Institutionalized Spouse Gets Deduction for Payment of Alimony

The South Dakota Supreme Court rules that a Medicaid applicant's alimony payments cannot be counted as available income in determining his long-term care benefit. Mulder v. South Dakota Department of Social Services (S.D., No. 22731, Jan. 28, 2004).

Ervin Mulder entered a long-term care facility in August 2001 and applied for Medicaid assistance. Mr. Mulder's only source of income is Social Security. Pursuant to a 1995 divorce judgment, Mr. Mulder pays $180 a month in alimony to his ex-wife. In December 2001, the North Dakota Department of Social Services (DSS) informed Mr. Mulder that he was eligible for Medicaid and what his benefit would be. Because DSS counted the alimony payments as available income, Mr. Mulder was responsible for more of his long-term care bill than he could pay himself. DSS counted the alimony payments because they are so treated under Supplemental Security Income (SSI) eligibility rules, which the state may refer to in the absence of other guidance in making eligibility decisions. The circuit court affirmed DSS, and Mr. Mulder appealed.

The Supreme Court of South Dakota reverses. The court points out that the state statute on which DSS relies concerns eligibility determinations, not benefit determinations. The court also agrees with Mr. Mulder that although it may be reasonable to include support payments in determining eligibility for SSI, it is not reasonable for determining the amount a patient must pay under the state's long-term care provisions. " The purpose of the long term care benefit," the court writes, "is to cover the costs a recipient cannot afford so that the recipient will not be denied long term care. By referring to the SSI regulations, DSS did not recognize that Mulder was effectively denied access to long term care by its income determination. This result is unreasonable in light of the state regulations DSS is required to follow."

For the full text of this decision, go to: https://ujs.sd.gov/Supreme_Court/opiniondetail.aspx?ID=1236

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