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Load image. Select the smudge tool and smudge everything except the person on the image. I like to smudge down and then to the sides a little bit.

Duplicate the background layer [the picture with the smuged background]. Click on the Background Copy layer. Go to Filter-> Blur-> Gaussian Blur. Set the radius to 5.0 pixels. It should now look somewhat like this:

Set blend mode to Overlay. You can do this by using the drop-down menu in the layers box or right-clicking your Background Copy layer and selecting Blending Options. A box will pop up. In there select Overlay in the drop-down menu names Blending Mode.

Done! You have a beautiful image with ilumination and a blurred background which puts all the focus on the person.