Prevention of Spousal Impoverishment
The Prevention of Spousal Impoverishment (or PSI program) is designed to prevent the impoverishment of a family, usually a couple, when one spouse needs long term care, either in a nursing home or in-home services through the Illinois Community Care Program. The PSI program allows the spouse at home and not receiving in-home services to keep a larger share of the family's assets and income rather than spending all or most if it for the care of the ill spouse. Many senior adults use Medicaid to pay for their long term care costs.
Instead of having to spend down a couples assets and income on the long term care of the ill spouse before he/she qualifies for Medicaid, the PSI program allows the couple to transfer a portion of the family assets and income to the spouse not receiving long term care in order for him or her to have more financial comfort while remaining in the family home. The transferred assets and income become the sole property of the spouse not receiving long term care and the remaining amounts of family assets and income, if any, are spent down to pay for the long term care of the ill spouse.
Also, some assets are exempt from the spend down requirement. Exempt assets include homestead property, most personal effects and household furnishings, a car under some circumstances, some of the cash value of life insurance and/or burial funds up to a certain combined amount, and some trust funds.
Medicaid is a government program that pays for health care expenses, including long term care, when individuals don't have enough resources to pay the full amount themselves. Many senior adults receive assistance through Medicaid to help pay the cost of nursing home care or care through the Illinois Department on Aging Community Care Program. In Illinois, Medicaid is administered by the Department of Human Services.
Nursing Home Costs
Medicare, which is different from Medicaid, only pays for short-term, skilled care in nursing homes but not care that is needed long-term.
Eligibility for PSI and Other Information
The maximum amount of both income and assets that can be transferred to the spouse changes annually in Illinois. Use this link for the current figures.
Gifts or transfer of property to anyone other than the spouse may be considered non-allowable and result in penalties such as not being able to receive financial assistance for long term care through Medicaid for a length of time. To determine eligibility for Medicaid, the Illinois Department of Human Services looks back over the last 36 months at transfers, 60 months for transfers of assets from some trusts. These rules are complex, as some types of gifts and transfers are allowable under certain circumstances. It is best to consult with a knowledgeable attorney or ask the Department of Human Services for information.
No. Some senior adults may choose not to transfer assets to their current spouse for various reasons, particularly if the ill spouse has children from a previous marriage and wants to leave his/her assets in his/her name in order for his/her own children to inherit them.
If the spouse who is ill receives financial assistance through Medicaid, the State has a right to recover the taxpayers money used for his/her care through estate recovery claims and liens. Questions about estate recovery should be addressed to an attorney. The Department of Human Services may also provide this information.
In Illinois, call or visit the county office of the Department of Human Services and ask about the PSI program.
Although this information gives a broad description of the program, by no means does it contains all the information someone needs to make an informed decision, especially if there is a large amount of assets or income involved. Ask questions of the Department of Human Services and/or from a knowledgeable attorney who practices Medicaid law. Don't make these decisions without understanding all of the implications of your actions.
For assistance with other programs, call the Illinois Department on Aging Senior HelpLine toll-free at 1.800.252.8966 (voice and TTY) between 8:30 a.m. and 5:00 p.m. central time Monday through Friday or use the link below to Contact the Egyptian Area Agency on Aging.
Also, see the Rights of People Living in Nursing Homes.
Return to Medicare Information
Return to Government Programs- Eligibility Guidelines
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