SOCIAL SECURITY ADMINISTRATION ISSUES NEW POLICY INTERPRETATION CONCERNING SPECIAL NEEDS TRUSTS

03 Feb SOCIAL SECURITY ADMINISTRATION ISSUES NEW POLICY INTERPRETATION CONCERNING SPECIAL NEEDS TRUSTS

The Social Security Administration (SSA) has issued new policy interpretations in 2014 that affect Special Needs Trusts (trusts created for a disabled person in which the assets held in the trusts are not counted as a resource which would have otherwise resulted in the loss of various Medicaid programs coverage).

Some of the new policy interpretations are as follows:

• Payments to Family Members as Caregivers.  The SSA has determined a Special Needs Trust (SNT) can only pay for family members for caregivers services to a beneficiary if the caregiver is “medically trained” – which means educated to the same level as what would be required if a third party was hired.  There are some 40 hour Medicaid certified courses for certain levels of care that would constitute the family member being properly educated.

•  Payment to Family Members for Travel to Visit Beneficiary.  In 2012, SSA amended their regulations to prohibit a trust from paying for travel of family members (not skilled health care professionals) to visit the beneficiary since it is not for the sole benefit of the beneficiary.  As of 1/1/14, this example was deleted so it is questionable whether a family member could be reimbursed travel expenses.

• Payment to Family Members to Accompany Beneficiary on Vacation.  Similar to the logic in the preceding paragraph, payment to a family member to accompany beneficiary on vacation is a potential violation of the sole benefit rule.  However, a skilled health care professional could have his or her travel paid by the trust when the beneficiary requires such care.

•  UTMA Accounts.  If a minor’s funds are placed in a Uniform Transfers to Minors Act account, then SSA will treat this as if it was self-settled and the resources would count since the UTMA doesn’t have a payback provision as is required by first party SNT.  However, if it is funded with someone else’s assets, then it will not be treated as a resource or asset of the beneficiary (and no payback provision is required).