State of Wisconsin Department of Health Services

HISTORY

The policy on this page is from a previous version of the handbook. 

21-02 Version of 18.6 Spousal Impoverishment Income Allocation

18.6.1 Spousal Impoverishment Income Allocation Introduction

After an institutionalized person is found eligible, he or she may allocate some of his or her income to the community spouse and dependent family members living with the community spouse. Income that is allocated for the community spouse must actually be given to the community spouse each month in order for it to be allowed as a post-eligibility income deduction for the institutionalized spouse. However, income that is allocated for a dependent family does not have to be actually given to the dependent family member.

Dependent family members include:

• Dependent minorA minor is a person less than age 18. children (natural, adopted, step) of either parent who live with the community spouse.
• Children (natural, adopted, step), 18 years old or older, of either parent, who are claimed as dependents for tax purposes under the IRCInternal Revenue Code and who live with the community spouse.
• Siblings of either the institutionalized person or the community spouse who are claimed as dependents and who live with the community spouse.
• Parents of either the institutionalized person or the community spouse who are claimed as dependents and who live with the community spouse.

An institutionalized person must decide how much income to allocate. He or she may allocate an amount that brings the community spouse's and family members' income up to the maximum allocation, or he or she may choose to allocate a lesser amount.

Since he or she may have medical costs that are not covered by Medicaid, he or she may wish to keep some income and not allocate it all.

Note:

Income allocated to the community spouse is countable income for him or her and must be added to the community spouse's case.

Example 1:

Caroline has monthly income of $400. She transfers $310 to her community spouse, keeping only her personal needs allowance (see Section 39.4.2 Elderly, Blind, or Disabled Deductions and Allowances) and $45 to pay as her monthly patient liability. She incurs $80 in noncovered medical expenses each month. Those expenses will be charged first to her patient liability, but she must pay the remaining $35.00 out of her personal needs allowance. If the personal needs allowance does not cover her expenses, the provider will try to obtain the balance from the community spouse.

18.6.2 Community Spouse Income Allocation

To determine how much of the institutionalized spouse's income to allocate:

1. The community spouse maximum income allocation is one of the following:
   1. $2,903.34 plus excess shelter allowance (see Section 39.4.2 Elderly, Blind, or Disabled Deductions and Allowances) up to a maximum of $3,259.50.
      
      "Excess shelter allowance" means shelter expenses above $871.00. Subtract $871.00 from the community spouse’s shelter costs. If there is a remainder, add the remainder to $2,903.34 (see Section 39.4.2 Elderly, Blind, or Disabled Deductions and Allowances).
      
      Community spouse shelter costs include the community spouse’s expenses for:
      1. Rent
      2. Mortgage principal and interest
      3. Taxes (including special assessments) and insurance for principal place of residence. This includes renters insurance.
      4. Any required maintenance fee if the community spouse lives in a condominium or cooperative.
      5. The standard utility allowance established under FoodShare:

      If the community spouse pays:	Add:
      Heat and utilities	Heating Standard Utility Allowance*
      Utilities only	Limited Utility Allowance*
      Telephone only	Phone Utility Allowance*
      If the community spouse lives in a condominium or cooperative where the maintenance fee includes utility expenses, reduce the standard utility allowance by the amount of utility expenses included in the maintenance fee. * See the FoodShare Wisconsin Handbook Section 8.1.3 Deductions for the current standard utility allowance amounts.

      For HCBWHome and Community-Based Waiver cases, follow these rules to determine when to add the excess shelter cost to the community spouse income allocation:
      1. If the waiver person's community spouse lives with him or her, do not add the excess shelter cost to the income allocation.
      2. If the waiver person's community spouse does not live with him or her, add the excess shelter cost to the income allocation.
   2. A larger amount ordered by a fair hearing decision or a court order. A court or fair hearing can increase the community spouse income allocation if it determines the spouse is not able to provide for his or her necessary and basic maintenance needs with the amount allocated.
2. The maximum allocated amount is the difference between the allowable community spouse income allocation and the community spouse’s monthly gross income. Use the EBDElderly, Blind, or Disabled income rules, but do not give earned income, unearned income, and work-related deductions.
   
   The institutionalized spouse may choose to allocate less than the maximum amount.

18.6.3 Family Member Income Allowance

The institutionalized person can allocate up to $725.84 per month to each dependent family member who lives with the community spouse.

The allocated amount is the difference between $725.84 and the actual monthly income of the dependent family member.

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The information concerning the Medicaid program provided in this handbook release is published in accordance with: Titles XI and XIX of the Social Security Act; Parts 430 through 481 of Title 42 of the Code of Federal Regulations; Chapters 46 and 49 of the Wisconsin Statutes; and Chapters HA 3, DHS 2, 10 and 101 through 109 of the Wisconsin Administrative Code.

Notice: The content within this manual is the sole responsibility of the State of Wisconsin's Department of Health Services (DHS). This site will link to sites outside of DHS where appropriate. DHS is in no way responsible for the content of sites outside of DHS.

Publication Number: P-10030