8144 Spousal Impoverishment Provisions - Under federal law, a married couple is allowed to protect a portion or all of their combined nonexempt resources and income when either the husband or wife requires care in a medical institution for at least 30 consecutive days, including situations in which the institutionalized spouse dies prior to the 30th day in the institution. As a result such protected resources and income would not be considered in determining the medical eligibility of the institutionalized spouse. The law also provides for income to be protected for dependent family members and for the consideration of only the institutionalized spouse's own income in determining his or her eligibility beginning with the first month of institutionalization.
The following policies are only applicable in those instances in which one spouse lives in the community (including HCBS arrangements) and the other spouse resides in a medical institution. They do not apply to single individuals or to married couples where both members enter an institution or remain in the community. The resource provisions apply whether or not the facility the husband or wife enters is Medicaid approved. The income provisions apply only where the facility is Medicaid approved. In addition, the income provisions are not applicable to persons in adult care homes whose financial eligibility is determined based on the spenddown provisions of 8172.2 (2)(b).
Length of institutionalization must be at least 30 consecutive days, except in situations in which the institutionalized spouse dies prior to the 30th day. Verification of the length of stay is required. If the length of care will not exceed the month the care begins and the two following months, these provisions would not be applied based on using the temporary stay policy referenced in 8113 unless beneficial to the client for eligibility purposes, or the institutionalized spouse dies prior to the 30th day in the institution.
8144.1 Spousal Resource Provisions - The following provisions are applicable to the consideration of the couple's resources. The methods outlined to determine the community spouse resource allowance apply regardless of any other division of marital property. No adjustments will be made in the amount of the community spouse resource allowance, including divisions made through prenuptial and postnuptial agreements or court orders, unless it is ordered through the fair hearing process. A fair hearing officer may grant an increase to the community spouse resource allowance as outlined in 1619.
NOTE: The initial resource test provisions of 8141 shall apply in determining the eligibility of the institutionalized spouse if he or she entered the institution on or after September 30, 1989. If the institutional arrangement began prior to September 30, 1989, the provisions of 8142 (1) are applicable.
Community Spouse Resource Allowance - Based on the total combined nonexempt resources owned by the couple in the month of application, the community spouse resource allowance shall be the greater of:
$21,912 or
1/2 of the value of the couple's nonexempt resources
owned at the time the spouse first entered an institutional arrangement
which began on or after September 30, 1989, not to exceed $109,560.
Assessment
Process - In order to determine the community spouse allowance,
an assessment of the resources owned by the couple (either singly
or jointly) at the time the Institutionalized spouse first entered
long term care must be made. Resources which would have been counted
at that time are to be considered regardless of their status at the
time of application. If the total resources varied within this month,
the highest value obtained during that month shall be used.
The Resource Assessment and Allowance Determination
Form
(ES-3162) shall be used for this purpose. Either spouse can request
such an assessment be made without a formal application for assistance.
If the assessment is done without an application for assistance, the
couple shall be informed of the outcome of the assessment including
the total nonexempt resources which were considered and the community
spouse's share of those resources based on the determination described
above. A copy of the assessment form is also to be provided to the
couple. The original is to be retained in the case file for use in
determining eligibility at the time a formal application is filed.
The couple does not have the right to a fair hearing concerning the
assessment until the time a formal application is filed.
If an application is not taken at the time of assessment,
a "pseudo" application shall be registered in KAECSES to
track the resource determination. The normal registration process
would be used including the client's name, date of birth, and SSN.
In addition, the case should be assigned to the MS program. Upon completion
of the assessment and notification to the couple, the application
shall be denied using a denial code of "AO" (Assessment
Only). No formal denial notice would be sent. However, if the assessment
shows there to be eligibility for the institutionalized spouse based
on the community spouse resource allowance, a formal application shall
be taken and processed at that time.
If the individual has been in and out of an institutional
arrangement since September 30, 1989, the first month of entrance
which began after that date shall be used for assessment purposes.
If the individual first entered a hospital and then goes directly
into an adult care home, the month he or she first entered the hospital
shall be used since the institutional arrangement has been continuous.
Only nonexempt resources are to be considered. This would include such
things as checking and savings accounts, land or buildings other than
an exempted home, and life insurance with a face value of more than
$1,500. Thus, any resources that are counted toward the allowable
resource limits must be considered. (See 5000.)
Exempted resources, such as the home and one automobile, would not
be considered in determining the community spouse resource allowance.
NOTE: The special treatment of resources contained
in an available trust (5330 and 5430) does not apply to the assessment process.
Trust resources shall be considered exempt or countable based on the
non-trust treatment of assets. Therefore, a residence or primary vehicle
contained in an available trust would be an exempt resource in determining
the Community Spouse Resource Allowance. Those same trust assets would
still be countable when determining the amount of resources available
to the couple in the eligibility process.
The couple will need to provide any necessary evidence
to document the amount of resources owned at the time the applicant/recipient
began long term care as well as those currently owned if an application
is being made and a period of time has elapsed since the start of
long term care.
The $21,912/$109,560 allowance limits are subject to
change annually based on increases in the federal consumer price index
(CPI). Any increase in standards will only affect those who apply
or request an assessment on or after the effective date of the increase.
Implementation
of the Resource Allowance and Transfer Provisions - Once
the assessment process is completed, the amount of the community spouse
resource allowance is then determined based on the parameters of item
(1) above. This amount is then compared to the current total nonexempt
resources of the couple to determine the amount of resources which
can be protected.
If, based on the community spouse resource allowance,
the institutionalized spouse is otherwise eligible, the couple must
then transfer sufficient resources to the community spouse to equal
the allowance if the combined resources are mostly jointly owned between
the husband and wife or primarily owned solely by the institutionalized
spouse. If such transfer does not occur, the resources will be considered
for all months following the month of application based on ownership.
If such transfer will occur and the institutionalized
spouse will be otherwise eligible based on the transfer, the husband
and/or wife must sign a Notice of Intent to Transfer Resources (See
Appendix.)
The couple then has 90 days from the date the intent notice is filed
to transfer the necessary resources to the community spouse. If there
is no immediate eligibility, such notice is not required and the couple
can pursue the necessary transfers prior to reapplying.
If the spouse in long term care is unable to help carry
out the transfer or give his or her consent to the transfer because
of disability, a period of up to one year is allowed for the community
spouse to carry out the transfer. The spouse must seek court action
(through conservatorship or other methodology) to gain authority to
do so on behalf of the institutionalized spouse during this period.
Documentation of this would be required.
The 90 day/1 year time periods referred to above can
be further extended for good cause. Potential good cause reasons would
include legal impediments which may prohibit liquidation of some property
or extenuating circumstances beyond the control of either or both
spouses that delay transfer activity such as an unexpected illness
or hospitalization or untimely cooperation by a necessary third party
(joint property owner, life insurance company, etc.). In such instances,
the couple or spouse must continue to try to overcome these obstacles
and present evidence of their attempts. The transfer period can then
be extended for as long as necessary to complete the division. In
such instances in which the transfer was not completed due to a legal
impediment on a piece of property, once the impediment is overcome
and the property becomes available, such property would then be subject
to transfer pursuant to the determined community spouse resource allowance.
In order to transfer resources, the couple may be required
to take such action as setting up separate savings accounts, changing
ownership on titles and deeds, or liquidating property and dividing
the proceeds. It is important that the spouses transfer resources
in such a way that the resulting ownership interest of each spouse
in the resources is clearly designated and separately identifiable.
Once the property has been divided into separate shares, either spouse
may have their name placed on the resource of the other for convenience
purposes if their access to the property is limited to acting as an
agent for the other spouse.
Documentation of how the transfer was carried out and
any subsequent changes must be included in the case file. In addition,
staff are to refer all cases in which a resource transfer under these
provisions has occurred to Central Office Legal Division. This shall
be accomplished by sending a memorandum which indicates the type of
transfer and how it was or will be accomplished. (See Appendix.)
This information is to be sent at the time of case approval for new
applicants or at the time the intent notice is returned for current
recipients. Legal Division will then serve as a central clearinghouse
for all spousal impoverishment activity and information.
Effect
of Transfer Period on Eligibility - Resources owned solely
by the community spouse should not be considered available to the
institutionalized spouse beginning in the month following the month
the institutionalized spouse is determined to be initially eligible
(including prior eligibility). Resources to be transferred to the
community spouse in accordance with his or her resource allowance
shall be deemed to have been transferred during the 90 day/1 year
transfer period described above. Eligibility could then be approved
as early as the first month in the prior medical period if the institutionalized
spouse is otherwise eligible.
Case processing shall not be delayed because of the
permitted transfer period as long as sufficient evidence is presented
to determine that the transfer will result in eligibility. If the
transfer will not result in eligibility because the client still has
excess resources, eligibility must be denied and the record of the
assessment and community spouse resource allowance will need to be
retained in the case file for future application purposes. Such denial
action can be taken immediately. The couple may then either complete
the necessary transfers or wait until the institutionalized spouse's
share is closer to the resource level for eligibility.
For clients who are presumed eligible during the transfer period, if the couple does not follow through with the transfer within that period and does not have good cause for further extending the period, the case shall be closed as soon as possible giving timely and adequate notice. Payments made on behalf of the client up to that time shall not be regarded as overpayments. The case can be reopened if the couple later completes the transfer and provides all necessary information. However, the client would not be presumed eligible again and eligibility could be re-established beginning in the month the transfer is completed.
8144.2 Spousal Income Provisions - The following provisions are applicable to the consideration of the couple's income when one member enters a Medicaid approved facility.
Community
Spouse Income Allowance - Based on the total nonexempt
income of the couple, the community spouse allowance shall be determined
as follows:
If their combined total nonexempt
gross income (or adjusted1,822 or less, per the income can be
made totally available to the community spouse.
If the combined total nonexempt
gross income (or adjusted gross for the self-employed) is more
than $1,822 per month, income sufficient enough to bring the spouse's
gross income up to1,822 per month can be made available. The $1,822
protected income level can be increased to a maximum of $2,739
per month if there are excess shelter expenses as defined below.
The budgeting methodologies described in 7100
shall be used to compute the income of both spouses. For self-employment,
the adjusted gross income shall be computed in accordance with
7122.
If the applicant's/recipient's spouse has excess shelter expenses,
the amount of the allowance can be increased such that the spouse
has up to $2,739 per month. Excess shelter expenses are defined
in the law as the amount by which the spouse's monthly expense
for rent or mortgage payment, including principal, interest, taxes,
and insurance (or in the case of a condominium or cooperative,
monthly maintenance charges) when added to the food assistance
standard utility allowance (SUA) exceeds 30% of the previously
mentioned $1,822 division cap (i.e., $547). In instances in which
utilities are included in the rental payment, the full rental
payment shall still be used in computing the excess shelter allowance.
Only the spouse's principal place of residence can be used to
compute this allowance.
As the standard utility allowance is $334/month,
the amount of the excess shelter allowance would equal the amount
by which the spouse's shelter payment exceeds $213/month. This
allowance would be added to the base $1,822 allocation amount
and, therefore, increase the amount of income the spouse would
receive. The amount of the excess shelter allowance cannot exceed
$917/month for a total allocation cap of $2,739 ($1,822 base and
$917 excess shelter). Thus, if the spouse's shelter payment equals
or exceeds $1130/month, all that can be provided for excess shelter
is $917. Any payment greater than $213 but less than $1130 would
produce a varying allowance.
Only nonexempt income is to be considered in determining
the allowance. This would include such income as Social Security,
VA (other than aid and attendance benefits or amounts attributable
to unusual medical expenses), or Railroad Retirement benefits,
wages, income from investments, and other private retirements
benefits. It would not include such income as SSI benefits, bona
fide loans (not used for current living expenses), and tax refunds.
Exempted income is not to be considered in determining the total
income.
The amount of the community spouse allowance will
vary based on changes in either spouse's income and changes in
shelter expenses (including a change in the food assistance standard
utility allowance). In addition, as with the community spouse
resource maximum levels, the $2,739 maximum income standard will
be adjusted annually based on the percentage increase in the federal
consumer price index (CPI).
The amount of the allowance shall be reviewed and,
if necessary, adjusted at the time of the annual review and cost
of living increases. The client and/or his or her spouse must
still report any changes in their income or shelter expenses within
10 calendar days of the change and the amount of the allowance
would then need to be adjusted at the time of the reported change.
NOTE:
If a court order has been entered against an institutionalized
spouse for the support of the community spouse, the community
spouse income allowance shall not be less than the monthly amount
of the court order, even if it exceeds the $2,739 cap. In addition,
if a fair hearings officer has ruled that additional income is
needed by the community spouse in instances of financial duress
as referenced in 1619, the allowance
shall equal that amount.
Dependent
Family Member Allowance - Each dependent family member
who lives with the community spouse can receive $608 per month of
the income of the institutionalized spouse as long as that member's
gross monthly income does not exceed the minimum community spouse
income allowance standard referenced in item 1 above. If the income
is in excess of this standard, no income allowance can be provided
to that member.
NOTE:
For children under age 18 who do not live with a community spouse
or where there is no community spouse, the allocation policy of 8143 (4) is applicable.
A family member is defined as a child, parent, or brother
or sister of either spouse. Dependency may be of any kind (e.g., legal,
financial, medical, etc.). The spouse's or dependent member's allegation
shall be accepted without challenge unless there is a reason to question
it.
The income of the family member to be considered for purposes of determining eligibility for the dependent family member allowance shall be based on the same guidelines as referenced for the community spouse income allowance. The income of a legally responsible person would not be considered in this determination, only the member's own income. As the amount of the allowance is based on a percentage of the minimum community spouse income allowance standard, it will be subject to change at the time of an increase in that minimum allowance amount. The dependent family member allowance is subject to termination if the member's income changes and exceeds the minimum community spouse income allowance standard.
The family member's income shall be reviewed at the
time of the annual review. The client and/or family member is responsible
for reporting any change in the member's income within 10 calendar
days of the change if it exceeds the above-mentioned minimum income
allowance standard.
Implementation
of Allowances and Effect on Eligibility - The community
spouse and dependent family member allowances are to be computed at
the time of application or at the time the care arrangement begins
for ongoing recipients by using the Income Allowance Determination
Form in the Forms
Section. The full permitted allowances are to be computed on this
form even though the income of the institutionalized person may be
insufficient to provide the full amounts. A copy of the form is to
be provided to the client at the time of approval. Documentation of
both spouse's income as well as the income of any dependent family
member for whom an allowance will be provided is needed.
It is not a requirement that an allowance be provided
to either the spouse and/or family members. The institutionalized
spouse has the choice to provide the full maximum allowance, a smaller
portion of it, or nothing at all. For example, if the community spouse
and/or dependent family members are also applying for or receiving
assistance, an income allowance could adversely impact their eligibility
and the institutionalized spouse may then want to provide nothing
or an amount smaller than the maximum.
If the income allowances will be made to the community
spouse and/or family member, one or both members of the couple are
to sign a Notice of Intent to Allocate Income. Upon receipt of this
notice and approval of the case, the allowances shall be presumed
to be made each month beginning with the month of application or the
month in which the care arrangement begins for ongoing recipients.
They would not be applied retroactively to any prior month. The allowances
shall be deducted from the client's income each month in determining
his or her obligation. The amount of the allowances shall continue
to be deducted unless there are reported changes in income and/or
shelter expenses which would alter or terminate the allowance or a
change in the allowance limits caused by a CPI increase. The deducted
amount shall also be adjusted if it becomes known that the computed
allowances are not being made fully available. The case file is to
be documented regarding any change.
Staff are to refer all cases in which an income allowance has occurred to Central Office Legal Division. This shall be accomplished by sending a memorandum which indicates the type of allowance and how it was or will be accomplished. (See Appendix.) This information is to be sent at the time of case approval for new applicants or at the time the intent notice is returned for current recipients. SRS Legal Division will then serve as a central clearinghouse for all spousal impoverishment activity and information.