New York Estate Planning & Elder Law Blog
Social Security Income (SSI) is a needs-based program administered by the Social Security Administration (SSA) to help people with disabilities pay for goods and services. In 2018, SSA made major changes to how Special Needs Trusts (SNT) are set-up and administered. What follows is a brief explanation of the program and the changes implemented beginning in April 2018.
Who is affected?
Approximately 7 million people receive SSI, a needs-based cash benefit to help pay for food and shelter. In 2019 the cash benefit amount for a single person was $771 per month; for couples the monthly cash benefit was $1,157. The cash benefit amount will increase in 2020, with couples scheduled to receive $1,175 per month and individuals $783 per month. For a couple to receive SSI their must be an eligible individual plus an eligible spouse.
How is eligibility determined?
SSI is a needs-based program meaning that individuals who qualify for the assistance have low assets and minimal income. An individual may not own more than $2,000 in countable assets and couples no more than $3,000 in countable assets to be eligible for the cash benefit.
What is a special needs trust or SNT?
SNTs are primarily established to protect persons with disabilities. Families place funds in an SNT to for the care of a loved one. SNTs are important because the funds held in the SNT are excluded from an individual or couple’s countable assets. The goal when establishing a SNT is to provide additional funds to help the disabled person cover his or her monthly living expenses while maintaining the individual’s eligibility for SSI. SSI is an important precursor to other federal programs like Medicaid and Section 8 Housing Assistance.
Where can I find the program rules?
The rules that govern SNTs are established by SSA and can be found in the Social Security’s Program Operations Manual Systems (POMS). See Soc. Sec. Administration, POMS Home Page at https://secure.ssa.gov/apps10/poms.nsf/Home?readform.
What changed?
As stated above, SSA made changes to the establishment and maintenance of SNTs. Specifically, the following policies were changed:
- Revamping of SSA’s Sole Benefit Rule to a More Relaxed Primary Benefit Standard;
- Express Allowance of Payment of Companion Services and Caregiving Expenses;
- Relaxation of Standards on Payment of Third-Party Travel
- Expenses to Enable Individuals to Accompany a Trust Beneficiary;
- Authorization of Payment of Third-Party Travel Expenses in Other Situations;
- Addition of New Special Needs Trust Distribution Method Administrator-Managed Prepaid Cards;
- Authorization of Transfers From a Special Needs Trust to an ABLE Account;
- Requirement That Beneficiary of First-Party Special Needs Trust Be Disabled When Application for Means-Tested Benefits Is Made; and
- Creation of a Better Procedure to Amend Disqualifying Special Needs Trusts.
Remember, all new trusts must be established using these revised rules.