Spousal Impoverishment Laws
California law allows the community spouse to retain a certain amount of otherwise countable resources available to the couple at the time of application. This is called Community Spouse Resource Allowance (CSRA) and it increases every year according to the Consumer Price Index. The current (2010) CSRA is $109,560.
Separate property will be counted in the total resources and subjected to the $109,560 limit. However, only non-exempt resources are counted in the spouses’ combined and countable resources at the time of application for Medi-Cal. Thus, IRA’s in the community spouse’s name, household goods, personal effects, a car, the house, jewelry, etc., are all totally excluded, regardless of value, and the at home spouse can retain these, as well as the CSRA of $109,560.
Resources acquired after the spouse is institutionalized and before he/she goes on Medi-Cal are not protected and will be counted at the time of application. However, once the spouse is eligible for Medi-Cal, any resources acquired after eligibility by the community spouse are protected and will not affect the institutionalized spouse’s eligibility. For example, if the community spouse inherited $100,000 after the nursing home spouse was on Medi-Cal, she could keep this without affecting the other spouse’s eligibility. Resources held prior to the spouse’s institutionalization may be transferred under certain conditions.
Spending Down: A spouse can spend down resources on anything, whether or not it is for his or her own benefit. Mortgage notes on property held in the names of both spouses could be paid in full by the institutionalized spouse without a period of ineligibility for transferring assets for less than fair market value.
Income: California law allows the community spouse to retain a minimum monthly maintenance needs allowance (MMMNA) of $2,739 (as of 1/1/2009). This amount is adjusted annually by a cost of living increase. Under the “name on the instrument rule,” the community spouse may retain any income received in his/ her name alone. It is important to note that the $2,739 amount is a floor.
Thus, if the community spouse’s monthly income is less than the MMMNA of $2,739, he/she may receive an allocation from the institutionalized spouse’s income; file for a fair hearing to increase the CSRA to generate additional income; and/or obtain a court order to obtain additional income-generating resources. With current miniscule interest rates, it is relatively easy for a community spouse to retain assets above the CSRA, if his/her income is low. If the community spouse’s income in his or her name alone exceeds the MMMNA, the community spouse may keep it all. For example, if the spouse at home received $5,000 per month in income, he/she can retain all of that income, but will not receive a spousal allocation from the nursing home spouse, because the community spouse income is above the $2,739 MMMNA.
