Pooled Income Trust Lawyer NY

What a Pooled Income Trust Is

A pooled trust is a trust established and managed by a nonprofit association. The nonprofit keeps a separate account for each person enrolled, but pools those accounts together for investment and management. When the trust meets the requirements of Section 1917(d)(4)(C) of the Social Security Act and New York Social Services Law Section 366(2)(b)(2)(iii), the money in the person's account is not counted in determining Medicaid eligibility.

Federal guidance also requires the nonprofit to keep ultimate control over the trust. A nonprofit may hire outside companies to handle certain functions, but it cannot hand off decisions such as whether to make discretionary payments.

Who can use one

New York Department of Health guidance describes pooled trusts as available to a certified disabled individual of any age. The account must be funded with the person's own money and must be established by the person, a parent, a grandparent, a legal guardian, or a court. If an agent under a power of attorney signs on the person's behalf, the power of attorney must include permission to make gifts.

How Medicaid treats the income you deposit

Under community budgeting, income that is diverted directly into a person's own pooled trust, or received and then placed into the trust in the same month, is excluded when Medicaid determines income eligibility. The local Medicaid office obtains a written statement of how much income will be deposited each month and excludes that amount going forward. Trust activity is reviewed at each renewal to confirm the deposits were made, and recipients are not required to send monthly proof unless that review shows a deposit was missed.

What the trust pays for

The deposited income stays available for the person's benefit. The nonprofit pays expenses on the person's behalf, such as rent and household utilities, using the money in that person's account.

What happens to the account at death

When the person passes away, funds that the nonprofit does not retain are paid to the State of New York, up to the amount Medicaid paid for that person's care.

Excess Income Without a Trust

When a Medicaid applicant's income is over the Medicaid level, the difference is called excess income, also known as a spenddown or surplus. Without a trust, there are two ways to meet it each month. The first is to show medical bills at least equal to the excess income amount, after which Medicaid pays covered medical bills for the rest of that month. The second is the Pay-In Program, where the excess income amount is paid to the local Medicaid office.

Either way, the excess income goes toward medical costs rather than rent, food, and utilities. A pooled income trust is the route that keeps that income working for the household while home care is in place.

How We Help

1. Review your income and Medicaid budget. We look at your monthly income, deductions, and household size to confirm whether you have excess income and how much would need to be deposited each month.
2. Establish disability. A disability determination is required before Medicaid will exclude income placed in a pooled trust. If you receive Social Security Disability benefits, we gather that proof. If you are 65 or older without a disability award, we assemble the medical documentation for review by the New York State Disability Review Team. A Medicare card on its own is not accepted as proof of disability.
3. Select a nonprofit trust and complete enrollment. We review the terms of the pooled trusts available to you, including their fees and how they handle bill payment, and prepare the enrollment paperwork.
4. Confirm who has authority to sign. We check whether you can sign yourself, or whether an existing power of attorney includes the gifting authority Medicaid requires. If not, we discuss the alternatives before anything is filed.
5. Coordinate with the Medicaid application. We submit the trust documents and the written statement of your monthly deposit with your Community Medicaid application so the income exclusion is applied from the start.
6. Keep the arrangement in order. Medicaid income levels and Social Security benefits change each year. We help recalculate the monthly deposit when they do and prepare for the trust review at each renewal.

Home Care Versus Nursing Home Care

A pooled income trust works under community budgeting, which applies to Medicaid home care. The income exclusion does not apply under chronic care budgeting, which Medicaid uses for nursing home coverage.

This matters if care later moves to a nursing home. The Department of Health treats income deposited into a pooled trust after age 65 as a transfer when nursing home eligibility is determined. Deposits are not penalized to the extent the trust paid an equal amount for the person's own needs, but the person is responsible for proving those payments. Assets placed in a pooled trust on or after a person's 65th birthday are also subject to a transfer penalty for nursing home coverage.

Depositing the right amount also affects other benefits. If excluding the trust deposit makes a person eligible for the Medicare Savings Program, the monthly deposit may need to increase to avoid a spenddown. We review that interaction as part of setting the deposit amount.

Frequently Asked Questions