An ALJ may increase the community spouse income allocation (CSIA) if the community spouse does not have enough income to pay his or her “necessary and basic maintenance needs.” In this case, the community spouse had many credit card and hospital bills to pay, plus home and auto payments, maintenance, and insurance. ALJ Kelly Cochrane ordered the CSIA increased to $3,825.03 ($109.53 above the usual maximum), allowing for the minimum payments on the credit card bills, home maintenance, car maintenance, and payroll deductions, among other things. (Curiously, she allowed only $20 for “personal care,” less than the institutionalized spouse’s personal needs allowance.)
Note ALJ Cochrane’s reasoning on what counts as “necessary and basic”:
To determine whether an expense is basic, an ALJ looks at whether an expense is either mandatory (e.g., income tax) or essential for survival (e.g., food).
This decision was published with support from the Elder Law & Special Needs Section of the State Bar of Wisconsin and the Wisconsin chapter of the National Academy of Elder Law Attorneys.
Preliminary Recitals
Pursuant to a petition filed on October 11, 2023, under Wis. Stat. § 49.45(5), and Wis. Admin. Code § HA 3.03, to review a decision by the Walworth County Department of Human Services regarding Medical Assistance (MA), a hearing was held on December 19, 2023, by telephone. The matter was originally heard on November 15, 2023, but the parties agreed to try and resolve the matter without a hearing. The second day of hearing was held on December 19, 2023 as the parties were not able to resolve the matter.
The issue for determination is whether petitioner’s community spouse income allocation can be increased.
There appeared at that time the following persons:
PARTIES IN INTEREST:
Petitioner:
—
Respondent:
Department of Health Services
1 West Wilson Street, Room 651
Madison, WI 53703
By: Sandy Cross
Walworth County Department of Human Services
PO Box 1005 County Rd NN
Elkhorn, WI 53121-1005
ADMINISTRATIVE LAW JUDGE:
Kelly Cochrane
Division of Hearings and Appeals
Findings of Fact
- Petitioner (CARES # —) is a resident of Walworth County and receives Institutional MA. His spouse has remained in the community.
- On November 24, 2023 and December 12, 2023, the agency advised the petitioner of the amount of income he could allocate to his spouse.
- Petitioner’s community spouse has a gross monthly income of $2387.70. Petitioner’s monthly gross income is $2340.14.
- Petitioner’s community spouse’s allowable monthly expenses total $3,825.03 per month.
- The agency allowed a community spouse income allocation of $797.04 effective November 2023 and then $1456.96 effective December 2023.
- The parties agreed that the income allocation determined herein is to be effective October 1, 2023.
Discussion
Spousal impoverishment is an MA policy, created pursuant to the Medicare Catastrophic Coverage Act of 1988, which allows persons to retain assets and income that are above the regular MA financial limits. Spousal impoverishment policy applies only to institutionalized persons and their community spouses. Wis. Stat., § 49.455 sets forth the law regarding the protection of the community spouse’s income and resources.
After an institutionalized person is found eligible, s/he may allocate some of his/her income to the community spouse. The institutionalized person must decide how much income to allocate and may allocate an amount that brings the community spouse’s income up to the maximum allocation or they may choose to allocate a lesser amount. See MA Eligibility Handbook (MEH), § 18.6.1 available online at http://www.emhandbooks.wisconsin.gov/meh-ebd/meh.htm. The maximum allocation allowed currently is $3,715.50. Id. at § 39.4.4.
The agency is required to determine the maximum amount of income that the institutionalized spouse can allocate to their community spouse, in relevant part, as follows:
- Find the Community Spouse Lower Income Allocation Limit.
- Determine the excess shelter allowance.
- Determine the lesser of:
- The sum of the Community Spouse Lower Income Allocation Limit and
the excess shelter allowance.- The Community Spouse Income Allocation Maximum.
- Subtract the community spouse’s monthly gross income from the amount
determined in Step 3. The result is the maximum amount of income that the
institutionalized person can give to their community spouse. They may give an amount less than this, but not more unless 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.
Id. at § 18.6.2.
In this case, the agency allocated the maximum it could allow to the community spouse. The community spouse maintains that she cannot get by on her income and allocation alone. The agency does not have discretion to allocate income to her that would cause her “income plus allocation” total to exceed the maximum. However, I have some limited discretion and have determined that her income is short of what she needs to cover basic living expenses. See Wis. Stat., § 49.455(8)(c). The statute allows the allocation to be raised to avert financial duress, created by exceptional circumstances, for the community spouse. To determine whether an expense is basic, an ALJ looks at whether an expense is either mandatory (e.g., income tax) or essential for survival (e.g., food). The community spouse presented her various expenses at hearing. I add that the community spouse is employed, so her payroll taxes should be subtracted from her gross income and are averaged in the expenses list below. The credit card and hospital debts are listed with the minimum monthly payment. I cannot include a roof repair for which no debt has yet been incurred, but I did add in a monthly home maintenance expense and a personal care expense.
The acceptable monthly expenses for the community spouse are as follows:
| Mortgage 1 | $949.83 |
| Mortgage 2 | $44 |
| Utilities (water) | $65 |
| Utilities (electric) | $123 |
| House insurance | $91.58 |
| Home maintenance | $50 |
| Water softener | $19 |
| Credit card (—) | $35 |
| Credit card (—) | $85 |
| Credit card (—) | $29 |
| Credit card (—) | $35 |
| Credit card (—) | $49 |
| Credit card (—) | $56.37 |
| Credit card (—) | $40 |
| Credit card (—) | $296.12 |
| Credit card (—) | $35 |
| Credit card (—) | $200 |
| Car insurance | $290 |
| Car registration/maintenance | $7 |
| Car payment | $498 |
| Gas (auto) | $150 |
| Phone | $128 |
| Groceries | $200 |
| Personal care (haircuts, clothing, etc.) | $20 |
| Hospital bills (—) | $50 |
| Hospital bills (—) | $50 |
| Medicare | $174.40 |
| Federal withholding | $13.84 |
| Wis. withholding | $8.53 |
| SS | $26.23 |
| Medicare tax | $6.13 |
| TOTAL | $3,825.03 |
Based on the foregoing, I will order that the community spouse income allowance be raised to $3,825.03 per month. The agency is also reminded to review these costs in an annual review.
Conclusions of Law
Due to exceptional circumstances, the petitioner’s community spouse requires a $3,825.03 Maximum Community Spouse Income Allocation effective October 1, 2023.
THEREFORE, it is
Ordered
That the petition for review herein be remanded to the agency with instructions to increase petitioner’s community spouse’s Maximum Community Spouse Income Allocation to $3,825.03 effective October 1, 2023, and to issue a notice of decision regarding same. This action shall be taken within 10 days of the date of this Decision. In all other respects, the petition is dismissed.
[Request for a rehearing and appeal to court instructions omitted.]