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Tuesday, October 25, 2011

Medicaid, SSI, SN Trust, Oh My!

I will be the first to admit that I have a limited understanding of special needs trusts. I know this is something that we should have set up for Kayla already. We know we need to do this, we know it's important. We've done a little research and attended workshops. I still find it all very overwhelming and somewhat confusing.

The basics of what I understand are that special needs trusts are for individuals with disabilities to help ensure their needs are met. Most people with disabilities rely on some form of government assistance for health, care, housing, food (Medicaid/SSI).

The other basic fact that I've heard, but don't fully understand, is that 'you' (ie person w/disability) can't have more than $2000 in countable assets (even including having a vehicle that was given to them) at any one time. Well they can, but then the amount of benefits they are receiving will be reduced, or they can be disqualified altogether. I'm not sure how the $2000 works - if it's checked at the end of every month or what.

I understand that there has to be rules, regulations and guidelines to receiving benefits/assistance; I understand there should be a real need to use these services ... but to be limited to $2000? Really? That frustrates me. I'm frustrated for Kayla, and a bit pissed off about it too, to be honest.

We want our kids to be as independent as they can be, yet they are being held back by this $2000 limitation. What if Kayla gets a job making enough that she can have more than $2000, but not enough to really live off of without those benefits? It feels like it's set in place to not allow growth and independence.

This affects people with disabilities from getting married, because once they are married their assets are combined and then they lose some, or all, of their benefits.

We teach our kids about the value of a dollar and the importance of saving ... but now I'm supposed to tell Kayla to be careful of how much she saves so she doesn't go over that $2000 mark? Can you imagine not being allowed to save more than $2000?

We can't even leave anything to Kayla in her name, we have to make sure grandparents don't do so either. It has to be left in the name of the special needs trust. Can you imagine having children and being able to name one child as a beneficiary on different accounts but your other child can only be named as a beneficiary on the special needs trust? Kayla can't be listed as a beneficiary on any of Joe's military paperwork. Talk about exclusion.

One of the workshops I went to explained that special needs trusts generally cannot be used for food, clothing, or shelter (or that is when you'll start seeing a reduction in benefits/assistance). "The purpose of this trust is to enhance the beneficiary's enjoyment of life. Typical benefits include lessons, memberships, vacations, and traveling companions." You know what I took away from that? Special needs trusts are basically set up for 'fun money.' I'm sure that's not the intent, but it can't be used for food, clothing, or shelter ... so that's my interpretation.

There are a lot of ins and outs of setting up a special needs trust which is why you need to go to a lawyer who specializes in that; to make sure everything is set up correctly.

In 2009 the Achieving a Better Life Experience Act (ABLE Act) was introduced in the Senate and House of Representatives.

The ABLE Act is to allow individuals with disabilities and families to create tax advantaged savings accounts to meet their long-term ongoing support needs related to education, health care, employment, transportation and housing. S.493 and H.R.1205 would allow an account to be established by or on behalf of an individual with a disability. The income earned on amounts contributed to an ABLE Account is tax exempt. The assets held in an ABLE Account would not be counted for purposes of determining an individual's eligibility to qualify for Social Security, Medicaid or other public benefits.   

A couple of bullet statements from the What is the ABLE Act and What Can it Do For You

Assets held in ABLE Accounts are specifically excluded from the income and assets tests used to determine eligibility.  This includes the current SSI eligibility requirements that prohibit beneficiaries from having over $2000 in assets at any one time.

Individuals with disabilities are discourages from participating in meaningful work, because for the most part, can't save earnings above their asset limits.

Families are discouraged from providing financial support because it may cause individual with disability to be disqualified from Medicaid/SSI.

Individuals with disabilities who don't have a special needs trust must spend those assets they acquire, such as small inheritance, or wages, in order to remain qualified for Medicaid/SSI.

The links on there have a lot of great information on what this can mean for people with disabilities and their families.

I feel there is a tremendous need for something like the ABLE Act to allow our loved ones with disabilities more opportunities to save money (just like any of us) and live more independently... to be afforded the same opportunities that everyone else has.

I hope by the time Kayla reaches adulthood something like this is in place. Contact your state representatives and encourage them to support the ABLE Act. 

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Mom24 said...

Oh Michelle! This seems so senseless! I'm sorry for the ridiculousness of some of our laws.

Iccle Anne said...

Wow, I'm so sorry that your benefit system is set up in such a limiting way. In the UK, if the individual has more than £6,000 in savings then their benefit starts to be deducted.

Is there a government/benefit website that you can look on to give you more advice?

I have a distant cousin with special needs who lives in New York, and she went to live in a group home. Over in the UK, there is a lot more focus towards Supported Living (in their own home/shared home).

Have you ever seen this:

Anonymous said...

Yep that is exactly as it is or what you said... they cannot go over limit of said amt. It is a disgrace to our country that the Gov/'t places such a hardship on people with disabilities. :( love memaw

RK said...

We went through this whole process in the past year and finally have the special needs trust, the family trust, and our wills and powers of attorney and all the rest of the fun.

It was a LONG process, and expensive, honestly, but I'm glad we got through it. I sure need to blog about it, now that I think about it. :o)

Anonymous said...

Maybe this could help? http://kidzorg.blogspot.com/ (today's post)

Sorry about the anonymous posting, still haven't quite figured out how comments work

Anonymous said...

You are right about the injustice. I go thru this with my clients every day- the system is set up to discourage "slackers" and put people thru hurdles and doesn't differentiate between different disabilities. If someone is on SSDI (working disabled) they are allowed as much as they want to save. However, just a correction-on SSI they can own one car and even a home but if either are sold then that is over asset level and they would lose their benefits. Weird eh?
As for the special needs trust- our guy described it as a suitcase that is designed to hold anything that you designate in it - so I would think that an life insurance or benefits that Joe might get from the military just would get left to the trust (so she should be able to be a beneficiary if there is a trust). So in our wills, the house, car , life insurance etc is all left to the trust and our family member is the executor and our lawyer had us write up a letter about what kind of life we wanted for Kayli so that the executor could know how to use it. The trust $ can be used for anything other than basic needs ex tv's, car, cab fare, clothes( beyond the basics), furniture, college,restaurants, Xmas gifts, etc. that is beyond the scope of the SSI (usually about 650ish per month).
We did it, it was a couple thousand for that and the wills and we feel much better about the future. But it is a difficult and very thoughtful process to think about these things.
They require bank statements every so often to check and have you sign forms re: assets.