When a senior or disabled individual is receiving Medicaid home care benefits, he/she is entitled to retain $720 of monthly income. In addition to the $720, the individual may retain enough income to pay any additional medical expenses, including health insurance premiums. The excess over and above these amounts is known as “surplus income” and must be paid to the home care agency on a monthly basis unless further planning is effectuated.
Of course, most individuals have difficulty paying for their living expenses on only $720 per month. Rent on a New York City apartment alone often far exceeds such amount. Fortunately, there is a means by which individuals may have their monthly expenses paid from their surplus income.
An individual's surplus income may be transferred to what is known as a “pooled trust.” A pooled trust is one of the trusts established as an exception to Medicaid rules. A disabled individual of any age may transfer assets/income to a pooled trust without any affect on home care/community Medicaid benefits. However, only a disabled individual under 65 years of age may transfer assets to a pooled trust without incurring any period of ineligibility for Medicaid nursing home benefits.
Pooled trusts were established by nonprofit organizations such as UJA and NYSARC. The organization holds the beneficiary's funds in a sub account and pays the expenses that are verified by receipts and documentation. The individual's family does not have discretion to access funds as it would with other types of trusts. However, transfers of income to a pooled trust permit a senior to receive Medicaid home care benefits and to pay for his or her living expenses that exceed $720 per month.
Hence, an individual living at home may transfer his or her surplus income to the trust on a monthly basis, and the trust administrator will pay for expenses such as rent, food, etc. Upon the death of the beneficiary, the assets remaining in the trust will pass either to Medicaid or to the organization.
Because transfers of income to the pooled trust may only be made by disabled recipients, Medicaid has developed a new procedure for verifying a recipient's disability. A State Disability Review Team in Albany makes all disability determinations for individuals 65 or older with pooled trusts. A package, including medical forms signed by a doctor, must be submitted to Medicaid. Home care recipients submit the ancillary forms through their local Medicaid office, known as the “CASA” in New York City.
The process is somewhat convoluted and assistance should be sought from a qualified elder law professional. If done the proper way, the senior can continue living in the community without losing monthly income necessary to meet monthly expenses.
Ronald A. Fatoullah, Esq. is the principal of Ronald Fatoullah & Associates, a law firm that concentrates in elder law, estate planning, Medicaid planning, guardianships, estate administration, trusts and wills. The firm has offices in Forest Hills, Great Neck, and Brooklyn, NY. Mr. Fatoullah has been named a “fellow” of the National Academy of Elder Law Attorneys and is a former member of its Board of Directors. He also serves on the Executive Committee of the Elder Law Section of the New York State Bar Association. Mr. Fatoullah has been certified as an Elder Law Attorney by the National Elder Law Foundation. Mr. Fatoullah currently chairs the legal committee of the Alzheimer's Association, LI Chapter and is a co-founder of Senior Umbrella Network of Queens. This article was written with the assistance of Stacey Meshnick, Esq., who is a senior staff attorney at the firm and supervises its Medicaid Department. The firm can be reached by calling 718-261-1700 or 516-466-4422 or toll free at 1-877-ELDER-LAW or 1-877-ESTATES.
*Certified as an Elder Law Attorney by the National Elder Law Foundation.