Florida Special Needs Law Blog : Florida Special Needs Lawyer & Attorney : David J. Lillesand : Lillesand & Wolasky Law Firm : Disability, Medicaid, Special Needs Trusts : Miami, Gainesville, Florida

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Congratulations and a  big thank you to our Florida Congressmen, Ander Crenshaw and Kendrick Meek, who have introduced legislation to allow families to plan for their loved ones with some significant tax saings.   Information on the bill follows.  To see the bill in its entirety, click on H.R. 1205.

Disability Savings Accounts

The bipartisan Achieving a Better Life Experience Act of 2009 (ABLE Act), H.R.1205/S. 493, was introduced in both the House and Senate on February 26.  The bills would allow individuals and families to establish special accounts for meeting the future needs of children and adults with disabilities.  Funds in the accounts and expenditures which meet the requirements of the bills would not affect the individuals' eligibility for federal benefits.  Using these accounts, parents would be able to save funds for a child's future in a manner similar to the special "529 accounts" currently used to save for a child's future educational expenses.  The House bill was introduced by Rep. Ander Crenshaw (R-FL) along with Representatives Patrick Kennedy (D-RI), Cathy McMorris Rodgers (R-WA), and Kendrick Meek (D-FL).  The Senate bill was introduced by Senator Robert Casey, Jr. (D-PA) along with Senators Sam Brownback (R-KS), Richard Burr (R-NC), Christopher Dodd (D-CT), Orrin Hatch (R-UT), and Edward Kennedy (D-MA).  The bills were referred to the House Ways and Means and the Energy and Commerce Committees and to the Senate Finance Committee.  The Arc and UCP worked with the sponsors and with other supporting organizations on development of the bills.

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Attached is a TABLE OF SSI DEEMING BREAKEVEN POINTS, that is, how much income a parent of a minor child, a spouse, or a sponsor of an alien, could earn and still have the disabled SSI child, spouse, or alien be eligible for at least $1 of SSI benefits.  Receiving at least $1 of SSI is important in Florida, and 31 other States, since receipt of any amount of SSI benefits triggers full eligibility for Florida Medicaid pursuant to Florida Statute, Section 409.903(2) and SEction 1634 of the federal Social Security Act.

Be careful when using this chart.  Note the limitations on when it cannot be used.  The only way to accurately determine the amount of parents' income, for example, that will cause the loss of SSI benefits is to do a step-by-step calculation using the fairly complicated SSI income rules.  We will post shortly a paper that describes, in detail, with forms, how to do that calculation.  Also note, our firm does these calculations for clients and for bank trust officers who are administrators of Special Needs Trusts.

Call us if you want help.

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There are no clear instructions from the Social Security Administration on whether a trustee of a Special Needs Trust can use a disabled person's d4A Special Needs Trust to support a healthy spouse and dependent children. 

For statutory and policy reasons, we argue, not only can a trustee use a disabled beneficiary's self-settled SNT funds in the appropriate circumstance to support these dependents, but failure to do so may have criminal consequences. 

See our six-page  Thoughtson the matter, attached, which reference the federal and state statutes that apply to this issue.

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An attorney asked us, "How does the Social Security Administration treat Worker's Compensation benefits for SSI eligibility purposes?"  

WC weekly wage replacement payments.  The SSI financial eligiblity rules require that a claimant have low income and few assets, which they call "resources."  Weekly worker's comp wage payments are treated as "unearned income" for SSI monthly income eligibility purposes, and except for a $20 general income disregard, the full amount of the worker's comp payments are subtracted from the potential full SSI benefit of $637.  Thus, an injured worker who receives worker's comp payments of $657 or more in a month, would not be eligible for SSI for that month.  See the SSI federal income regulations on unearned income.  Whether the income stream from WC payments can be irrevocably assigned to a Special Needs Trust, is a matter of state law that varies from state to state.  The SSI POMS at SI 01120.201.J. do NOT list WC payments as income items that cannot be assigned to a trust.

WC Wash-out Settlements.  Sometimes workers "wash out" the settlement, taking a lump sum and foregoing any additional payments from the worker's compensation insurance company.  These settlements can range from a few thousand dollars, to hundreds of thousands, depending on the seriousness of the injury.  The SSI rules would treat the lump sum settlement as "income" in the month received, probably knocking out SSI and SSI-related Medicaid eligibility for the month of receipt of the settlement check.  However, what happens next?  Teh retained funds become a resource (asset) that is usually over the $2,000 limit.  If the worker keeps the settlement money, and the amount is over $2,000, SSI eligibility is lost, and SSI-related Medicaid is lost, UNLESS the worker places the funds in a Special Needs Trust.  A trust will solve the problem.

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The four major programs fall nicely into a Matrix: the two columns are the monthly SSA payments (either RIB/DIB or SSI) which trigger the two major medical programs, Medicare and Medicaid.  The two rows indicate which two programs are insurance-based (RIB/DIB and Medicare) and which two are welfare programs with monthly means-testing for income and assets (SSI and Medicaid).

Some individuals get benefits from all four programs, called "Current Benefits" represented by the circle in the center of the Matrix.

We have attached a full explanation of the eligibility requirements for RIB and DIB, which trigger Medicare health insurance, and for SSI which triggers Medicaid eligibility. 

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Our 18 page booklet, titled "What every personal injury attorney needs to know about SSI, Medicaid and Special Needs Trusts" in Question and Answer format, has been revised to include the latest 2008 federal benefit figures, and developments in Social Security and Florida Medicaid law.