qualifying for medicaid with pooled income trusts

Many people think they cannot qualify for long-term home care (including home health aides) paid for by Community Medicaid because their income is too high. Medicaid does have limits on monthly income, but there is a way to qualify for Medicaid benefits despite having what is commonly referred to as “excess income” or a “spend down.”

The way to qualify is by using a Pooled Income Trust. This is a type of special needs trust that enables a person to remain eligible to receive Medicaid services without forfeiting their excess income to Medicaid.

For 2017, the Medicaid limit is $825 for individuals and $1,209 for a couple. Any income received over this amount is considered “excess income.” If your excess income is deposited into the pooled trust each month, the trust will shelter the funds from Medicaid and you can qualify to receive home care services. The funds deposited in the trust can then be used to pay for your living expenses.

For example:
Karen has $2,500 in monthly income via Social Security and her pension. Medicaid says she can keep only $825. Therefore, her “excess income” is $1,675 ($2,500 – $825). The amount that will be deposited into the pooled trust monthly must be $1,675. This can be done via an electronic funds transfer (EFT), whereby the client authorizes the pooled trust company to pull the funds electronically out of her checking account, so Karen and her family do not even have to worry about the hassle of mailing monthly checks.

Once the pooled trust receives Karen’s funds, she is able to instruct the trust about how to use them. She may ask the trust to pay a portion to her landlord to cover her rent and another portion to her utility company to pay for her gas and electricity charges. Karen will still have the $825 to spend as she wishes. All pooled trusts have fees associated with administration of the account, so be sure to inquire about those before you sign up.

Pooled trusts commonly use clients’ funds to pay for expenses such as rent, mortgage, property taxes, utilities, credit card charges, etc. The distributions from the trust must be for Karen’s benefit only. Therefore, her name must be on all bills submitted and the charges must be for her personal benefit.

By establishing a pooled trust, Karen has retained all of her income (except for the monthly fee from the trust) and can manage her living expenses while her long-term care needs are paid by Medicaid.

Filing for a pooled trust can be complicated and you will want to choose a reliable, trustworthy trust company that pays your bills on time and is responsive to your questions. You will also likely need help in completing the application and ensuring the proper paperwork is filed with the Westchester County (or your local) Department of Social Services. In addition to needing a properly completed application, there is a “disability” requirement associated with enrolling in the trust. There are several forms, including medical records, that also must be filed with the Department of Social Services. You may want to consider having a professional assist you through this process.

(This article was developed in collaboration with LIFE, Inc. Pooled Trust Services, which administers a Medicaid pooled income trust to assist clients with qualifying for Community Medicaid. Get more information at www.lifetrusts.org or by calling 516-374-4564 ext.3.)

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Colin Sandler

Colin Sandler

Colin Sandler, LCSW, CCM, is owner of Medicaid Solutions, 2127 Crompond Road, Cortlandt Manor, NY. She has been providing advice on aging to seniors and their families for over 20 years. Email her at Colin@Medicaidsolutions.com or call 914-924-2566
Colin Sandler

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