The Social Security Administration (SSA) released amendments to the Program Operations Manual System (POMS) this year and changed many of the ways recipients of Supplemental Security Income (SSI), and in some cases Medicaid, can utilize their Special Needs Trusts (SNT).  It’s important to note that this text does not address all the changes to the POMS. However, the purpose of this text is to address some of the most impactful changes to Trust Beneficiaries of Pooled Special Needs Trusts (First and Third Party).  The new POMS are a big win for persons with disabilities as it provides more flexibility to Trustees and individuals living with disabilities across the country.

​Sole Benefit Vs. Primary Benefit

Without providing proper notice, recipients of SSI may terminate eligibility if he/she decides to travel.  This includes taking trips within and outside of the United States.  POMS SI 00501.410 states “an individual is not eligible for SSI benefits for any month during all of which he/she is outside the United States.”  However, the SSI recipient must be out of the country for 30 consecutive days and the day of departure and arrival is not counted towards those days. Please note, there are exceptions for blind and disabled children with a parent stationed outside of the U.S (SI 00501.415).
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How would the Social Security Administration find out if a recipient of SSI travels out of the country for longer than 30 days?

​Did you know that an individual who is at least 18 years old and receives Supplemental Security Income (SSI) due to a disability can attend school and continue to receive SSI benefits as a student? This blog will provide a general overview on how SSI benefits are impacted if a student, who is about at least 18 years of age receives financial aid or other assistance to attend school.

Before addressing this topic, it is important to note that books have been dedicated to this sole topic, and those publications are still not entirely comprehensive.  The purpose of this blog is to simply provide a general overview of what it means to be a Trustee of a Special Needs Trust (SNT).  It is important to note that no rule is absolute when making decisions regarding the administration of an SNT.  Every decision a Trustee makes is based on a multitude of variables such as: prudent investment rules, state Medicaid rules, Social Security Administration’s (SSA) Procedure Operating Manual System (POMS), labor laws, case law, probate codes, etc.
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Overview

What is Deeming and Why Does it Exist?
The most common form of deeming is referred to as Parental deeming.  This is when a parent’s income and/or assets are counted towards the child’s resources when applying or receiving Supplemental Security Income (SSI). This occurs when the child is under the age of 18 and is living in the same household as his/her parents.  Parental deeming still applies if the child is attending school away from the household temporarily and comes home on the weekends, for holidays, school vacations, and/or is still subject to parental control (SI 01320.500).  Additionally, an adopted parent and step-parent’s income if living in the same household still counts towards a child’s eligibility for SSI.  It’s important to note however, that if a child is receiving SSI his/her income and resources do not deem to the parent even though a parent’s income and resources deem to their child (SI 01320.100). 
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According to the Social Security Administrations (SSA) policies as defined by the Program Operating Manual System (POMS), it can be inferred that Parental Deeming exists because it is the responsibility of a parent to care for their child.  However, the SSA recognizes the complexity of these situations, and in a later section we will discuss when parental deeming does not apply.
Another form of deeming is Sponsor-to-Alien deeming (SI 00502.200).  This occurs when an individual sponsors an alien who is entering the United States.  Unlike parental deeming, this form of deeming applies regardless of whether the Alien lives with their sponsor.  However, the rules regarding deemed income and assets are similar to parental deeming, as further described below.  To understand when an alien is eligible for SSI please refer to the POMS labeled SI 00502.200 and the corresponding POMS based on when the Alien applied for immigrate visas or adjustment of status (SI 00502.100, SI 00502.215).

What Income and Assets Deem to the Child or Alien?

The Deficit Reduction Act of 2005, also known as DRA, is a Federal law that grants states the ability to modify their Medicaid programs. This allows individual states to reform their Medicaid programs to fit with the present health care environment while maintaining federal guidelines. In short, it is a Federal law that is implemented in each state differently.

What were the Significant Provisions of the DRA? 
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​If you are an Applicant Attorney or an individual that works extensively with individuals who will be receiving a Workers’ Compensation claim, you are most likely aware of the Hartman Formula. For those who are not familiar with the Hartman Formula, this blog will describe the Hartman Formula and its purpose.
 
According to the Social Security Administration, “the Hartman Formula is a common name for California WC LS settlements that specify life expectancy (LE) rate. Attorneys often characterize settlements using this LE based proration method.” 

​When beneficiaries file taxes they may receive a federal tax refund and even a state refund. According to the federal law, if a beneficiary receives Supplemental Security Income (SSI) and/or Medicaid and receives a federal tax refund, the refund is not counted as income for purposes of his/her benefits as long as it is in his/her name and with his/her associated Social Security Number (SSN). 

A Special Needs Trust (SNT) can pay past debt incurred by beneficiaries. This includes credit card debt or cash loans. This text will address the rules and limitations associated with paying past debt properly. It is important to remember that for a Special Needs Trust to pay a loan, it must be bona fide loan.
 
To be certain a trust can pay for such items the Trust Document must be reviewed, as it governs the proper administration of the Special Needs Trust Account. The Trust Document can have specific limitations on paying for certain items/services, or limitations on how much past debt can be paid. For example, some Special Needs Trusts are drafted to prohibit the purchase of cigarettes, which would then prohibit the Trustee for paying any past debt that went towards paying for cigarettes.
 
What is a Bona Fide Loan Agreement and a Bona Fide Informal Loan?
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What is a Spend Down?
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For an individual receiving Supplemental Security Income (SSI) and/or Medicaid, a “Spend Down” literally refers to spending excess money that he/she receives within a calendar month to maintain eligibility for public benefits.  This is allowable because SSI determines a lump sum of money to be considered income only in the month received if it is spent within that same calendar month (SI 01110.600).  In most states, that means that on the last day of the same calendar month that the funds were received the recipient can have not a penny more than the resource limit, which is generally $2,000 for an unmarried individual and $3,000 for a married couple.  For example, if John Doe, an unmarried individual, is on SSI and receives $28,000 dollars on September 12th, he must spend down his total resources to $2,000 dollars before October 1st.

What Can a Recipient Spend Their Funds On?
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