from an order of the circuit court for Dane County, Cir. Ct.
No. 2017CV1973 RICHARD G. NIESS, Judge.
Neubauer, C.J., Gundrum and Hagedorn, JJ.
The Wisconsin Department of Health Services (Department)
appeals from the circuit court's order concluding that
the monthly payments Christine Tarrant received from a
testamentary trust account did not constitute countable
unearned income when determining her eligibility for medical
assistance. Because we conclude the circuit court erred, we
As a result of her father's death, and during the time
period relevant to this case, Tarrant received $4500 a month
from a testamentary trust created by her father's will.
In January 2017, she applied to renew government-provided
medical assistance. The Department treated the monthly
payments as unearned income, which when combined with her
other income, made her ineligible for medical assistance. As
a result, her applications were denied.
Tarrant appealed the Department's decision. An
administrative law judge agreed with the Department that the
monthly payments constituted unearned income for purposes of
determining medical assistance eligibility and that these
payments made her ineligible for medical assistance. Tarrant
petitioned for review by the circuit court, and the court
reversed the Department's decision. The Department
appeals; we now reverse the decision of the circuit court.
"When a party appeals a circuit court order reviewing a
decision made by an administrative agency, we review the
agency's decision, rather than that of the circuit
court." Newcap, Inc. v. DHS, 2018 WI.App. 40,
¶13, 383 Wis.2d 515, 916 N.W.2d 173. Because there is no
factual dispute in this case, we review de novo the
application of legal authority to the facts. See Estate
of Gonwa v. DHFS, 2003 WI.App. 152, ¶25, 265 Wis.2d
913, 668 N.W.2d 122.
Medical assistance is "aimed at ensuring medical care
for those who cannot pay for their own care."
Id., ¶19. Eligibility for such assistance
"is not a default position that the Department must
rebut but rather a privilege for which the applicant must
prove eligibility." Id., ¶17. Thus, in
this case, Tarrant bore the burden of demonstrating to the
Department that she was eligible for the assistance for which
she applied. We agree with the Department and the ALJ that
she failed to meet that burden.
Eligibility for medical assistance is determined based upon
an individual's "income and resources."
Wis.Stat. § 49.47(4)(a) (2017-18); State of
Georgia, Dep't of Med. Assistance v. Shalala, 8 F.3d
1565, 1566 (11th Cir. 1993) ("Applicants are needy, and
therefore eligible for assistance, depending on what income
and resources are available to them." (citing
Schweiker v. Gray Panthers, 453 U.S. 34, 36
(1981))). "'[I]ncome' includes earned or
unearned income that would be included in determining
eligibility … for the aged … under 42 U.S.C.
[§§] 1381 to 1385 ." Sec. 49.47(4)(c).
"[E]arned income means only" wages, net
self-employment earnings, "remuneration received for
services performed in a sheltered workshop or work activities
center," and royalties. Sec. 1382a(a)(1).
"[U]nearned income means all other income,
including" "support and maintenance" (with
certain exceptions not relevant here); "any payments
received as an annuity, pension, retirement, or disability
benefit"; "prizes and awards"; "payments
to the individual occasioned by the death of another
person" if the payments exceed last illness and burial
costs; "support and alimony payments, and ... gifts
… and inheritances"; "rents, dividends,
interest, and royalties"; "any earnings of, and
additions to, the corpus of a trust established by an
individual ... of which the individual is a
beneficiary"; and certain "payments to or on behalf
of a member of a uniformed service for housing." Sec.
1382a(a)(2). We agree with the Department's position that
the types of income identified in § 1382a(a)(2) as
unearned income are not intended to be a limited list as
unearned income means "all other income,
including" the types specifically identified.
(Emphasis added.) See also 20 C.F.R. § 416.1120
(1994) ("Unearned income is all income that is
not earned income." (emphasis added)); 20 C.F.R. §
416.1121 (1994) (delineating "some types of
unearned income" (emphasis added)); Rosenshein v.
Florida Dep't of Children & Families, 971 So.2d
837, 839 (Fla. Dist. Ct. App. 2007) (concluding that
"the federal statute is not a complete itemization of
every possible type of unearned income" and that
although monthly long-term care insurance payments are not
specifically identified, they are nonetheless
"'countable' unearned income").
Tarrant points out that 42 U.S.C. § 1382a(a)(2)(G)
"expressly identifies Medicaid Qualifying Trust
distributions as countable unearned income" ("any
earnings of, and additions to, the corpus of a trust
established by an individual … of which the individual
is a beneficiary"), and she briefly asserts that the
lack of similar enumeration for testamentary trust payments
suggests such payments do not constitute unearned income. We
disagree. Section 1382a(a)(2)(G), like Wis.Stat. §
49.454, upon which Tarrant also heavily relies, see
infra ¶12, appears to address a very specific type
of trust-self-settled trusts- and provides us with no
indication that adoption of this provision was intended as an
implication that payments from other types of trusts are not
to be considered unearned income. The mildest of implications
subd. (G) may have in this regard is overcome by the
instruction that unearned income means "all other
income" that is not earned income, see §
1382a(a)(2) and 20 C.F.R. § 416.1120, and the similar
nature of the payments Tarrant received to other types of
"payments" and funds considered as unearned income.
For example, although not specifically discussed by the
parties, if the testamentary trust payments Tarrant received
do not directly satisfy the language of the enumerated
"payments … occasioned by the death of another
person" or "inheritances" provisions of §
1382a(a)(2)(D) and (E) respectively, the payments at least
bear much similarity to those types of payments. We see no
reason why Tarrant's testamentary trust payments,
occasioned by her father's passing, should not similarly
be treated as unearned income.
"Income," earned or unearned, "is anything you
receive in cash or in kind that you can use to meet your
needs for food and shelter." 20 C.F.R. § 416.1102
(1994). In addition to other authorizations, the trust in
this case authorized the trustees to pay Tarrant
"reasonable sums" for her "comfort and
well-being" and stated that "[t]his provision shall
be construed liberally." Thus, Tarrant's trust
payments appear to be funds available for her unrestricted
use for her comfort and well-being, and we see no error with
the Department treating these payments as unearned income for
purposes of determining her eligibility for medical
assistance. See State ex rel. DHS v. Trust Co. of
Okla., 890 P.2d 1342, 1347 & n.15, 1349 (Okla. 1995)
(noting "[f]ederal regulations defining income for SSI
provide that income is anything received in cash or in kind
that can be used to meet needs for food, clothing and
shelter" and concluding that disbursements from a trust
"may be income for medical [assistance] eligibility
purposes … if they are utilized to meet" such
needs (citing 20 C.F.R. §§ 416.1102, 416.1103
Wisconsin Stat. § 49.45(34) and Wisconsin case law lead
us to look to the state Medicaid Eligibility Handbook for
additional guidance in determining whether the Department
appropriately included Tarrant's monthly trust payments
in determining her eligibility for medical
assistance. Section 49.45(34) directs that the
Department prepare the handbook and that it be used for
administration of the medical assistance program. Further,
our supreme court has recognized that the handbook "is
consistent with the federal and state legislation regarding
medical assistance," Tannler v. DHSS, 211
Wis.2d 179, 187-88 & n.10, 564 N.W.2d 735 (1997), and has
expressed that "because the … Handbook is