(THE FEDERAL SPOUSAL IMPOVERISHMENT PROVISIONS)

The spousal impoverishment provisions of the Medicaid program permit a husband and wife to protect a portion or all of their combined income and resources when one of them requires long term care in an institutional or home-and community-based services setting. The amount protected is intended for the use of the person who remains at home. At the same time, these provisions help the spouse needing long term medical care to qualify for Medicaid benefits which can help in paying for that care.

In regards to resources, the amount of the couple's nonexempt resources owned which can be protected is the greater of:

• $20,880 or
• 1/2 of the value of the couple's nonexempt resources owned at the time the husband or wife first entered long term care, not to exceed $104,400.

Only nonexempt resources are considered. This would include such things as checking and savings accounts and land or buildings other than an exempted home. The protected resources must usually be transferred to the spouse in the community and are not considered in determining the eligibility of the person in long term care.

The $20,880/$104,400 allowance limits are subject to change annually due to increases in the federal consumer price index.

In regards to income, the amount of the couple's combined income which can be protected is either:

• Up to $1,750 per month, or
• Up to $2,610 per month if there are excess shelter expenses.

In addition, up to $584 per month can be protected for each dependent family member who lives with the spouse who remains at home. A dependent family member is defined as a minor or adult child, a parent, or a brother or sister of either the husband or wife who has been dependent on the couple because of legal, financial, or medical reasons.

Only nonexempt income is considered. This includes income from such sources as Social Security, Veterans, Railroad Retirement benefits, wages, income from investments, and other public or private retirement or disability benefits. The protected income must be allocated each month to the spouse in the community and any dependent family members. The amount of this income is then exempted from consideration in determining the liability of the person in long term care for his or her cost of care.

EXAMPLE

Application is taken on a 67 year old man who just entered a nursing home. He receives $1200/month in Social Security benefits and his wife, who remains at home, receives $750/month Social Security. The couple jointly owns a home, car, $50,000 C.D., and a checking account with a $200 balance.

Resource Determination

The home and car are not counted. The remaining countable resources equal $50,200 (C.D. and checking account). One-half of this equals $25,100, this amount is protected. The couple's total resources must be reduced to $27,100 ($25,100 + $2000) before he is eligible. The couple would likely put the protected amount in her name only.

Income Determination

Once the husband becomes resource eligible, an income allowance would be determined. Of the couple's total income at least $1,750/month can be protected for the wife. As there are no excess shelter expenses, the husband would allocate sufficient income $1000 (1750 - 750 = 1000 ) to bring her income up to $1,750 per month. The remainder of his income $200 (1200 - 1000 = 200), would be budgeted toward his nursing home care.

Related Information on the KS Dept. On Aging Website:

Frequently Asked Questions: Division of Assets on Spousal Impoverishment

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