Revision 24-4; Effective Dec. 1, 2024

Revision 15-3; Effective September 1, 2015

Effective September 30, 1989, Public Law 100–360 provides for the protection of income for the community spouse and certain dependent family members when the other spouse is institutionalized. Use the spousal impoverishment policies to determine Medicaid eligibility for individuals who:

• are likely to be in an institutional setting for a continuous period, or
• are eligible for Home and Community-Based Services and likely to need such services for at least 30 consecutive days, and
• have a spouse living in the community.

Spousal impoverishment requires a valid existing marriage. In Texas, there are three ways to terminate a marriage:

• Void Marriages — A determination that the marriage could not have existed because of one of the following legal impediments: the parties married within a prohibited degree of consanguinity (for example, nephew or niece), or at least one party has a previous marriage that has not been resolved. Void marriages do not require a lawsuit, and the marriage may be declared void in a collateral action (for example, contest of will). A legal marriage between parties never existed.
• Annulments — Also called voidable marriages. Grounds for annulment include, but are not limited to, marrying under the influence of drugs/alcohol, at least one party being incapacitated or the marriage being coerced. Annulments require court action, but under common law, an annulment is retroactive to the date of marriage.
• Divorce — Requires court action, and the marriage is dissolved effective the date of the divorce decree.

Spousal impoverishment provisions do not apply in the case of void or annulled marriages. If there is a void marriage or a court annulment of the marriage, always treat the person as an individual. In the case of a divorce, spousal impoverishment provisions apply through the end of the calendar month in which the divorce is issued.

Spousal impoverishment provisions do not apply when determining Medicare Savings Programs (MSP) eligibility for either spouse. When determining resource eligibility for MSP, consider resources in the institutionalized spouse's name even if they are protected for the community spouse.

A resource assessment is part of the spousal impoverishment process. The purpose of the resource assessment is to determine a protected resource amount, which is the portion of the total resources that is reserved for the community spouse and deducted from the couple's combined resources in determining eligibility.

An institutionalized spouse is a spouse who is either (1) likely to reside in an institutional setting (for example, a medical institution and/or nursing facility) for a continuous period of institutionalization, or (2) eligible for Home and Community-Based Services and likely to need such services for at least 30 consecutive days. For spousal impoverishment policy, when determining the first continuous period of institutionalization, a medical care facility includes any of the following:

• Hospital, including a U.S. Department of Veterans Affairs (VA) hospital
• Nursing facility, whether private-pay or Medicaid
• Intermediate care facility for individuals with an intellectual disability or related conditions (ICF/IID)
• Institution for mental diseases (IMD)
• Rehabilitation facility

A community spouse is a spouse who is not living in a medical institution or nursing facility. An incarcerated spouse is not considered a community spouse for spousal impoverishment purposes.

The community spouse could be living in any of the following settings and still be considered a community spouse:

• Personal care setting
• Adult foster care setting
• Supervised living setting
• Residential care facility setting

However, if the community spouse is living in a personal care facility, check the bill to see if the spouse is actually living in a medical facility. If the personal care facility is billing for room and board only, the spouse meets the definition of a community spouse. If the personal care facility is billing for the services of any medical professional (such as a registered nurse [RN], licensed vocational nurse [LVN], doctor, etc.), the spouse does not meet the definition of a community spouse and spousal impoverishment polices do not apply.

See Section J-1500, Change in Martial Status.

Revision 15-3; Effective September 1, 2015

Community spouse — A person who is not living in a setting that provides medical care/services and who is married to:

• an institutionalized person, or
• a person who has been determined eligible for a Home and Community-Based Services waiver program.

Note: The community spouse of an institutionalized person may receive services under a Home and Community-Based Services waiver program, which will not affect the spousal diversion.

Dependent family member — Either spouses' minor or dependent children, dependent parents or dependent siblings (including half brothers, half sisters and siblings gained through adoption) who were:

• living in an institutionalized recipient's home before the recipient's institutionalization; or
• living with a recipient of a Home and Community-Based Services waiver program; and
• who are unable to support themselves outside the recipient's home because of medical, social or other reasons.

First continuous period of institutionalization — A spouse who is likely to reside in one or more of the following medical care facilities for a continuous period of institutionalization:

• Hospital, including a VA hospital
• Nursing facility, whether private-pay or Medicaid
• ICF/IID
• IMD
• Rehabilitation facility

Institutional setting — In this chapter only, a living arrangement in which a person applying for or receiving Medicaid:

• lives in a Medicaid-certified long-term care facility,
• receives services under a Home and Community-Based Services waiver program, or
• receives services under the Program of All-Inclusive Care for the Elderly (PACE).

Institutionalized spouse — A person who is married to a spouse residing in the community and who:

• receives care in an institutional setting, and
• has met or is likely to meet the continuous period of institutionalization for at least 30 consecutive days.

or

• is eligible for a Home and Community-Based Services waiver program, and
• is likely to need such services for at least 30 consecutive days.

Spousal protected resource amount (SPRA) — The portion of a couple's combined countable resources that is reserved for the community spouse and deducted from the couple's combined countable resources in determining eligibility.

J-1410 Refusal of a Community Spouse to Cooperate

Revision 09-4; Effective December 1, 2009

If a community spouse refuses to cooperate in providing information to establish a spousal protected resource amount (SPRA) during an assessment HHSC does not complete the assessment and takes no further action. See Section J-4000, Assessment and SPRA.

If an assessment is started in conjunction with an eligibility determination at the initial application, and a community spouse refuses to furnish information, HHSC determines the living arrangement before the continuous period in an institutional setting began and takes the following action:

• If the couple was living in the same household, HHSC denies the application based on the couple's failure to furnish information. Living in the same household includes temporary separations.
• If the couple was not living in the same household, HHSC determines the purpose of separation, the length of separation, and resources or income commingled or managed jointly by one spouse or a third party.
• If the community spouse refuses to cooperate in providing information, and circumstances indicate possible abuse or neglect by the community spouse, HHSC considers the institutionalized spouse as an individual for purposes of determining eligibility and calculating the co-payment.

J-1420 Separation to Circumvent Medicaid Policy

Revision 09-4; Effective December 1, 2009

Evaluate the information provided by a couple to determine if a couple separated before the continuous period in an institutional setting began to avoid the pooling of resources under Medicaid spousal impoverishment provisions, if:

• the separation occurred after a change in the health of the institutionalized spouse;
• the community spouse potentially owns separate resources; or
• the ownership of commingled resources was changed recently.

A couple has the right to rebut HHSC's determination that a separation occurred to circumvent Medicaid policy. To rebut HHSC's determination, either spouse or either spouse's authorized representative must provide a written statement or evidence to HHSC to substantiate the separation as directed on the written notification of HHSC's determination that a separation occurred to circumvent Medicaid policy.

If HHSC determines that circumstances indicate there was no intent to circumvent Medicaid policy, HHSC treats the institutionalized spouse as an individual for purposes of determining Medicaid eligibility and calculating the co-payment.

The rebuttal period is five workdays after oral notification (by HHSC to either spouse) and seven workdays after written notification. The institutionalized spouse, community spouse or responsible party must provide written statements or evidence to substantiate the separation.

Obtain supervisory approval of this evaluation of additional evidence. If circumstances indicate there was no intent to circumvent Medicaid policy, HHSC treats the institutionalized spouse as an individual for consideration of resources, income and co-payment.

Revision 10-2; Effective June 1, 2010

Spousal impoverishment requires both:

• an institutional spouse, and
• a spouse living in the community.

When there is a reported change to the status of the community spouse, the situation must be evaluated. Evaluation of any dependent family member situation would also be required when there is a change to the status of the community spouse or dependent family member.

The dependent allowance changes to the SSI FBR when there is no community spouse. 

J-1510 Community Spouse Dies

Revision 12-1; Effective March 1, 2012

If the marriage ends by death in the same month it began, treat the marriage as if it had never existed. Otherwise, the end of marriage is effective the month after the month of death.

If the community spouse dies, the SPRA and income diversion are allowed through the month in which the community spouse dies. Beginning the month after the death of the community spouse, consider the surviving spouse as an individual.

Things to Consider

With the death of the community spouse, determine if there is a change in the authorized representative who signed the application/redetermination under penalty of perjury. See Section B-3220, Who May Sign an Application for Assistance.

Re-evaluate available assets due to the death of a spouse. For example:

• pensions could adjust;
• available resource exclusions could change; and
• resources could change due to inheritance.

Co-payment Changes

Enter the information concerning the community spouse's date of death on the Individual Information screen. Ensure notice is sent for any co-payment change.

The community spouse was eligible for the income diversion the month of death, but restitution is applicable for subsequent months until the co-payment is corrected. Do not seek restitution for the month the community spouse died. Do restitute for subsequent months until the co-payment is changed in the system of record.

The dependent allowance changes to the SSI FBR when there is no community spouse. 

J-1520 Before Certification the Community Spouse Enters an Institutional Setting

Revision 15-4; Effective December 1, 2015

If the community spouse moves into an institutional setting (e.g., a medical institution or nursing facility) before certification of the first institutionalized spouse, determine if the spouses can be considered a couple.

Prepare a couple budget if a person is living with an eligible spouse (i.e., a spouse who is aged or has a disability) and they are:

• presenting themselves to the community as a married couple,
• determined to be married for purposes of receiving Social Security benefits, or
• recognized as married under state law.

To qualify for the special income limit, a person or couple must:

• have countable income that exceeds the reduced SSI FBR,
• reside in a Medicaid-certified long-term care facility for 30 consecutive days or be determined eligible for Home and Community-Based Services and be likely to need such services for at least 30 consecutive days, and
• receive a level of care or medical necessity determination that qualifies the person or couple for Medicaid.

If the spouses can be considered a couple, consider the incomes of both spouses against the special income limit standard for a couple.

If the spouses cannot be considered a couple or are not eligible as a couple, consider each spouse as an individual.

Notes:

• Use the special income limit if the person is age 65 or older and in a Medicaid-certified institution for mental diseases for 30 consecutive days. The dependent allowance is the SSI FBR when there is no community spouse.
• HHSC allows spousal diversions to a community spouse who is receiving services under a Home and Community-Based Services waiver program. Count the diversion as income to the community spouse in the waiver budget. 

J-1530 After Certification the Community Spouse Enters an Institutional Setting

Revision 15-4; Effective December 1, 2015

After certification of the institutional spouse, the SPRA and diversion of income stops when the former community spouse moves to an institutional setting either:

• during the initial 12-month eligibility period, or
• after the initial 12-month eligibility period.

When determining income for each spouse, allow the income diversion through the month in which the former community spouse moves to an institutional setting and consider it as income to the former community spouse. For the month following the move to an institutional setting, budget the former community spouse’s income without the diversion. The diversion becomes part of the co-payment budget for the first institutional spouse effective the month after the former community spouse moves to an institutional setting.

If the community spouse moves into an institutional setting (e.g., a medical institution or nursing facility) after certification of the first institutionalized spouse, determine if both spouses can be considered a couple. See Section G-6000, Institutional Eligibility Budget Types.

A couple budget is prepared if a person is living with an eligible spouse (i.e., a spouse who is aged or has a disability) and they are:

• presenting themselves to the community as a married couple,
• determined to be married for purposes of receiving Social Security benefits, or
• recognized as married under state law.

To qualify for the special income limit, a person or couple must:

• have countable income that exceeds the reduced SSI FBR,
• reside in a Medicaid-certified long-term care facility for 30 consecutive days, and
• receive a level of care or medical necessity determination that qualifies the person or couple for Medicaid.

If they can be considered a couple, the incomes of both spouses are considered against the special income limit standard for a couple.

If both spouses cannot be considered a couple or are not eligible as a couple, budget each spouse as an individual.

Note: The special income limit is used if the person is age 65 or older and in a Medicaid-certified institution for mental diseases for 30 consecutive days.

Things to Consider

If the spouses are eligible as a couple, a new application may not be required unless it is time for the annual redetermination. See Section B-3220, Who May Sign an Application for Assistance, if there has been a change in the authorized representative, power of attorney or legal guardian.

Verify resources as of 12:01 a.m. the month in which the former community spouse's medical effective date falls. When determining resources and transfers, see the information in Section I-3000, Exceptions to the Transfer of Assets, and Section I-5600, Apportioning Penalty Period Between Spouses.

Co-payment Changes

Enter the information concerning the community spouse's change in living arrangement to an institutional setting. Ensure notice is sent for any co-payment change.

Do not seek restitution for the month the former community spouse moved to an institutional setting. Do restitute for subsequent months until the co-payment is changed in the system of record.

The dependent allowance changes to the SSI FBR when there is no community spouse.

Example 1:

Spouse 1 entered the nursing facility in February of last year. Spouse 2 remained in the community. Combined countable resources as of 12:01 a.m. on Feb. 1 of last year were $50,000. An SPRA of $25,000 was determined at assessment. After spending down assets on the nursing facility and outstanding debts, spouse 1 filed an application this month. Two months ago, spouse 2 entered the same nursing facility. Treat as a couple case. If the spouses are not eligible as a couple, test their eligibility as individuals.

Example 2:

Spouse 1 entered the nursing facility on Feb. 2 of this year. Spouse 2 continued to live in their home. Combined countable assets for the month of entry were $14,000. The minimum SPRA was determined and the case certified in March. The couple's only income was their Social Security of $650 for spouse 1 and $900 for spouse 2, so the applied income was $0. Form H1279, Spousal Impoverishment Notification (PDF), was sent. Spouse 2 entered the same facility in April. Resources at 12:01 a.m. on April 1 totaled $9,000 in spouse 2’s name. Spouse 2 is no longer a community spouse. Spousal impoverishment policy no longer applies. Spouse 2 is not resource-eligible.

• Complete the appropriate screens in the system of record to reflect that the community spouse is now in an institutional setting.
• Restitute for the month after spouse 2's entry if these changes do not process before cutoff. 

J-1540 Spouses Divorce

Revision 12-1; Effective March 1, 2012

If the marriage ends by divorce or annulment in the same month it began, treat the marriage as if it never existed. Otherwise, the end of marriage is effective the month after the month of divorce or annulment.

The SPRA and income diversion are allowed through the month in which the marriage ended. Beginning the month after the marriage ended, consider the institutional spouse as an individual.

Things to Consider

With the end of the marriage, determine if there is a change in the authorized representative who signed the application/redetermination under penalty of perjury. See Section B-3220, Who May Sign an Application for Assistance.

Re-evaluate available assets due to the divorce or annulment. For example:

• pensions could adjust;
• available resource exclusions could change; and
• resources could change due to judges orders.

Co-payment Changes

Complete the appropriate screens in the system of record to reflect the community spouse's change in status. Ensure notice is sent for any co-payment change.

The community spouse was eligible for the income diversion the month of divorce or annulment, but restitution is applicable for subsequent months until the co-payment is corrected. Do not seek restitution for the month the marriage ended. Do restitute for subsequent months until the co-payment is changed in the system of record.

The dependent allowance changes to the SSI FBR when there is no community spouse.