Increasing the Community Spouse Income Allowance Through Judicial Process: What Standard Applies?
The community spouse of a Medicaid recipient, specifically a recipient of the Insti-
tutionalized Care Benefit Program, is entitled to a minimum monthly maintenance needs allowance of $1,295 per month currently. Under Department of Health and Rehabilitative Services guidelines, the maximum community spouse income allowance, comprised of the minimum monthly maintenance needs allowance (MMMNA) and an excess shelter award, cannot exceed $1,919 per month. Notwithstanding, the law does provide that either spouse may appeal the amount of the income allowance through the fair hearing process,1 and the allowance can be adjusted if the couple presents convincing proof that exceptional circumstances resulting in significant financial duress exist. 42 USC §1396r-5(e)(2)(B) (1994); Fla. Admin. Code r. 10C-8.0183(10). One route, therefore, to increase the community spouse income allowance is to utilize the administrative fair hearing process by demonstrating “exceptional circumstances” which warrant the increase.2
The other method for increasing the community spouse income allowance is to seek a judicial order of support. Federal law provides: “If a court has entered an order against an institutionalized spouse for monthly income for the support of the community spouse, the community spouse monthly income allowance for the spouse shall be not less than the amount of the monthly income so ordered.” 42 USC §1396(r)-5(d)(5)(1994). Florida has codified this provision in its administrative code by simply stating “the community spouse income allowance cannot be less than any court-ordered support.” Fla. Admin. Code r. 10C-8.0183(9). And the applicable HRS regulation states “if there is court-ordered support against an institutionalized spouse (for monthly support income for the community spouse), the community spouse’s monthly income allowance cannot be less than the amount ordered. HRSM 165-22U 2605.35.15.10 (April 1, 1995). Consequently, it is very clear that courts, like administrative agencies, have the authority to set a community spouse income allowance in excess of the $1,919 per month. However, there is no legislative provision indicating what factors should be considered by the court when reviewing a petition for monthly support from the community spouse.
New York courts have recently addressed this issue. In Gombrecht v. Sabol, 86 N.Y.2d 47 (1995), the community spouse petitioned the court for an increase in the monthly income allowance. The hearing examiner awarded the community spouse income of $3,339.26 per month based upon her standard of living and lifestyle prior to her husband’s institutionalization. The hearing officer’s findings were confirmed by the family court which concluded that family courts were not bound by the statutory medical eligibility levels contained in the social services legislation. The family court held that it had discretion to grant support where it deemed appropriate based upon the circumstances before it. The appellate division affirmed and the court of appeals reversed, stating: “Although the statute provides an option to individuals seeking an increase in monthly support, such individuals are not entitled to an award of support greater in Family Court than that permitted by Social Services Law. . . under the fair hearing process.” Id. at 51.
The court explained that the intent of the social services legislation was to prevent the pauperization of the community spouse by assuring that the spouse had sufficient, not excessive, income. The court also noted that even under the Family Court Act, the fact that one spouse is institutionalized at public expense is a factor to be considered. The court ultimately concluded that the only way a community spouse could receive an amount other than the MMMNA is by showing “exceptional circumstances.”3 As no showing of exceptional circumstances was made by the community spouse, the court reversed the order of support.
In response to the Gombrecht decision, suit was filed in the federal district court seeking to enjoin the New York state courts from applying the “exceptional circumstances” standard. Jenkins v. Fields, No. 95 CIV.9603 (JSM), 1996 WL 221614 (S.D.N.Y. May 1, 1996). Contending that the Gom- brecht ruling violated federal law, the Jenkins’ plaintiffs argued that Congress had intended state court support orders to be based on a less demanding standard than the exceptional circumstances standard found in the fair hearing process. Defendants argued that Congress’ intent was merely to permit state courts, if they chose, to implement a more generous state-created standard. After careful analysis of both positions, the Jenkins court ultimately sided with the defendants, explaining: “[Section] 1396r-5(d)(5) appears to be intended to do no more than permit State courts to apply a more lenient standard in support proceedings in State courts if they chose to do.” Jenkins at *6.
In Florida, separate maintenance and support unconnected with dissolution is governed by F.S. §61.09 (1995), which provides:
If a person having the ability to contribute to the maintenance of his spouse. . . fails to do so, the spouse who is not receiving support. . . may apply to the court for alimony. . . without seeking dissolution of marriage, and the court shall enter an order as it deems just and proper. (Emphasis supplied.)
The Fourth District Court of Appeal has held that the amount of a spousal support award is determined by the same rule as in a dissolution action, i.e., the need of the petitioning spouse and the ability of the responding spouse to pay. Campbell v. Campbell, 220 So. 2d 920 (Fla. 4th DCA 1969). Campbell, however, is factually inapposite to the circumstances discussed in this article.
The only Florida decision which touches upon this issue in a somewhat similar factual circumstance is Crider v. HRS, 555 So. 2d 408 (Fla. 1st DCA 1989), a pre-OBRA 1993 decision. In Crider, the appellant applied for benefits under the state Medicaid Institutionalized Care Program (ICP). Shortly after submitting his application, a court entered a temporary support order awarding support to the community spouse. The amount of support awarded would have reduced the appellant’s gross income to an amount below the Florida and federal income cap, thereby allowing the appellant to qualify for the ICP program. HRS rejected the support order and determined that the appellant was not eligible.
On appeal, the First District was called to address the narrow issue of whether HRS’ decision was arbitrary and capricious. The First District expressly declined to review any broader issues as there was essentially no record of the trial court and administrative proceedings, and the briefing was “extremely modest and limited.” Crider, 555 So. 2d at 411. The court was particularly distressed that there was no evidence to indicate that the appellant had been ordered to pay support after an adjudication by the trial court. Specifically, the court noted that no evidence indicated that the trial court considered the factors under §61.09, to-wit the relative needs and financial circumstances of the parties.
Thus Crider, albeit in dicta, does provide some indication that support unconnected with dissolution in the context of support ordered from an institutionalized spouse will be reviewed under the traditional §61.09 analysis. The Crider court, however, would have had great difficulty in upholding the support award under that analysis as it wrote:
[A]lthough we acknowledge the trial court’s considerable discretion under the statute to award such amount as it deems “just and proper,” appellant would be hard pressed to satisfactorily explain how this 82-year-old institutionalized applicant could realistically be found to have “ability to contribute” an amount which left him with only “$696.90 for his own subsistence and medical needs.”
Crider, 555 So. 2d at 411.
As an interesting aside, the Crider court appeared to conclude that HRS was able to ignore the support order as it was not validly adjudicated. This conclusion permitted the First District to neatly sidestep the constitutional separation of powers issue raised by appellant. Practitioners, however, have since learned from the Crider decision, and support orders will be presumably entered only after the issue has been properly adjudicated before the trial court. Consequently, if HRS rejects a validly adjudicated support order, the First District may not so readily sidestep this thorny constitutional issue in the future.
At this point, although it may appear from the available authority that Florida will apply the “need and ability to pay standard,” this author perceives several obstacles for those who proceed to file support petitions strictly on the basis of need and ability to pay. First, as indicated by the Crider (and Gombrecht) court, the trial court might simply reject the proof offered, taking due notice of the fact that readily impoverishing the institutionalized spouse only increases public expenditures. Second, and perhaps of more concern, it is very likely that given the Crider decision and current budgetary constraints, HRS will, at least initially, attempt to reject orders not to its liking, i.e., those that apply only a “need and ability to pay” analysis. And further, although the Gombrecht and Jenkins decisions are not binding in Florida, one must at least be prepared to distinguish their rationale in any appellate proceeding challenging an order based solely upon the factors in §61.09.
Given the difficulties perceived with filing solely under the standard articulated in §61.09, this author decided to plead and prove both “exceptional circumstances” and “need and ability to pay” in a recent support proceeding before the 19th Judicial Circuit. The final order granting the requested support contained specific factual findings with regard to both standards. As HRS accepted the support order, this author strongly recommends this strategy be employed whenever possible.4 q
1 See generally Kennard Bennett, Fair Hearings: What They Are and How To Handle Them, 9 NAELA Q. #2 (Spring 1996).
2 Exceptional circumstances is a somewhat stringent standard and has been defined by a New York court as one caused by financial hardship that is thrust upon the community spouse by circumstances over which he or she has no control, such as extraordinary medical expenses, the need to preserve the homestead or the need to preserve an income-producing asset. Schach- ner v. Perales, 85 N.Y.2d 316 (1995). Paying for the college education of a child is not considered an exceptional circumstance. Id.
3 See note 2 supra.
4 HRS raised two issues prior to recognizing the support order: 1) It attempted to reduce the amount awarded by contending that the support ordered was the MMMNA, instead of the actual income allowance, and therefore subject to the community spouse income allowance calculation contained at HRSM 165-22U 2605.35.15.10 (April 1, 1995). This argument was successfully repelled with appropriate citation to legislative authority contained in this article. 2) It required that the order contain the words “irrevocable and payable directly to the community spouse.” The words were apparently required upon reference to a dated Health Care Administration letter concerning alimony and child support. The viability of HRS’ position with regard to this second point is well beyond the scope of this article. This author recommends that the support order contain these “magic words” unless good reason exists for their exclusion.
Nicola Jaye Boone graduated magna cum laude from Stetson University College of Law in 1992 and summa cum laude from the University of New Haven, New Haven, Connecticut, in 1989. She practices elder law in Stuart, is a member of the National Academy of Elder Law Attorneys, and is an active member of the Elder Law Section of The Florida Bar.
This column is submitted on behalf of the Elder Law Section, Richard C. Milstein, chair, and Kenneth S. Rubin, editor.
