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.
The spousal impoverishment provisions contained in this section shall be applicable to all legally married couples, including common-law and same sex marriages. The marriage relationship exists until legally terminated. Separated and legally separated couples continue to be married and therefore may divide assets and allocate income.
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:
$24,180 or the
minimum allowance or on-half of the value of the couple’s nonexempt
resources owned at the time the spouse first entered an institutional
arrangement on or after September 30, 1989, not to exceed the maximum
allowance.
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 KEES 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. 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 $24,180/$120,900 allowance limits are subject to
change annually based on increases in the federal customer 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.
The resource standards in place at the time the assessment is actually
calculated shall be used.
The
M-2 (Notice of Intent to Transfer Resources) form shall be sent to
the applicant for completion and return prior to determination of
eligibility. The form
is designed to notify the applicant of the resource transfer process
and of his/her obligation to make the necessary transfer(s) upon notice
of approval. By
signing the form, the applicant agrees to make the transfer(s) based
on the agency determination. Either
spouse may sign the form, but both spouses are encouraged to sign. If
the applicant fails to return the completed form, the application
may be denied for failure to provide information.
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.
The
agency shall notify the individual of the outcome of the resource
assessment. By
earlier signing and returning the M-2 (Notice of Intent to Transfer
Resources) form, the individual has already agreed to make the necessary
transfer(s). The couple then has 90 days from the date of notification
of approval 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 KDHE-DHCF Policy. 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. KDHE-DHCF Policy 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 adjusted gross for the self-employed) is does not
exceed the monthly minimum community spouse income allowance
, 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 the monthly
minimum community spouse income allowance, income sufficient enough
to bring the spouse's gross income up to the monthly minimum allowance
can be made available. The minimum allowance can be increased
up to the monthly maximum community spouse income allowance 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 up to the monthly
maximum community spouse income allowance. 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 monthly minimum income allowance cap. 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.
Subtract
the food stamp assistance standard utility allowance (SUA) from
30% of the monthly minimum community spouse income allowance. This
amount is then subtracted from the allowable shelter expenses
to determine the amount of the excess shelter expense. The
excess shelter expense is added to the monthly minimum community
spouse income allowance to determine the new enhanced allowance,
not to exceed the monthly maximum community spouse income 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 monthly maximum income allowance
will be adjusted annually based on the percentage increase in
the federal customer 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 monthly maximum income allowance. 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.
The M-3 (Notice of Intent to Allocate Income) form shall be sent to the applicant for completion and return prior to determination of eligibility. The form is designed to inform the applicant of his/her allocation options. By signing the form the applicant agrees to the chosen allocation option. Either spouse may sign the form, but both spouses are encouraged to sign. This agreement shall be used to determine the amount of income allocation. If the applicant fails to return the completed form, eligibility shall be determined without allowing any income allocation for either the community spouse or a dependent family member.
Dependent Family Member Allowance
- Each dependent family member who lives with the community spouse
can receive a
monthly dependent family member income allowance equal to one-third
of the monthly minimum community spouse income allowance from
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. The
choice made by the applicant on the M-3 (Notice of Intent to Allocate
Income) form shall be used for this purpose.
Upon receipt of M-3 form 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 KDHE-DHCF Policy. 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. KDHE-DHCF Policy will then serve as a central clearinghouse for all spousal impoverishment activity and information.