Authority: IC 12-15-1-10

Affected: IC 12-15

Sec. 17. (a) The income eligibility of an institutionalized applicant or member with a community spouse is determined under 405 IAC 2-1.1-5(g).

(b) If an applicant or a member is determined eligible for Medicaid under subsection (a), posteligibility treatment of income to calculate the amount of income to be paid to the institution is determined as follows:

1. (1) Subtract from the applicant's or member's gross income determined under the ownership provisions set forth in 42 U.S.C.A. 1396r-5(b) those exclusions required by federal law.
2. (2) Subtract a spousal allocation equal to the community spouse's total income, under the ownership provisions set forth in 42 U.S.C.A. 1396r-5(b), subtracted from the sum of nine hundred eighty-four dollars ($984), plus an excess shelter allowance determined under 42 U.S.C.A. 1396r-5(d)(4), subject to the provisions of 42 U.S.C.A. 1396r-5(d), 42 U.S.C.A. 1396r-5(e), and 42 U.S.C.A. 1396r-5(g).
3. (3) Subtract an allocation for each dependent family member, as defined in subsection (d), equal to one-third (1/3) of the amount by which nine hundred eighty-four dollars ($984) exceeds the family member's total income, subject to the provisions of 42 U.S.C.A. 1396r-5(d), 42 U.S.C.A. 1396r-5(e), and 42 U.S.C.A. 1396r-5(g).

(c) The spousal allocation calculated in subsection (b)(2) is deducted from the institutionalized applicant's or member's income only to the extent it is actually made available to, or for the benefit of, the community spouse.

(d) "Dependent family member", for the purpose of determining the allocation in subsection (b)(3), is a person listed, as follows, residing with the community spouse:

1. (1) Biological or adoptive children of either spouse less than twenty-one (21) years of age.

2. (2) Biological or adoptive children of the community or institutionalized spouse who are:

   1. (A) at least twenty-one (21) years of age; and
   2. (B) claimed for tax purposes by either spouse under the Internal Revenue Service Code.
3. (3) The parent or parents of the community or institutionalized spouse claimed as dependents by either spouse for tax purposes under the Internal Revenue Service Code.
4. (4) Biological and adoptive siblings of the community or institutionalized spouse claimed by either spouse for tax purposes under the Internal Revenue Service Code.

(e) A community or an institutionalized spouse may request a finding of exceptional circumstances resulting in significant financial duress, which are those that leave the community spouse unable to pay reasonable bills and expenses. The following requirements apply to a determination of significant financial duress:

1. (1) A demonstration by the spouse that due to exceptional circumstances, the community spouse has unmet needs resulting in significant financial duress.
2. (2) Proof of the community spouse's significant financial duress submitted in writing.

3. (3) In making the finding of significant financial duress, the office may consider the following expenses:

   1. (A) Necessary medical services or other support services, including medical insurance, needed for the community spouse to remain in the community.
   2. (B) Home repairs, including appliances, in the place of residence in which the community spouse resides to maintain the home.
   3. (C) Physician approved items or services determined medically necessary for the spouse to remain in the community.

4. (4) Significant financial duress does not include:

   1. (A) speculative future financial duress of the community spouse;
   2. (B) the desire to make gifts or leave a legacy to family or charities; or
   3. (C) restricting the community spouse's lifestyle, unless it would put them at risk of serious deprivation.
5. (5) A determination of significant financial duress is limited to the duration of the exceptional circumstances. The spouse shall submit proof of continuing exceptional circumstances on an annual basis, during their eligibility redetermination period.
6. (6) Failure to submit proof of continuing exceptional circumstances by the required deadline results in a determination that the exceptional circumstances no longer exist.

(f) A community or an institutionalized spouse dissatisfied with a determination made under 42 U.S.C. 1396r-5(e)(2) may request a hearing.

(g) The request for a fair hearing must comply with the form and time requirements of 405 IAC 1.1-1-3(b) and 405 IAC 1.1-1-3(c). The standards in 405 IAC 1.1-1-3 apply to a fair hearing under subsection (f).

(h) Resulting orders from a state court or administrative proceeding are enforced as follows:

1. (1) For new applications, the support income allocation begins when Medicaid eligibility is established.
2. (2) For members with ongoing Medicaid eligibility, the income allocation is adjusted in the month after the order is submitted to the division of family resources.

(Office of the Secretary of Family and Social Services; 405 IAC 2-3-17; filed Dec 1, 1989, 5:00 p.m.: 13 IR 628; filed May 2, 1990, 4:55 p.m.: 13 IR 1707; filed Aug 9, 1991, 11:00 a.m.: 14 IR 2227; filed May 14, 1992, 5:00 p.m.: 15 IR 2191; filed Feb 16, 1993, 5:00 p.m.: 16 IR 1785; filed Feb 23, 1998, 11:30 a.m.: 21 IR 2383; filed Feb 7, 2000, 3:26 p.m.: 23 IR 1377; errata filed Mar 20, 2000, 3:19 p.m.: 23 IR 2003; readopted filed Jun 27, 2001, 9:40 a.m.: 24 IR 3822; filed Apr 16, 2003, 10:55 a.m.: 26 IR 2867; readopted filed Sep 19, 2007, 12:16 p.m.: 20071010-IR-405070311RFA; readopted filed Oct 28, 2013, 3:18 p.m.: 20131127-IR-405130241RFA; filed Apr 8, 2014, 12:37 p.m.: 20140507-IR-405130533FRA; readopted filed Nov 13, 2019, 11:54 a.m.: 20191211-IR-405190487RFA; filed Jun 11, 2021, 2:35 p.m.: 20210707-IR-405190602FRA; filed Jun 26, 2024, 10:03 a.m.: 20240724-IR-405230819FRA; readopted filed Oct 8, 2025, 3:16 p.m.: 20251105-IR-405240502RFA) NOTE: Transferred from the Division of Family and Children (470 IAC 9.1-3-19) to the Office of the Secretary of Family and Social Services (405 IAC 2-3-17) by P.L.9-1991, SECTION 131, effective January 1, 1992.