Section 1. There is hereby established within the department of public welfare a program of emergency aid for elderly and disabled residents of the commonwealth found by the department to be eligible for such aid, pursuant to regulations promulgated by said department and subject to appropriation. In promulgating, amending, or rescinding its eligibility regulations from time to time, the department may take into account the amounts available to it for expenditure under this chapter. The department shall by regulation provide that an applicant or recipient who lives with one or more family members who receives assistance pursuant to chapter one hundred and eighteen and who is legally obligated to support such family member shall receive assistance, pursuant to this chapter, which, when combined with the assistance being received by the family member of the applicant or recipient pursuant to chapter one hundred and eighteen, does not exceed the assistance available under chapter one hundred and eighteen to an assistance unit of the same household size as the applicant or recipient and such family member.

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Any person (i) who is eligible for assistance under the provisions of this chapter, (ii) who is not maintaining his or her own home, and (iii) who is receiving care in a licensed nursing home, a licensed chronic hospital, a licensed rest home or an approved public medical institution, shall retain the first sixty dollars of monthly income for clothing, personal needs allowance, and leisure time activities. If there is no such income, or if such income is less than sixty dollars, the recipient shall be paid the difference between such income and sixty dollars.