Spousal Impoverishment Law

When a spouse files for Medicaid benefits the Spousal Impoverishment Protection Law takes affect. Here's a look at how assets and income are treated.

WHAT HAPPENS TO INCOME?

Personal IncomeIncome in your name remains your own (Social Security, Pension, etc.).Income from assets in your name remains your own.The spouse at home may keep all of his/her personal income.Jointly Owned IncomeIncome from assets owned by both spouses is counted by Medicaid as jointly-owned income. Jointly-owned income is divided in half, with each spouse getting a half. The spouse in the nursing home must use his/her income to pay for nursing home care, but may keep a personal needs allowance of $52 per month.

SPOUSE MAY BE ABLE TO KEEP MORE

After the income has been split, if the spouse at home gets less than $1,605 (Effective 7/2005) each month (when adding the personal income plus his/her share of the joint income) he/she may keep part of the nursing home spouse's income in order to bring his/her total up to at least $1,605. (Effective 7/2005) If the spouse at home has living expenses that are very high, he/she may appeal to keep more of the nursing home spouse's income, bringing him/her up to a maximum of $2,378 (Effective 1/2005) per month. Appeals are handled at the Department of Family Services. If the spouse's personal income plus his/her share of the joint income is more than $2,378 (Effective 1/2005) per month, he/she does not get to keep any of the nursing home spouse'sincome.

LET'S LOOK AT HARRY & SALLY:  Harry is no longer able to take care of Sally at home. She is being admittedto a long term care facility. They own $100,000 in countable assets and their total monthly income is $1,600. Harry may keep all of his income (checks made out in his name, plus his half of the income that is jointly owned). Remember, if Harry's income is lower than $1,605 a month, then he can keep part of Sally's income. Checks made out in Sally's name, plus her half of the jointly owned income, is considered hers and should be used to pay for her care. Medicaid would pay any remaining costs for her care.

WHAT HAPPENS TO ASSETS?

Most assets are considered by Medicaid as joint assets between husband and wife; it doesn't matter in whose name they are placed. What amount of the couple's assets is the spouse at home able to keep?MAXIMUM - half of all countable assets, up to a total of $95,100MINIMUM - at least $19,020A person may appeal to keep more assets. Figures effective January 1, 2005

WHAT ABOUT THE COUPLE'S HOME?

The home is not counted as an asset when the applicant, spouse, or dependent children live in the home. Special rules apply when siblings or adult children live in the home (The home is always counted if no one intends to live there). Protection under the Spousal Impoverishment law applies to nursing home care, and under the Medicaid Aged and Disabled Waiver, for in home and community-type care services.

WHAT ASSETS ARE "COUNTABLE"?Some examples of assets that are "countable" are:

Checking accounts

Savings accounts

CD's

Stocks

Bonds

Mutual funds

Revocable trusts

Cash value of life insurance policies

IRAs

Example: (from Harry and Sally) Half of Harry and Sally's countable assets

amount to $50,000.  Since $50,000 is less than the maximum allowed amount under this law (maximum is $95,100), Harry is able to keep all of his portion of the assets.  Sally and Harry would need to spend Sally's $50,000 down to $1,500 before Medicaid would begin to help pay for her nursing home costs.

CAUTION! Transferring of assets:

Persons who transfer assets to get Medicaid help, may wait longer before Medicaid will help pay for nursing home costs. Other penalties may also be applied.

How do you find out more?

1. Call SHIP or your local Office of Family and Children (Medicaid) to ask questions.  The Senior Health Insurance Information Program (SHIIP) is a free, unbiased counseling program.

2. Contact the Office of Family and Children, when your spouse enters a nursing

home, to complete a resource assessment form (also called a "snapshot"). The

assessment will help you find the total value of combined finances and will help

decide the amount of assets the spouse at home may keep. You must show proof

of all assets owned.

3. Contact the Senior Law Project office nearest you or an elder law attorney.

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