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, ALJ Nicole Bjork increased the CSIA to $3,875.21 to allow for expenses such as a mortgage, car loan, lawn maintenance, veterinary bills and pet insurance, life insurance, and payroll taxes.
This decision includes a bench slap directed at the agency representative, who apparently agreed that the CSIA should be increased but showed up to the hearing with no exhibits (not even the notice of action) and “sparse” testimony.
This decision was published with support from the Wisconsin chapter of the National Academy of Elder Law Attorneys.
Preliminary Recitals
Pursuant to a petition filed on May 8, 2024, 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 August 14, 2024, by telephone.
The issue for determination is whether Petitioner’s community spouse 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: Barbara Popera
Walworth County Department of Human Services
PO Box 1005 County Rd NN
Elkhorn, WI 53121-1005
ADMINISTRATIVE LAW JUDGE:
Nicole Bjork
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 June 20, 2024, the agency issued a notice to Petitioner advising of the amount of income he could allocate to his spouse.
- Petitioner’s community spouse has a gross monthly income of $4096.00 per month as a limited term employee, which she expects will end around January 1, 2025. Petitioner’s monthly gross income is $2991.70.
- Petitioner’s community spouse’s allowable monthly expenses total $3875.21.
- It appears that the agency allowed a community spouse income allocation of $0.
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, it appears the agency allocated $0 to the community spouse. Of note, no exhibits were presented prior to or during the hearing and the testimony was sparse. Both sides agreed that an increase was necessary in this case, but failed to offer any details other than that an increase was needed based on Petitioner’s expenses. The notice of action had not even been included prior to the hearing and I was left guessing about whether I would have the necessary documentation. The record was left open, and exhibits were subsequently submitted. Based on my review, it appears the community spouse has been awarded zero dollars but clarification on that point during the hearing would have been helpful. In the future, agency representatives should be prepared for the hearing with the notice of decision that triggered the appeal, a detailed description of the action taken with supporting documentation to determine how the agency arrived at their determination. Showing up at the hearing with zero exhibits and stating that you don’t disagree with the Petitioner’s request for an increase in spousal allocation does not provide the hearing examiner with any information upon which to make an accurate decision let alone write that decision.
In any event, 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 after the 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 debts are listed with the minimum monthly payment.
The acceptable monthly expenses for the community spouse are as follows:
| Mortgage | $1105.71 |
| Car Loan | $628.14 |
| Car Insurance | $104.33 |
| WE Energies | $170.63 |
| — Water | $36 |
| Lawn Maintenance | $200 |
| — | $49 |
| Cell Phone | $72.96 |
| Gas | $150 |
| Groceries | $200 |
| Medicare Insurance | $174.70 |
| — Internet | $78.50 |
| Vet bills | $25 |
| Pet Insurance | $29.32 |
| — Life Insurance | $56.72 |
| — Life Insurance | $43.72 |
| Credit card (—) | $521 |
| Credit Card (—) | $97 |
| Credit Card (—) | $30 |
| Medicare | $14.85 |
| Wis. withholding | $24.14 |
| SS | $63.49 |
| TOTAL | $3,875.21 |
Based on the foregoing, I will order that the community spouse income allowance be raised to $3,875.21 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 $3,875.21 Maximum Community Spouse Income Allocation effective whatever date the June 20, 2024, notice took effect.
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 $3,875.21 effective whatever date the June 20, 2024 notice took effect, 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.]
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