8244 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 an HCBS arrangement for at least 30 consecutive days, including those situations in which the HCBS spouse dies prior to the 30th day of HCBS care. As a result, such protected resources and income would not be considered in determining the medical eligibility of the spouse in HCBS. The law also provides for income to be protected for dependent family members and for the consideration of only the HCBS spouse's own income in determining his or her eligibility beginning with the month the spouse chooses HCBS or begins receiving services, whichever is earlier.
The following policies are only applicable in those instances in which one spouse lives in the community and the other spouse will be receiving HCBS services or where both spouses are receiving HCBS. If both spouses are receiving HCBS, the couple must designate one spouse to be the LTC spouse and one to be the community spouse. Once this designation is made it cannot be changed unless there is also a change in living arrangement which requires either the husband or wife to be the LTC spouse. In these cases, the change is effective the month following the month the living arrangement changed. These provisions do not apply to single individuals or to married couples where both members remain in the community.
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.
8244.1 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.
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
1/2 of the value of the couple's nonexempt resources owned at the time the spouse would qualify for HCBS services (been assessed and chosen HCBS or put on a waiting list per 8241), not to exceed $120,900 .
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 HCBS spouse would otherwise qualify for HCBS services (been assessed and chosen HCBS) unless the person had been previously in an institution in which case that beginning date shall be used in accordance with 8144.1 (2). Otherwise resources which would have been counted at the time the individual would have qualified for HCBS 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 in the Forms 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.
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 HCBS spouse based on the community spouse resource allowance, a formal application shall be taken and processed at that time.
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. The couple will need to provide any necessary evidence to document the amount of resources owned.
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.
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.
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 HCBS 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 HCBS 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 HCBS 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 HCBS 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 HCBS 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 DCF 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.
8244.2 Spousal Income Provisions - The following provisions are applicable to the consideration of the couple's income.
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 $2,030 or less per month, 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 $2,030 per month, income sufficient enough to bring the spouse's gross income up to $2,030 per month can be made available. The $2,030 protected income level can be increased to a maximum of $3,023 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 $3,023 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 $2,030 division cap (i.e., $609). 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 $364/month, the amount of the excess shelter allowance would equal the amount by which the spouse's shelter payment exceeds $245/month. This allowance would be added to the base $2,030 allocation amount and, therefore, increase the amount of income the spouse would receive. The amount of the excess shelter allowance cannot exceed $993/month for a total allocation cap of $3,023 ($2,030 base and $993 excess shelter). Thus, if the spouse's shelter payment equals or exceeds $1,238/month, all that can be provided for excess shelter is $993. Any payment greater than $245 but less than $1,238 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 $3,023 maximum income standard 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 HCBS 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 $3,023 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 in1619, the allowance shall equal that amount.
Dependent Family Member Allowance - Each dependent family member who lives with the community spouse can receive $677 per month of the income of the HCBS 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 8243 (3) 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 services begin for ongoing recipients by using the Income Allowance Determination Form in the Forms. The full permitted allowances are to be computed on this form even though the income of the client 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 HCBS 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 HCBS 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 HCBS services began. 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. Legal Division will then serve as a central clearinghouse for all spousal impoverishment activity and information.