Securing SSI & Other Government Benefits. Fletcher Tilton, Attorneys at Law Terry Monkaba, MBA

Transcription

1 Securing SSI & Other Government Benefits Fletcher Tilton, Attorneys at Law Terry Monkaba, MBA

2 Introduction to Social Security Benefits That Are Available to Persons with Disabilities If you are disabled and incapable of substantial gainful activity, you may be eligible for either Supplemental Security Income (SSI) or Social Security Disability Income (SSDI). Both of these programs pay money to persons who are disabled and incapable of substantial gainful activity (as of 2009 substantial gainful activity is defined as the ability to earn $980 or more per month in earned income. For persons who are blind, substantial gainful activity is defined as the ability to earn $1,640 or more per month). If you have a physical or mental impairment which prevents you from doing any work that will enable you to earn at least $980 per month you may be eligible to apply for SSI. If your disability prevents you from earning more than $980 per month ($1,640 for persons who are blind) and you have paid into Social Security for a sufficient number of quarters, you may be eligible to apply for SSDI. Requirements for SSDI & SSI SSDI Requirements: In addition to being disabled, an individual applying for SSDI must have worked and paid into social security for a minimum number of work quarters, if she/he is drawing on his or her own social security account (the minimum number of quarters is determined by one s age and the number of years she/he worked prior to becoming disabled). There is no deeming of one s assets (i.e. you will not be asked questions about bank accounts, savings bonds, etc.) in order to determine eligibility for SSDI. All that is required is that the individual is disabled and is no longer capable of substantial gainful employment, and has paid into social security for the required number of quarters if she/he is drawing on his or her own account. An individual may also be able to collect SSDI under his or her parent s work record. If an adult child was disabled prior to the age of 22, is single and is incapable of substantial gainful employment s/he may qualify as a Disabled Adult Child (DAC). In order to collect as a DAC on a parent s work record, the parent must have died, retired or become disabled. In other words, a dependant adult child can collect SSDI based on his or her parent s work record only if the parent is eligible for social security administration benefits. For more information, visit us at: The Guaranty Building 370 Main Street, 12 th Floor Worcester, MA The Meadows 161 Worcester Road, Suite 501 Framingham, MA Cape Cod 171 Main Street Hyannis, MA

3 SSI Requirements: SSI requires that in addition to a person being disabled and incapable of gainful employment, she/he must be poor and have very little income and very few resources. The following is a list of resources that an individual is allowed to retain and still be eligible for SSI: savings accounts to a maximum of $2,000 for a single person or $3,000 for a couple; life insurance with a face value of up to $1,500; burial plots for you and your immediate family; burial funds up to $1,500 for you and $1,500 for your spouse; your car, of reasonable value so long as it is used for your or a member of your household s transportation needs; furniture and household goods of reasonable value for a single adult (in Massachusetts there is no limit on the amount of furniture and household goods); your house, regardless of its value, if you live there and do not receive any income from it. In addition, Social Security does not count the following income in deciding SSI eligibility: the first $20 per month of most income from any source; the first $65 per month of most earned income, and half of any earned income; more than $65 per month; food stamps; home energy assistance under certain conditions; food, clothing, and shelter from certain non-profit organizations approved by your local Social Security office. There are other ways you can maximize the amount of money you receive under SSI. These include being knowledgeable about deductions allowed for IMPAIRMENT RELATED EXPENSES and about SSI s DEEMING requirements if you are living in the home of another and you are receiving free or in kind support. The following is a more detailed explanation of each. Impairment related work expenses are those costs for services and items that a person needs in order to work. The costs for these items and services must be paid by the individual with a disability and not be a cost that is reimbursable by Medicare, Medicaid or private insurance. Examples of impairment-related expenses are as follows: 1. Attendant care services 2. Transportation costs 3. Medical devices 4. Prosthesis 5. Work related equipment or services (such as hearing aids, page turning devices, telecommunications devices for the deaf, seeing eye dog, medical supplies such as elastic stockings, catheters, incontinence pads) Once you are found eligible for either SSI or SSDI, your eligibility may be reviewed every year or every 3 years if there is an expectation that your disabling condition may improve over time. Even if you have a long term disability, SSI requires your case For more information visit us at

4 be reviewed every 5-7 years to determine that you still meet the eligibility criteria. The amount of SSDI you receive depends upon the number of years you worked and paid into social security, the rate of pay, and your age when you became disabled. The amount of money you receive under SSI is limited to a maximum of $674 per month as of January 1, 2009 ($1,011 per month for a couple), except in those states that supplements the Federal SSI payment. One-Third Reduction Rule for In-Kind Support SSI will decrease the amount you receive by one-third if it is determined that you are receiving in-kind support from your parents or a friend or relative. If you are living in the home of another and they are not charging you room and board, then SSI assumes that your parents are making a voluntary contribution toward your support. Regardless of the dollar value of this, in kind support, SSI regulations deem this in kind support to be equal to one-third of your SST payment and reduce your payment in kind. In order to avoid losing one-third of your SSI check you must be able to show that you are either paying rent or contributing your fair share toward the costs of maintaining your household. To determine whether or not you are paying your fair share of your household s expenses, SSI officials will require you to itemize your household s expenses and divide those expenses by the number of people living in the home. Household expenses include total monthly expenditures for food, rent, mortgage, property taxes, heating fuel, gas, electricity, water, sewerage and garbage collection. If the amount of expenses divided by the number of people in the home is less than an amount you are capable of paying from your own income, SSI will allow you to keep your whole SSI check. If the amount is greater than the amount you receive in earnings and SSI benefits (even if only over by a few dollars), SSI will deem this excess amount as a voluntary contribution toward your support, and will reduce the SSI check by one-third. Medicaid Buy-In under the Ticket to Work & Work Incentives Improvement Act of 1999 Recipients of SSI or SSDI who are interested in working may now be able to do so without the fear of losing comprehensive health care coverage under Medicaid and Medicare. The Ticket to Work and Work Incentives Improvement Act (TWWIIA) of 1999 allows states to establish additional options for Medicaid eligibility. One important element of this buy-in option is to give states the option of providing Medicaid coverage to individuals who would be eligible for SSI based on their disability, but who are working and ineligible because of earned income. TWWIA removes the income ceiling established under the Balanced Budget Act of 1997 and provides states with wide authority to establish both income standards and resource standards for participation. A person who is employed can access continued coverage by Medicaid, even if she/he has a higher income and more assets than Medicaid normally allows, by buying into the program through cost sharing measures based on income level. Your family size determines the income you can have and still be eligible. For more information visit us at

5 The cost sharing measures are usually in the form of premiums paid to the state s Medicaid program. Under TWWIIA, an employed individual with a disability may apply for Medicaid even if she/he was previously ineligible because of their income level. Appeal Process If you are denied eligibility for either SSI or SSDI, you can appeal this decision. Instructions on how to file an appeal are given on the back of your notice of denial from Social Security. You will have a much greater chance of winning an appeal if you consult an attorney, advocate or other professional who is familiar with Social Security Regulations and appeal procedures. Some attorneys will accept your case on a contingency fee arrangement. That is, they will get paid only if they win your appeal and will accept 25% of your back payment as full payment for their legal fees. It is important to know that while you have 60 days to appeal, you must appeal within 10 days if you want your benefits to continue throughout the appeals process. This is critical for persons who are dependent on their check for basic care, shelter and support. It may take over a year to receive a hearing and if you do not appeal within 10 days, your benefits will not resume until after a final decision is reached. This material is intended to offer general information to clients, and potential clients, of the firm, which information is current to the best of our knowledge on the date indicated below. The information is general and should not be treated as specific legal advice applicable to a particular situation. Fletcher Tilton PC assumes no responsibility for any individual s reliance on the information disseminated unless, of course, that reliance is as a result of the firm s specific recommendation made to a client as part of our representation of the client. Please note that changes in the law occur and that information contained herein may need to be reverified from time to time to ensure it is still current. This information was last updated May, If you would like to learn more about Fletcher Tilton s Elder Law & Special Needs Practice Group, contact: Frederick Misilo, Jr., Practice Group Leader For more information visit us at

6 Government Benefits for Persons Who Are Disabled What s Inside? Government Benefits Not Based of Financial Need Programs Based on Financial Need Services for Children with Special Health Needs Fee for Service Programs The purpose of this handout is to provide you with the information about government benefits that will be helpful to you and your lawyer in planning for your child s future. In addition to trust and estate planning skills, your lawyer needs to have an understanding of the problems of disabling conditions, the interests of the person with a disability, and a familiarity with state and federal entitlement programs upon which the person may depend for lifetime care. The estate planner needs to develop an estate plan that is flexible and able to respond to future changes in the family member s condition as well as changes in federal and state entitlement and reimbursement regulations. Nowhere is this analysis regarding future impact more important than in the actual selection of method used in one s estate plan. For example, the selection of an outright gift as opposed to an absolute discretionary spendthrift trust person s welfare. This is due to his or her need to remain eligible for government benefits. The primary goal of estate planning is usually to avoid federal and local estate taxes. This goal becomes secondary when planning the estate of a family with a dependent who is disabled, who will need state and federal benefits for his/her lifetime care. The need to avoid the loss of state and federal benefits and the need to protect the family s assets from state reimbursement claims for providing services to the person are the primary goals for estate planning for families with members who are disabled. The Guaranty Building 370 Main Street, 12 th Floor Worcester, MA For more information, visit us at: may have a lifetime effect on the The Meadows 161 Worcester Road, Suite 501 Framingham, MA Cape Cod 171 Main Street Hyannis, MA

7 Estate Planning to Ensure Eligibility It is likely that at some point in his or her life, a person with a disability will need government benefits such as SSI, Medicaid, residential, training or support services. Parents need to plan their estate so that their child does not become ineligible for government benefits that have minimum income and resources eligibility requirements. Parents need to realize that without careful planning, an inheritance may make their child ineligible for disability benefits which can be far more valuable than the inheritance. In some cases, the more a person inherits, the worse off he or she may be! Government benefits are important because it is seldom possible for the average family to leave sufficient funds to care for their dependent s lifetime care. The cost of care will vary tremendously depending on the area in which the individual lives and the nature and degree of the individual s disability. It is difficult to predict what the costs of care will be twenty or thirty years from now. To ensure that the beneficiary will not risk his or her eligibility for government benefits should he or she need them, it is important for the estate planner to become familiar with and understand the various means tests and reimbursement requirements for services in their state. These eligibility requirements are discussed in the following sections. Government Benefits Not Based On Financial Need The first category includes insurance programs which are not based on financial need. The major insurance programs in this category are Social Security Disability Income (SSDI) and Medicare. A child of a person who is retired, disabled or deceased can collect monthly cash benefits based on the parent s earnings provided that his or her disability began before the age of 22, he or she is unmarried and is dependent for support on the parent who is retired, disabled or deceased. Disability is defined as the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve months. Your child need not have worked under Social Security to be eligible. A person who receives Social Security disability benefits for two years is entitled to Medicare hospital and medical coverage. The advantage of Social Security benefits is that the benefits are not reduced or affected by the person s assets. Programs Based on Financial Need The second category of programs is based upon the individual s financial need. The two most important programs in this category are Supplemental Security Income (SSI) for the aged, the blind, and persons with disabilities and Medical Assistance, which is referred to as Medicaid. It is important for parents to realize that eligibility for SSI and Medicaid may be critical to an individual who is disabled because SSI and Medicaid eligibility is often necessary to be entitled for other services. For example, group homes and community residences are For more information visit us at To join our Real Homes, Real Solutions forum, visit us at:

8 funded in several states by SSI benefits or by Medicaid benefits. Some parents may feel that they do not have to be concerned with federal medical assistance because their adult child is covered with a private health insurance policy. Often the coverage in programs that insure persons who are disabled is minimal and the cost for private medical coverage may be prohibitive in the future. In some cases, the child presently has medical insurance, but upon the death or retirement of the parent, his or her medical coverage may terminate. Many parents are not aware that they can continue their group plan health care coverage for their dependent adult child after their child graduates or leaves school. You will need to check with your personnel department to see if your company health insurance plan has this option available. Most companies require that you notify them within 3 months of your child s 19th birthday that s/he is disabled and is dependent on you for care. If you do not notify your health insurance carrier of your child s special needs, they may drop your child from your coverage. Medicaid Medicaid is used to fund group homes and some rehabilitation services. In 1971, Congress added Intermediate Care Facilities (ICFs) to the list of optional services that states could offer under their Medicaid programs. Other benefits covered include independent case management, individual and family support services including respite and attendant care, specialized vocational services, protection and advocacy services, and residential services. Given the range of services that are presently available through SSI and Medicaid and those which may be available in the future, it is important for the estate planner to be aware of the financial need criteria to qualify an individual for these two programs. Supplemental Security Income Eligibility for SSI requires that the person be aged, blind or disabled and that the individual have limited income and resources according to the guidelines of the program. All assets, not just earnings, as with Social Security benefits, count against the amount of SSI an individual receives. Income is defined as the receipt by an individual of any property or service which he can apply, either directly or by sale or conversion, to meet his basic needs for food and shelter. The SSI regulations specifically In some states, individuals who qualify for SSI will automatically qualify for Medicaid. include inheritance and gifts as income. SSI regulations further state that property is considered a resource if the claimant has the right, authority or power to liquidate the property. An individual is allowed up to $2,000 of non-excludable resources before he is disqualified from receiving benefits. The recipient is also allowed to own the home s/he is living in, one car, regardless of its value, if it is used to transport the recipient or a member of the recipient s household, reasonable household goods and personal effects and a life insurance policy if the total face value does not exceed $1,500. Resource is defined as cash, liquid assets or any real or personal property that the individual owns and could convert to cash to use for his support. Property which cannot be liquidated by the SSI recipient will not be considered a resource. In some states, individuals who qualify for SSI will automatically qualify for Medicaid. This is not the case in Illinois, where a separate application must be made for Medicaid through the Department of Healthcare and Family Services For more information visit us at To join our Real Homes, Real Solutions forum, visit us at:

9 (formerly Department of Public Aid). States are allowed to have stricter restrictions on assets and income for Medicaid which may disqualify the SSI recipient from receiving Medicaid funds. In states that do not follow the SSI eligibility requirements for Medicaid, the parent should be extremely cautious that his/her estate plan be constructed in such a manner that funds left to the child are not considered a resource for purposes of either SSI or of Medicaid eligibility. The method to protect a child s inheritance will be discussed later. Other financial need based benefits which the parent may want to protect in the estate plan include food stamps, public housing and legal aid. Eligibility requirements for these benefits vary from state to state. Services for Children with Special Health Needs A program which is of great assistance to parents of children with disabilities and not well known is Services for Children with Special Health Needs. This program provides medical treatment to children who are disabled up to age 21. Services include transportation to clinics, testing for health problems, diagnosis, evaluation and full treatment of those problems. All developmentally disabled children are eligible for the diagnostic services. The evaluation and treatment services are only available to families who meet certain income guidelines. These guidelines vary depending on the state you live in. To apply for these services, contact your local health department or the social worker in the hospital your child is treated. Fee for Service Programs The third type of program that estate planners need to be familiar with is the fee for service program. These include state institutions for persons who are mentally retarded or mentally ill, outpatient psychiatric centers, homemaker services, vocational rehabilitation services, and community outpatient services. Fees are based upon the individual s ability to pay and are charged to the parent of the minor child or to the disabled adult who is receiving services. Some states even have a responsible relative liability for adult children and will charge the parents. The preceding information is a brief introductory summary of government benefits. DO NOT assume that your lawyer is familiar with these benefit programs... the training received by most lawyers rarely provides the requisite background for estate planning for families with a dependent who has special needs. Parents with a disabled child often find it difficult to locate an attorney who is experienced and knowledgeable in both estate planning and in the special problems and laws and government benefits concerning persons with disabilities. Be sure that the lawyer you select is familiar not only with basic estate planning techniques, but is knowledgeable of the methods used to prevent the state from taking your child s inheritance upon your death. This material is intended to offer general information to clients, and potential clients, of the firm, which information is current to the best of our knowledge on the date indicated below. This information is general and should not be treated as specific legal advice applicable to a particular situation. Fletcher Tilton PC assumes no responsibility for any individual s reliance on the information disseminated unless, of course, that reliance is as a result of the firm s specific recommendation made to a client as part of our representation of the client. Please note that changes in the law occur and that information contained herein may need to be reverified from time to time to ensure it is still current. This information was last updated May, If you would like to learn more about Fletcher Tilton s Elder Law & Special Needs Practice Group, contact: Frederick Misilo, Jr., Practice Group Leader For more information, visit us at: The Guaranty Building 370 Main Street, 12 th Floor Worcester, MA The Meadows 161 Worcester Road, Suite 501 Framingham, MA Cape Cod 171 Main Street Hyannis, MA

10 Securing SSI for Your Young Adult with Williams Syndrome Terry Monkaba Executive Director, WSA

11 Securing SSI for Your Young Adult with Williams Syndrome When our children are diagnosed with Williams syndrome one of the first things that most of us do is look for possible sources of support for the costly medical, therapeutic and educational programs that our children will need to reach their full potential. For many of us, SSI is one of the first sources that we investigate. Unfortunately, when children are under 18, before a medical condition is considered, families have to meet very strict financial eligibility requirements. In 2011, if family income was greater than $1000 per month, the child with the disabling condition was not eligible for benefits. But when a child reaches age 18, the parent s income is no longer considered. Therefore most, if not all, individuals with WS should be approved for SSI benefits and will then receive a monthly stipend from the federal government, a small quarterly stipend from the state, and Medicaid. Benefits which can continue for the rest of their lives. Unfortunately SSI offices vary greatly from state to state and within states, and approval is anything but automatic. For some, the process is painless. For others it requires some unexpected evaluations and appointments but the approval comes without too much effort. But we also receive calls and letters from parents whose children have been denied SSI, or who were only approved after months or even years of exhaustive efforts. Why is there so much variation from state to state and even office to office within the same state? With the help of our pro bono support from the DC Lobby firm of Fabiani and Co, I was finally able to set up telephone and face to face meetings with people at the Social Security Administration office in Bethesda. I learned that approval is not about having Williams syndrome listed in the Blue Book (the federal eligibility guideline). It is all about great record keeping and understanding how to complete the application. When you access the SSI application on the SSA.gov website, you will find the following simple guidelines - the Adult disability Checklist : DISABILITY APPLICATION Military Service discharge information (Form DD 214) for all periods of active duty. W-2 Form (or your IRS 1040 and Schedules C and SE if self-employed) from last year. Social Security Number(s) for your spouse and minor children. Checking or savings account number and bank routing number, if you want Direct Deposit for your benefit checks. DISABILITY REPORT 1. Name, address and phone number of someone we can contact who knows about your medical conditions and can help with your claim. 2. Names, addresses, phone numbers, patient ID numbers, and dates of treatment for all doctors, hospitals, and clinics. NOTE: You may want to refer to any Medical Records you have. 3. Names of medicines you are taking and who prescribed them. NOTE: You may want to have your medicine bottles available. 4. Names and dates of medical tests you have had and who sent you for them. 5. Types of jobs and dates you worked for your last 5 jobs. 6. Information about any insurance or workers' compensation claims you filed, such as claim number and name, address and phone number of insurance company. Simple and straight forward right? Not exactly. Success is often dependent on our ability to read between the lines and include lots of information that they haven t requested, as well as excruciatingly complete details on all that has been requested. The four items required for the application are pretty simple at 18 with Williams syndrome our children won t have military discharge information and probably won t have a W-2, but be sure to include it if they do. (Individuals with a disability can earn $1500 month, up top $6600 per year before it will affect their SSI stipend.) Social Security Number is just for the individual. Checking or savings account numbers Even though it is stated that you are providing account numbers for automatic check deposit, remember that applicant assets are a determining factor for eligibility. Even though parents salary and assets are no longer considered, you MUST be sure that the individual applying has LESS THAN $2000 in assets. If your child s grandparents (or anyone) have been providing savings bonds or other assets at birthdays etc, or has named your child with WS in a will, have them stop immediately. Any asset that is in your child s name will count as part of the $2000 ceiling and could disqualify him or her from SSI eligibility. If you ve already established a trust for your child, any assets should be transferred to the trust, and if the child is known to be a beneficiary in a will, the language should be changed to specify the trust as the beneficiary rather than the child. If your child doesn t have a trust, you will need to liquidate/move any assets over $2000 before applying. Early in the application, you will be asked if the applicant has been diagnosed with a specific condition - we all know to answer Yes to this one. What you may not know is that the qualifier Williams syndrome is NOT the right answer for the next step. To help insure approval of your application, you must list Williams syndrome and EVERY possible qualifying characteristic of WS that affects your child. The correct answer is therefore, Williams syndrome; cardiovascular disorders, high

12 blood pressure, Cognitive Impairment, ADHD, etc. Your answer here, will then determine exactly what reports are needed. Reports 1. Name, Address and Phone # of someone we can talk to I was advised that it s MUCH better to include 3 or 4 names for this section rather than just one ( in case they find it difficult to reach the first person, or that person isn t convincing ). It is also great to include folks like teachers, job coaches, employers (if there is one), volunteer supervisors etc. who can recount specific situations which make it very clear that the individual will not be able to work 40 hours per week, or at a job that will provide much more than minimum wage. If you feel that one of the reasons your child will need assistance is because they tire easily and won t be able to handle full time work, or that their distractibility is a huge issue be sure to add a contact here who can attest to this condition (doctor, therapist etc.). Bottom line, don t simply list your parents or your next door neighbor because they know your child; list professionals who know your child and who can specifically address their qualifying conditions. 2. Dates of treatment Remember all the characteristics you listed above, the reports you provide in this section should verify all of those claims. It s also critical to ensure to the best of your ability that all the contact information you provide is current. If the evaluator on your case, cannot reach the doctors, clinics etc. that you list, it is not his responsibility to try and find them. He will simply note that he could not verify your claim. 3. Names of medicines Any time you see a note take it very seriously. You MUST be able to verify medications and dosages especially if they are critical to the claim. If you claim that your child is on a medication that makes them very drowsy, or one that must be administered during the work day etc. and that inhibits his or her ability to work, you must be able to prove that they are currently taking the medications and how long they will continue to take them (you ll need a doctor s report to testify to this claim, reports showing side effects of the medications etc.) 4. Medical tests You should be VERY COMPLETE with your reports for this section. If you list cardiovascular disorders, but your child s surgeries etc were 15 years ago, they are still important. If you list (as nearly all of us will) cognitive impairment, as a qualifying condition, you must provide test reports that are LESS than a year old as verification. If the cognitive testing was not completed within 12 months of your application, the Social Security office will require testing of their own to verify your claim, and that may not be a good idea. You will typically not be in the room with your son or daughter when they are interviewed by the SSI evaluator. There have been cases, when based on the excellent interview of an applicant with WS (who naturally wants to please by providing all the right answers and is verbally astute), claims were denied without further testing. 5. & 6. Jobs and workers comp. claims... These 2 items are fairly straight forward. Be sure to make note if the job required (requires) a job coach or special accommodation, and include those people in your list for #1. The most important thing to remember when completing the SSI application (whether for a child or adult) is that the evaluator may never have heard of Williams syndrome, and it s not his job to research the disorder. It s our job to put all the information he will need for approval at his fingertips. Never think you are providing too much information. The evaluator has to review everything we give them, and that one additional piece of information or person who knows your child may be the one that provides the defining information for approval. Report keeping is critical not just for SSI but for medical procedures, educational options, housing opportunities and all types of benefits. Filing and reporting systems are often one of those things we plan to do as soon as we have some free time. If the project is currently one of those on the back burner at your house, please move it up on the priority list. You ll be glad you did!

13 OBRA `93 Changes in Medicaid Transfer of Asset Rules Medicaid is the government program that pays for, among other things, long-term care for the elderly and the disabled. For millions of people who are disabled and poor, Medicaid pays for acute health care, dental care, respite services, rehabilitation therapies, assistive technology devices and other community-based services and supports. OBRA 93, which President Bill Clinton signed into law on August 10, 1993, renders significant changes to the eligibility rules at Part II of the legislation (all amendments are to 42 U.S.C. sec et seq.). The new Medicaid rules were designed to restrict elderly persons from rearranging their finances in order to qualify for Medicaid to pay for their long-term nursing home care. For the most part, the new law limits the ability of elders to transfer their assets to their adult children or to trusts known as Medicaid Qualifying Trusts in order to qualify for Medicaid. However, there are two major exceptions to the new transfer-ofasset rules that have a tremendous impact on the lives of persons with disabilities. These are positive changes and expand our ability to help persons with disabilities to preserve their assets and still qualify (or remain qualified) for Medicaid. First, however, the bad news: OBRA 93 increased the periods after a transfer of assets during which the individual will be ineligible for Medicaid. OBRA `93 extended this so-called look back period from 30 months to 36 months for outright gifts. The new law also extended the look back period to sixty (60) months for transfers to irrevocable trusts, which eliminated largely the ability of most families to use trust arrangements to protect assets. Another piece of bad news is that the new law eliminated a person s ability to disclaim an inheritance. If a person with a disability was in line to receive an inheritance, and if the receipt of this inheritance would jeopardize his or her eligibility for government benefits, he or she, prior to OBRA 93, could OBRA `93 created two exceptions to the transfer-of-asset rules which expanded an attorney s ability to help persons with disabilities and their families to remain qualified for Medicaid, despite having excess assets in their name. simply disclaim the inheritance. OBRA 93, however, treats disclaimers as a transfer of an asset and a person would lose his or her eligibility for Medicaid if he or she disclaims an inheritance. Now for the good news: OBRA 93 created two exceptions to the transfer-of-asset rules [see 42 U.S.C. Sec. 1396p(d)(4).], which For more information, visit us at: The Guaranty Building 370 Main Street, 12 th Floor Worcester, MA The Meadows 161 Worcester Road, Suite 501 Framingham, MA Cape Cod 171 Main Street Hyannis, MA

14 expanded an attorney s ability to help persons with disabilities and their families to remain qualified for Medicaid, despite having excess assets in their name. First, a person going into a nursing home, who otherwise would not qualify for Medicaid because of the value of his or her own assets, can qualify for Medicaid payment of his or her nursing home care by transferring assets to an irrevocable OBRA 93" special needs trust for the benefit of a person with a disability. Unlike other transfers of assets, there is no look back period for these transfers. The individual with a disability who is the beneficiary of the trust must be under the age 65 and must be disabled as defined by Social Security regulations. Second, if a person with disabilities and under age 65 has money in his or her own name (for example, because of a lawsuit settlement, direct inheritance, savings, or gift), the parent or guardian of the disabled person could create a special needs irrevocable trust and arrange for the transfer of the individual s assets to the trust. If the parents are deceased and the individual with disabilities does not have a guardian, the individual could petition the court to create an OBRA 93 special needs trust. Once the funds of the disabled person have been transferred to the trust, he or she will be immediately eligible for Medicaid. When the disabled individual dies, the state is entitled to reimbursement from an OBRA 93 trust to the extent that the state has provided Medicaid funds to that individual. If there are any assets left after the state has been reimbursed for the amount of Medicaid services that it paid, the remainder of the trust could be transferred to other family members or charities. OBRA 93 trusts are sometimes referred to as payback trusts because of this reimbursement requirement. PLEASE NOTE: These trusts do not replace the need for families with a disabled individual to write an estate plan that enables a disabled family member to benefit from an inheritance and remain qualified for government benefits. Families would still need to incorporate a special needs trust into their estate plan if they have a family member with a disability. With proper planning, parents can leave the remaining trust estate to other family members when the disabled beneficiary dies. There is no payback requirement in a traditional special needs trust. This material is intended to offer general information to clients, and potential clients, of the firm, which information is current to the best of our knowledge on the date indicated below. The information is general and should not be treated as specific legal advice applicable to a particular situation. Fletcher Tilton PC assumes no responsibility for any individual s reliance on the information disseminated unless, of course, that reliance is as a result of the firm s specific recommendation made to a client as part of our representation of the client. Please note that changes in the law occur and that information contained herein may need to be reverified from time to time to ensure it is still current. This information was last updated May, If you would like to learn more about Fletcher Tilton s Elder Law & Special Needs Practice Group, contact: Frederick Misilo, Jr., Practice Group Leader For more information, visit us at: The Guaranty Building 370 Main Street, 12 th Floor Worcester, MA The Meadows 161 Worcester Road, Suite 501 Framingham, MA Cape Cod 171 Main Street Hyannis, MA