Medicaid recipients are required to contribute their “surplus” monthly income to their care provider before they can receive benefits. Specifically, an individual is only entitled to keep a maximum income allowance each month and any monthly income over this amount must be “spent down” before Medicaid will pay for the individual’s care. However, qualified elderly and disabled individuals in need of home care or community services can use all of their excess income to pay for their living expenses by participating in a Pooled Income-Only Trust.
Pooled Income-Only Trusts are a type of Special Needs Trust that is established and managed by not-for-profit, charitable organizations. Elderly and disabled participants contribute their excess income to the Pooled Income-Only Trust to be managed along with other participants’ funds. The money in the participant’s trust account can be used for the participant’s living expenses, including mortgage payments, rent, food, utilities, recreational activities, clothing, etc. Like all Special Needs Trusts, disbursements from the trust are not issued directly to the individual but rather to the provider of the item or service (landlord, mortgagor, retailers, vendors, etc.). Upon the death of the participant, any balance remaining in the participant’s account will be distributed to the not-for-profit, charitable organization that was managing the Pooled Income-Only Trust to further its charitable purposes.
All individuals who qualify as disabled pursuant to Social Security Laws are eligible to establish a Pooled Income-Only Trust. Pooled Income-Only Trusts allow a qualified individual to retain all of his or her income while remaining eligible for Medicaid community benefits. The knowledgeable and experienced attorneys at Cona Elder Law are available to counsel and assist you regarding your eligibility, the completion and execution of the required enrollment forms, funding the trust, and compliance with the Medicaid rules to properly avail the elderly/disabled beneficiary of the trust’s benefits.
You’ve established a Pooled Income-Only Trust and your excess monthly income (for Medicaid purposes) is being deposited to your trust account. What can you, the beneficiary, use that money for?
Each non-profit organization that manages Pooled Income-Only Trusts has its own rules, but generally speaking, the following items are approved expenditures from an individual’s Pooled Income-Only Trust account:
The following items cannot be paid from an individual’s Pooled Income-Only Trust account:
All eligible disbursements must be submitted with a disbursement form and a copy of the bill, invoice, or receipt. Some clients prefer to charge all such expenses to a credit card and simply
submit the credit card bill for payment. Note that these lists are for general information purposes only and are not exhaustive. Other expenses may be approved on a case-by-case Basis.
There are various options available to care for a special needs adult or child, but proper planning is the key to accomplishing your objectives. A pooled-income trust might be just what your family needs.
The skilled attorneys at Cona Elder Law will act as your advocate in the process. We’ll help create a plan so you can rest easier knowing your loved one’s future is secure. Contact us today to get started.
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