"Pooled Income Trust"

Medicaid Pooled Income Trust

A Medicaid Pooled Income Trust allows an individual to divert their excess income. In order to qualify for Medicaid in New York, an individual must meet certain income and resource requirements. For the year 2021, an individual’s resources must not exceed $15,900. In addition, an individual may not receive more than $884 in income. If the individual collects more than $884 in income, then the amount by which the individual’s income exceeds $884 is known as “surplus”. In order to receive Medicaid, the individual must either spend down their surplus income or deposit this surplus into a special Trust known as a Medicaid Pooled Income Trust.  

What is a Medicaid Pooled Income Trust?

A Medicaid Pooled Income Trust is a special type of exempt trust used by disabled individuals to deposit their surplus and therefore, preserve their monthly excess income. This trust is authorized by state and federal laws. The deposited money is disregarded by Medicaid. By depositing the surplus into the Pooled Income Trust, a person can lower their total income counted by Medicaid and be within the allowable income limit. At the same time, the individual can continue to save and use the deposited income for his or her enjoyment.

What Type of Income Goes Into the Trust?

All income over the allowable Medicaid limit should go into the trust. The income limit changes every year (depending on the cost of living), but what qualifies as income consistently stays the same. Income includes your pension, social security, lawsuit settlements, IRA distributions, annuity distributions, 401k distributions, and other similar payments. When you apply for Medicaid in New York, the New York City Human Resources Administration (“HRA”) will use the information that you have provided to them and will give you a budget. That budget sheet will list the excess income. HRA will then ask you to either provide proof that you have spent down the monthly money or will ask that you provide proof of the fact that you have deposited this money into a Pooled Income Trust. HRA will ask you for something known as a VOD – verification of deposit. 

Who May Join a Medicaid Pooled Income Trust? 

Any adult with a physical or mental disability who wishes to preserve or become Medicaid eligible may join. Individuals aged 65 or older are deemed disabled by Medicaid.  Elderly people in need of home care, individuals residing in assisted living, and intellectually disabled adults are all individuals qualified to join a Medicaid Pooled Income Trust. 

Why Do You Need a Medicaid Pooled Trust?

Individuals whose income is above the Medicaid limit will not qualify for Medicaid until they spend down their excess income, for example, toward medical expenses, and are required to submit proof of the spenddown in order to activate their Medicaid. Moreover, items such as food, clothing, rent, cellphones and other essentials are not counted towards your spenddown.  On the other hand, money deposited into the Medicaid Pooled Income Trust can be spent on food, clothing, rent, and other essentials, or saved up for more expensive items or services. Also, since the income deposited into Medicaid Pooled Trust is disregarded by Medicaid, the individual can keep their excess income without worrying about exceeding the Medicaid limit. 

What Can the Medicaid Pooled Income Trust Pay For?

Money saved in the Medicaid Pooled Income Trust can be used on items and services for the disabled individual. The list of things the trust pays for includes, but is not limited to:

  • Living expenses
  • Cab rides
  • New phones
  • Travel expenses
  • Medical treatments not covered by government benefits
  • Organic groceries
  • Credit card bills. 
  • New shoes and clothes
  • Utility bills, real estate taxes, home repairs

"Pooled Income Trust"

How Do I Sign up?

First step, you will need to pick a pooled trust you would like to join. We can help you evaluate your preferences and recommend a pooled trust that most fits your needs. 

Once you have picked a pooled trust, the next step is to complete the forms from that trust (known as a joinder agreement) and determine the appropriate amount of income to be deposited into the trust (provided in the budget from HRA). You will also need to obtain medical records from your treating doctor. The joinder agreement, the proof of deposit, the medical records, and the related forms you fill out will be sent to the local Medicaid agency, and ultimately, to Albany for processing. 

We are Elder Law Attorneys and can help you identify whether you need a Pooled Trust and establish one. Contact us today for a prompt discussion of your needs. 

For more information, please contact NYC Probate Litigation, Guardianship, NYC Probate and Estate Planning attorney Regina Kiperman:

Phone: 917-261-4514
Fax: 929-556-2089
Email: rkiperman@rklawny.com

Or visit her at:
40 Wall Street
Suite 2508
New York, NY 10005

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This page is made available by the lawyer for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this site you understand that there is no attorney client relationship between you and the lawyer. The post should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. ATTORNEY ADVERTISING.

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