Adult Medicaid Manual MA-2270 LONG TERM CARE NEED AND BUDGETING

VI. THE COMMUNITY SPOUSE INCOME ALLOWANCE (SPOUSE IN PLA)

When computing the patient monthly liability, an allowance may be deducted from the a/r’s income for the needs of his spouse. The following instructions tell you how to do this. See MA-2231, for Community Spouse Resource Protection.

A. Rules For Community Spouse Income Allowance Eligibility

1. Determine when to allow the community spouse allowance and verify that the community spouse actually receives this allowance.

a. If the community spouse is legally married to the a/r and/or separated less than 12 months prior to the institutionalization, you may make an allowance for the community spouse.

b. If the a/r and the community spouse have been separated for more than 12 months prior to institutionalization, do not make an allowance for the community spouse.

2. Do not calculate an allowance if both spouses are institutionalized.

3. A spouse who receives services in an adult care home is not institutionalized and is eligible to receive this allowance.

4. Income allocated through these procedures is countable to the community spouse in all other assistance programs.

5. The community spouse allowance is a pml calculation deduction in Step II of LTC budgeting. Therefore, if the a/r must be budgeted by PLA procedures for any reason, the community spouse is not eligible for the spousal allowance.

6. The maximum community spouse allowance amount is determined by the maximum available from the institutionalized spouse's income after deductions in STEP II (refer to V.C., above). If the maximum available is $0, there is no allowance.

7. The a/r or representative can choose to make a lesser amount actually available to the community spouse, or the community spouse can request a lesser allowance to not affect eligibility in other programs. Follow instructions below:

a. Document the lesser amount, and if possible, obtain a written statement from the a/r, the community spouse, or the representative regarding the reason for the lesser amount, and

b. Deduct the lesser amount when computing the patient monthly liability.

REVISED 07/01/11 – CHANGE NOTICE 14-11

(VI)

8. The income amount allowed for the community spouse is calculated in two steps:

a. A basic spousal allowance; and

b. Excess shelter costs (see VI.C.)

B. The Basic Spousal Allowance

There is a standard formula used to calculate the basic spousal allowance. Use DMA-5008, SUPPLEMENT C, as a guide.

1. Verify the community spouse's gross monthly income (including SSI, Special Assistance, or Work First). Do not calculate this allowance until the community spouse's income has been verified.

a. Follow verification procedures in MA-2250, Income.

b. Do not deduct taxes, work-related expenses, or any other deduction or exemption from the community spouse's income.

c. Prorate a Work First grant based on the number of Work First recipients.

2. Basic Allowance for Community Spouse

Compare gross income of the community spouse to an income standard of $1,839.

Note: This standard is 150% of the federal poverty limit for 2 people.

a. If the community spouse's gross monthly income exceeds or equals $1,839, STOP. Follow directions in VI.C, below, for consideration of excess shelter costs.

b. If the community spouse's gross monthly income is less than $1,839, determine the basic allowance amount by:

(1) Subtracting the gross income of the community spouse from $1,839.

(2) Compare this amount to the amount available from the income of the a/r. See V.C., above, and

REISSUED 07/01/11– CHANGE NOTICE 14-11

(VI. B. 2. b.)

(3) Evaluate the results.

(a) If the basic allowance exceeds or equals the amount available from the a/r:

1) The amount available from the a/r is the community spouse income allowance. Enter this amount on the income worksheet.

2) Do not consider excess shelter costs.

(b) If the basic allowance is less than the amount available from the a/r, consider excess shelter costs.

C. Excess Shelter Costs

When determining the community spouse allowance, we can sometimes consider shelter costs. Follow procedures below to determine if there are excess shelter costs.

1. Verifications of Shelter Costs

a. Applications - Accept the verbal statement of the representative, the a/r, or the spouse of amount of shelter costs and document in the record.

b. Reviews and changes - Obtain at least a signed statement from representative or a/r. If possible obtain a statement from the list of alternative verifications below.

• Rent or mortgage for principal residence only.

Alternative verification: Verify actual cost by verbal or written statement from a/r or landlord, rent receipt, mortgage payment book, mortgage payment receipts, or statement of mortgage holder.

• Taxes on the homesite, if taxes are paid separately from the mortgage.

Alternative verification: Verify taxes by tax receipt or statement from the county tax office. Do not include personal taxes on motor vehicles or other personal property.

• Homeowner's or renter's insurance, if paid separately from the mortgage/rent.

Alternative verification: Statement from the insurance company or by a payment receipt.

REVISED 01/01/12 – CHANGE NOTICE 02-12

(VI.C.1.b.)

• Required maintenance charges or homeowner fees from condominium, cooperative, or homeowners' association.

Alternative verification: Statement from the homeowner's association or management company, or by payment receipt.

• Utilities

▪ If community spouse lives in government subsidized housing, do not deduct for utilities unless the spouse receives notice that an excess utility charge will be added to the rent and reports it to the dss. Treat as a change and redetermine the spousal income allowance for the remainder of the a/r’s c.p.

▪ For all others, deduct the standard amount from Table C at the end of this section. If the community spouse has roomers or boarders, count them in the household size.

2. The shelter standard is $552.

If total shelter costs are less than or equal to $552 per month:

a. Make no deduction for shelter costs.

b. The Basic Allowance from VI.B.2.b., above, is the spousal income allowance. STOP.

3. If total shelter cost exceeds $552 per month:

a. Subtract $552 from the total shelter costs.

b. The result is excess shelter expense.

4. Add the excess shelter in 3 above, to $1,839 up to a maximum community spouse income allowance of $2,841.

a. If the combined total is less than $2,841:

(1) Subtract community spouse's gross monthly income from the combined total.

(2) This amount is the spousal income allowance.

b. If total is equal to or exceeds $2,841:

(1) Subtract community spouse's gross monthly income from $2,841.

REISSUED 01/01/12 – CHANGE NOTICE 02-12

(VI.C.4.b.)

(2) This amount is the spousal income allowance.

c. The community spouse allowance can be adjusted up to the amount available from the income of the a/r when:

(1) A court order exists which establishes a different income amount, or

(2) Through county or state appeal, a decision is made that the community spouse needs additional income because of exceptional circumstances creating significant financial hardship.

5. Exceptions to shelter costs procedure:

a. If the community spouse receives a subsidy to pay all or a portion of shelter costs, deduct the amount of the subsidy from the total expenses.

EXAMPLE: The community spouse's rent is $280. HUD pays $50. The community spouse's actual rental expense is $230. The $230 would be included in shelter costs.

b. Disregard one-time assistance based upon need, such as LIEAP.

c. If rent includes food, such as a roomer/boarder fee, do not count the amount paid for food in determining shelter costs. Deduct the actual amount paid for food, if the landlord can verify verbally or in writing, from the rent payment.

6. If the community spouse receives Work First/Food and Nutrition Services, use the DSS-8194 to notify the Work First/Food and Nutrition Services IMC of the amount of the spousal income allowance.