to the nursing facility (unless they owe a past-due balance). They also may not give it away or use it to purchase gifts for others.