The Social Security Administration published new POMS, the staff operating manual, on Special Needs Trusts.  As Chair fo the Special Needs Trust Committee of the Florida Bar’s Elder Law Section, I have set a meeting to review the new POMS in detail for March 19th, in Tampa.

Here’s a "CLEAN COPY" of the new 2009 POMS on Trusts.

I also prepared a word-by-word analysis of the 2009 changes from the original 2001 POMS.  Deletions are indicated by striking through the word, and additions by underlining.  See "THE CHANGES HERE."  See also the  5 PAGE MEMORANDUM that highlights the changes.

Generally, the POMS are claimant friendly, although attorneys who do not follow them closely, can cause some significant problems for their clients.  The new POMS specifically approve of child support Special Needs Trusts and Alimony Special Needs Trusts, which will go a long way in ehlping to resolve family law disputes where continued health insurance is an issue.

Although it is like filling out a tax return, it is possible to accurately calculate the amount of parents’ income that will be deemed against a disabled minor child’s SSI and Medicaid eligibility.  The attached ARTICLE ON SSI DEEMING CALCULATIONS explains how.

The FORMS FOR CALCULATING PARENT TO CHILD, and FORMS FOR CALCULATING SPOUSE-TO-SPOUSE deeming are included, along with an EXAMPLE OF CALCULATED DEEMING FOR A CHILD from the article.

Our firm does SSI deeming calculations for individuals and for bank trust officers upon request.

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.

The new 2008 Deeming Chart should be used by banks and other Special Needs Trust Administrators judiciously.  Pay particular attention to the qualifications indicating when the trust may not be used, which appear at the end of the chart.  Also be aware that these numbers increase annually, but a slight amount, due to changes in the SSI Federal Benefit Rate.

However, the chart is definitely useful to indicate approximately how much a parent could be paid, for example, for disabled child caretaking, to stay within the deemed amount that will not eliminate a child’s SSI disability benefits.  In 31 U.S. states and jurisdictions, receipt fo $1 of SSI triggers automatic eligibility for state Medicaid benefits.

The organizers of the Florida State Guardianship Annual Convention asked me to prepare some comments on Social Security, Medicare and Medicaid – It Just Keeps Changing.  The ten page paper highlights changes in how  attorneys and guardians of disabled individuals will have to change the way they interact with SSA, video hearings, “paperless” medical and legal files at SSA, as well as the 2008 changes in Medicare, and changes we are expecting in the SSI POMS that relate to Special Needs Trust administration: new rules on employment by the trustee of parents to care for minor disabled children, support of dependent spouses and minor children using the disabled parent’s trust funds (see our previous post on July 11th), and structured settlement annuity problems, particularly with deeming of healthy parents’ annuities against the disabled child’s continued eligibility for SSI and Medicaid.

If you want more information on guardianship, or the Florida State Guardianship Association and an application for membership, click here.

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.

On May 15, 2008, the California Supreme Court legalized same-sex marriages.  The ruling took effect on June 17, 2008.   On June 6th, the Social Security Administration issued EM-08061, an Emergency Message telling the 61,000 member staff to "wait for instructions" before answering any questions about the effect of the ruling on certain Social Security benefits accorded to spouses.

For example, SSI rules provide that a disabled or elderly person’s financial eligibility for SSI benefits depends on having low income.  Four types of income are considered:  earned (generally, wages or net self-employment income), unearned income (savings accounts and other investment income), in-kind support and maintenance (someone else providing food and shelter), and deemed income, the earnings of a spouse that are regarded as being available to the disabled or elderly spouse.

Will they count the income and resources of a same-sex spouse to deny benefits to a disabled partner? 

The administration has not felt restrained in using the law to the disadvantage of non-traditional heterosexual couples.  For example, most states, like Florida in 1968, abandoned "common law marriage" between a man and a woman.  Indeed, SSA has denied Title II regular SSA spousal retirement or disability benefits to heterosexual partners who did not have a marriage license, but if the person sought Title XVI SSI benefits, denied them on the grounds they were holding out to be a husband and wife.  So basically, SSA said that to get money from us on Social Security taxes you paid, we regard you as NOT married, but to get money from us for SSI benefits, we again deny you but regard you as being married. 

The ruleapplied only to a man and a woman in a "holding out" alleged marital relationship.  It created the anomaly that a heterosexual man and woman holding themselves out to be husband and wife were denied benefits, but a same-sex couple in a husband and wife relationship were approved for SSI. 

Now, will the administration recognize under federal law that benefits should be denied to same-sex couples?   If they deny SSI benefits to same-sex couples, this administration will be admitting that the same-sex couple are "married."  Ah, hoisted on the petard of the Defense of Marriage Act! 

 

…at least for a couple of months.

The general rule for SSI financial eligibility is that an item of income received, is "income in the month received, and becomes a resource (asset) on the first of the following month" if still retained by the disabled or elderly SSI recipient.

However, EM-08029, an Emergency Message to SSA staff, declares that checks received as part of the Economic Stimulus program will not count as income in the month received, and will NOT become a resource for two months more:

 Income

Any payment made to any individual based on this law will not be counted as income for purposes of determining eligibility and payment amount for SSI.

Resources

If the payment is retained by the individual, it will not be counted as a resource for 2 months following the month of receipt. For example, if the individual receives a payment in May 2008, it will be excluded from resources for June 2008 and July 2008. In this example the funds, if retained, would be countable as a resource starting in August 2008.

I doubt poor people will have to wait two months to spend that $600 check.  It’ll be gone in a jiffy paying for that $4.50 per gallon Texas gasoline!

It won’t come up often, but will certainly help in certain situations.  The general rule is that eligibility for SSI disability payments, and SSI-related Medicaid, for minor children depends on the income and assets of the parents, which are "deemed" to be available to the child.  "Parents" include "step-parents."  But only the income and assets of a parent or step-parent who resides with the child are deemed against that child’s eligibility for disability benefits and Medicaid.

An unusual situation arises when the natural parent of a child terminates the relationship with the step-parent, moves out of the family home, but leaves the child living with the step-parent.  For years, SSA’s position was that even where the parent-step-parent relationship ended, the child lost eligibility for SSI disability benefits through deeming of the (former) step-parent.

The courts did not agree.  In Florez v. Callahan, the Second Circuit reversed SSA’s position:

"The plaintiff stepfather took on the care and support of his emotionally disabled stepson after his wife, the child’s mother, abandoned her family. When the stepfather applied for SSI disability benefits on behalf of his stepson, the Social Security Administration….

"Plaintiff, in assuming the sole responsibility of caring for his wife’s child after she left home, shows himself to be a person who plainly believes that in passing through life, any kindness he can show to another must be shown now, and not put off until another day. One would suppose that a social services agency would encourage such a generous attitude. But, the Social Security Administration adopted quite the opposite position and penalized the stepfather by ruling that his income, prior to the child’s entering the psychiatric center, was attributable to the child and thereby reduced the amount of monthly SSI benefits. The stepfather appeals this first ruling, and also appeals a second ruling that interpreted the regulations to authorize a reduced flat-rate payment of SSI benefits once his stepson was admitted to the medical care facility. "

The court reversed SSA’s rule in 1998, at least for residents of the Second Circuit.  On May 15, 2008, the Social Security Administration finally nationalized the rule adopted by the court and issued a new regulation, modifying 20 CFR 416.1160. 

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.