Court of Appeals rejects "income first" rule

June 21, 2000

In Blumer v. Department of Health and Family Services, the Court of Appeals rejected the "income first" rule for calculating the Community Spouse Resource Allowance (CSRA) in Medical Assistance cases.

While the maximum CSRA is normally the lesser of one-half of the couple's assets or $84,120, the statute allows for an increase if the CSRA doesn't generate sufficient income for the Community Spouse. The question was whether the income of the institutionalized spouse first had to be allocated to the community spouse before the CSRA could be increased to the point where it generated sufficient income for the community spouse. This is the "income first" rule.

In Blumer, the Court of Appeals held that DHFS must look only to the income of the community spouse, without considering the income of the institutionalized spouse, to determine whether the CSRA should be increased.

If this decision stands, then in many cases (particularly when the community spouse is a wive) it should be easier to protect a larger amount of the combined estate to meet the needs of the community spouse.