Policy History for 5.10.6 income allocation

Release 04-03

After the institutionalized person is found eligible, s/he may allocate some of his/her income to the community spouse and dependent family members living with the community spouse.
 

Dependent family members include:
 

  1. Dependent minor children (natural, adopted, step) of either parent who live with the community spouse.
     

  2. Children (natural, adopted, step), 18 years of age or older, of either parent, who are claimed as dependents  for tax purposes under the Service Code Internal Revenue ( IRSC ) and who live with the community spouse.
     

  3. Siblings of either the institutionalized person or the community spouse who are claimed as dependents and who live with the community spouse.
     

  4. Parents of either the institutionalized person or the community spouse who are claimed as dependents and who live with the community spouse.

 

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

 

Since s/he may have medical costs that aren't covered by MA, s/he may wish to keep some income and not allocate it all.

 

Example 1:  Caroline has monthly income of $400.  She transfers $310 to her community spouse, keeping only her personal needs allowance (8.1.5.1) and $45 to pay as her monthly patient liability.  She incurs $80 in non-covered 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.

 

 

Use the Spousal Impoverishment Income Allocation Worksheet (WKST 07) to determine how much of the institutionalized spouse's income:

 

  1. May be allocated to his/her spouse ( Section A ).
     

  2. Will be deducted, regardless of whether or not s/he actually allocated it to other dependent family members ( Section B ).
     

  3. Will be paid toward his/her cost of care ( Section C ).

 

 

On the Spousal Impoverishment Income Allocation Worksheet (WKST 07), do the following:

 

Section A -- Community Spouse Income Allocation

 

  1. Enter on Line 1 the community spouse maximum income allocation.  Unless a larger amount is ordered by a fair hearing or court, the maximum allocation is the lesser of:
     

  1. $2,319.00, or

  2. $2,081.67 plus excess shelter allowance.

    “Excess shelter allowance” means shelter expenses above $624.50.  Subtract $624.50 from the community spouse’s shelter costs.  If there is a remainder, add the remainder to $2,081.67.

    Community Waivers.      Follow these rules to determine when to add the excess shelter cost to the community spouse income allocation:

      1. Rent.

      2. Mortgage principal and interest.

      3. Taxes 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 the Food Stamp program:
         

 

If Community Spouse pays:

Add

Heat and utilities

$241

Utilities only

$133

Telephone only

$23

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.
 

 

     

  1. Enter on Line 2 the community spouse's monthly gross  income.  Use the EBD income rules, but do not give earned income, unearned income, and work related deductions.
     

  2. Do the math from Line 1 through Line 3.  The result on Line 3 is the maximum amount of income the institutionalized spouse may allocate to his/her community spouse.

 

If the institutionalized spouse does not allocate the maximum amount, the amount s/he retains counts as income in determining the amount contributed to the patient liability.
 

Section B -- Family Member Income Allowance

 

  1. Enter $520.42 on Line 1 under the name of each dependent family member who lives with the community spouse.

 

  1. Enter the gross monthly income of each dependent family member under his/her name.  Use the EBD income rules, but do not give earned income, unearned income, and work related deductions.
     

  2. Do the math from Line 1 through Line 3.
     

  3. Add the Line 3 amounts together and enter the total on Line 4.  Deduct the amount on Line 4 from the institutionalized spouse's income.

 

Section C -- Cost of Care

 

  1. Enter the institutionalized person's gross monthly income on Line 1.  Use the EBD income rules, but do not give earned income, unearned income, and work related deductions.
     

  2.  Enter his/her personal allowance on Line 2:
     

    1. Personal Needs Allowance (8.1.5.1) for a person in a medical institution, or
       

    2. Personal Maintenance Allowance for a person in community waivers.  This is the Community Waivers Basic Needs Allowance (8.1.5.1) plus other applicable deductions (5.9.9.2.1) up to the EBD Maximum Personal Maintenance Allowance amount (8.1.5.1).

 

  1. Enter on Line 4 the income allocation amount (Section A, Line 3) that is actually allocated to the community spouse.
     

  2. Enter on Line 6 the dependent family member allowance from Section B, Line 4.
     

  3. Enter on Line 8 any court-ordered guardian or attorney fees (5.8.6.5).
     

  4. Community waivers only.  Enter on Line 10 the community waiver person's medical/remedial expenses and the cost of his/her health insurance premiums.

    Nursing home cases only.      Enter on Line 10 the cost of the nursing home person's health insurance premiums.
     

  5. Do the math from Line 1 through Line 11.  The result on Line 11 is the amount the institutionalized spouse must pay toward cost of care.

 

Example 2:  Harry, a MA recipient, resides in a nursing home.  He has unearned income of $3,600 a month.  His wife, Edith, gets $200 a month from Social Security.  Her sisters, Mabel and Maxine, whom she claims as dependents on her IRS tax forms, live with her.  Mabel has no income.  Maxine receives $20 a month from her son.

 

Community Spouse Income Allocation

 

Harry's community spouse, Edith, has shelter costs of $756.00 a month.  Her excess shelter costs are $756.00 minus $624.50 = $131.50.  $131.50 plus $2,081.67= $2,213.17.  $2,213.17 is less than $2,319.00, so the maximum allocation amount to Harry's spouse is $2,213.17.

 

$ 2,213.17 (maximum income allocation)

      -200.00 (Edith's monthly income)

$  2,013.17  (spousal income allocation)

 

Family Member Income Allowance

 

$ 520.42 (maximum income allowance)

      -0.00 (Mabel's income)

$ 520.42 (Mabel's income allowance)

 

$ 520.42 (maximum income allowance)

    -20.00 (Maxine's income)

$ 500.42 (Maxine's income allowance)

 

   $520.42  (Mabel's income allowance)

 +$500.42  (Maxine's income allowance)

$ 1,020.84 (total family member income allowance)

 

Payment Toward Cost of Care

 

$ 3600.00 (Harry's income)

      -45.00 (personal needs allowance)

  -2013.17 (spousal income allocation)

  -1020.84 (family member income allowance)

$   520.99 (nursing home liability amount)

 

 

This page last updated in Release Number : 04-03

Release Date: 08/02/04

Effective Date: 03/01/04