The United State Circuit Court of Appeals for the Eight Circuit ruled today in Center v. Olson  that persons age 65 and over cannot place funds in a pooled trust without serving a penalty first.  This decision aligns Medicaid eligibility to the position that the Social Security Administration has taken with regard to maintaining SSI eligibility from the very first rules that come out in 1999.

To read the decision click HERE

Although the decision will impact elders seeking to transfer costs of nursing homes to state Medicaid agencies, it does not prevent disabled persons under age 65 from retaining SSI Disability and SSI-related Medicaid.  SSI payments switch automatically from "disabled" to "elderly" when the disabled individual has his or her 65th birthday.  Assets deposited into an individual or pooled Special Needs Trust prior to age 65 continue to be exempt and will not prevent SSI and SSI-related Medicaid eligibility.

We remain available to attorneys and individuals seeking assistance in attaining SSI and Medicaid eligibility and understanding how this decision may or may not affect them.  David@LillesandLaw.com (727) 330-7895.

We recently were asked whether there were any special protections in federal or state public benefits law that would prevent Special Needs Trust assets and income distributions from them, from being counted in the disabled beneficiary’s ability to pay alimony and child support to his wife and children.

Our response is found here.

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.

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.

I will be presenting at both the Basics and the Advanced sessions of the Stetson College of Law Program on Special Needs Trusts.  This is the 10th Annual program, and has become "the" national program for basic and advanced continuing legal education on Special Needs Trusts.  If you are a professional in the field, either an attorney who drafts Special Needs Trusts, or a Trust Officer who administers them, this is the best program to attend to stay abreast of developments in SNT law.  Here’s the AGENDA and here’s the REGISTRATION information for the October conference.  See you there!