Wisconsin Medicaid - Spousal Impoverishment

“Spousal Impoverishment Protection” refers to special financial provisions in Medicaid for the Elderly, Blind or Disabled (EBD) law. These provisions affect how we count income and assets for certain married couples receiving or applying for nursing home or community waiver services.

Home and Community-Based Waiver programs, such as Family Care, Family Care Partnership, IRIS (Include, Respect, I Self Direct), and PACE (Program of All-Inclusive Care for the Elderly) provide a home care alternative to a nursing home. These protections apply to persons who are elderly or have disabilities.

Medicaid EBD pays for health care and long-term care services for low-income people of all ages. Medicaid EBD is a federally and state-funded government program. To qualify, a person’s income and assets must be below specified levels.

Spousal impoverishment protection affects legally married couples when one spouse is in a nursing home or taking part in a community waiver program and the other spouse is not residing in a nursing home or other medical institution for 30 days or more. The person in the nursing home or the community waiver program is referred to as the “institutionalized spouse.” The other spouse is the “community spouse”.


Counting Assets

There are special rules for counting assets and allocating the assets between the spouses. When you or your spouse first enter a medical institution, nursing home or request a community waiver program, your agency will, if requested, conduct an assessment of your total combined assets. The amount of your total combined assets at the time of institutionalization determines the amount of assets each spouse may keep.

If your combined assets are $100,000 or less, the community spouse can keep $50,000, and the institutionalized spouse may keep $2,000. If your assets are over $100,000 you should contact your agency for help in determining the amount of assets you can keep. The community spouse share can be higher than the standard if a court or administrative hearing officer orders a higher amount.

Assets Transferred Between the Spouses

Once the couple’s assets are at or below their asset limit, they have one year in which to ensure the institutionalized spouse has no more than $2,000 worth of assets in his or her name. During this time period, the institutionalized spouse usually transfers all but $2,000 of his or her assets to the community spouse.

For example: Bob and Carley have $40,000 in a money market account and $10,000 in a checking account. The accounts are in both their names. Bob is the institutionalized spouse, and Carley is the community spouse. The couple spends $1,500 on an adjustable bed for Bob and $20,000 on a newer used car for Carley after 2 trading in their old car. They open a new checking account for Bob and take his name off both the money market and the couple’s checking account. Bob’s new account has $1,000. Carley’s accounts have the remaining $27,500, which is only in her name.

Countable Assets

Examples of countable assets may include, but are not limited to:

  • Cash
  • Checking accounts
  • Life insurance policies
  • Savings accounts
  • Certificates of deposit
  • Real estate
  • Investments
  • Stocks and bonds

Assets Not Counted

Medicaid EBD does not count some assets. Those not counted include:

  • Your home (as long as the community spouse or other dependent relative lives there). 
  • One vehicle.
  • Burial assets (including insurance, some amounts in irrevocable burial trusts, and plots).
  • Household furnishings.
  • Clothing and other personal items.

Reducing Assets to the Allowable Limit

“Excess” assets (assets that are above the asset limit) can be reduced to allowable limits if they are used to pay for nursing home or home care costs or for other things, such as home repairs or improvements, vehicle repair or replacement, clothing, or other household expenses. If excess assets are not reduced, the institutionalized spouse cannot be enrolled in Medicaid.


Divestment is when you or your spouse:

  • Give away income and/or assets for less than fair market value. 
  • Avoid taking income or assets you are entitled to, such as a pension income or an inheritance.
  • Buy certain types of assets, such as a life estate, loan, or annuity. Excess assets usually cannot be reduced by divesting those assets.

Please see the Medicaid for the Elderly, Blind, or Disabled Divestment fact sheet, P-10058, for more information on divestment.


Counting Income

There are special rules for counting income and the amount of income that can be transferred from one spouse to another. Only the institutionalized person’s income is counted in determining enrollment. The community spouse cannot be required to pay for the institutionalized spouse’s care except when there is a court order to do so. 

Income Transferred Between the Spouses

An institutionalized person who qualifies for Medicaid may be allowed to protect some of his or her income by transferring it to the community spouse, depending on the amount of income the community spouse has. The institutionalized person can also transfer income to other dependent family members. To find out the amount that can be transferred, contact your agency.

Income and Asset Limits

The institutionalized spouse must meet the same income and asset tests as a single person applying for Medicaid EBD in a nursing home or community waiver program. The assets directly available to the 3 institutionalized spouse are limited to $2,000. Except for a small personal needs allowance, the institutionalized spouse must either transfer his or her income to the community spouse or use it to pay for nursing home or home care. The spousal impoverishment protection applies only when one spouse is institutionalized and the other is not. If both of you are institutionalized, the single individual income and asset limits apply. The purpose of the spousal impoverishment protection is to prevent the community spouse from being impoverished by his or her spouse’s institutionalization.

Spousal Impoverishment Asset Limits (Total Amount)
Effective January 1, 2021

If the total countable assets of the couple are: Then the community spouse asset share (CSAS) is: Wisconsin Medicaid enrollment limit: (CSAS + $2,000)
$260,760 or more $130,380 $132,380
Less than $260,760 but greater than $100,000 Half of the total countable assets of the couple Half of the total countable assets of the couple + $2,000
$100,000 or less $50,000 $52,000


Spousal Impoverishment Income Allocation and Allowances (Monthly Amounts)
Effective July 1, 2020 and January 1, 2021

Community spouse allocation

The maximum allocation is the lesser of $3,259.50 or $2,873.34, plus an excess shelter allowance.

“Excess shelter allowance” means shelter expenses above $862.00. Shelter expenses are mortgage, rent, taxes, maintenance fees, and a utility allowance.

$862.00 is subtracted from the community spouse’s shelter costs. If there is a remainder, it is added to $3,259.50.

Dependent family member allocation

$718.34 per dependent family member living with the community spouse.

Personal needs allowance (effective 7/1/01)

$45 for institutionalized individuals

Community Waivers Allowance

$974 to $2,382 for a person in a Home and Community-Based Waiver Program

For More Information:

  • Contact a disability benefit specialist or elderly benefit specialist at your local aging and disability resource center (ADRC) or county aging office. To find the specialist in your area, go to FindMyADRC.com or call 800-362-3002.
  • Ask hospital and nursing home staff.
  • Call ForwardHealth Member Services at 800-362-3002 or 711 (TTY).
  • Contact your local agency. To get the address and phone number of your local agency, call 800-362-3002 or go to www.dhs.wisconsin.gov/forwardhealth/resources.htm.

Print-friendly Wisconsin Medicaid Spousal Impoverishment Protection fact sheet, P-10063

Last Revised: January 4, 2021