If you or a loved one are thinking about accessing Medicaid for care in the community in New York City or its suburbs, you will also probably want to join a Pooled Income Trust. The goal of using these trusts is to permit you to remain in your home as long as possible, by allowing you to continue to use your income to pay your expenses.
Why are Pooled Income Trusts needed?
Once you are over 65 and your assets are below the Medicaid threshold of $15,150 for a single person, you are eligible for Medicaid. Your income is not a factor in whether you are eligible to receive Medicaid, but Medicaid does not ignore your income. If you don’t plan, you will be required to contribute toward the cost of your care.
Once Medicaid is paying for your long-term care, the system has a built-in maximum amount of income that you are normally eligible to keep for yourself – currently $862 per month. Any amount over that is called “surplus income,” and is supposed to be contributed toward the cost of your care.
In the New York City Metropolitan area in particular, living on $862 per month is normally impossible. This is why New Yorkers receiving Medicaid benefits turn to Pooled Income Trusts.
What is a Pooled Income Trust?
A Pooled Income Trust is a special kind of trust operated by certain nonprofit organizations. These organizations manage Pooled Income Trusts as a service to persons who are disabled and as a way of generating funds for charitable purposes. Examples in New York are UCS Trust Services and NYSARC Inc.
New York’s laws permit you as a Medicaid recipient to contribute your “surplus income” to your account at a Pooled Income Trust instead of contributing it toward the cost of your care if you are “disabled.” The definition of “disabled” is a flexible one depending on age and health. Most seniors who need home care will qualify. As long as you are doing that, your income will not affect your Medicaid benefits.
How Do I Join a Pooled Income Trust?
When you are applying for Community Medicaid in New York, you would also join a Pooled Income Trust at the same time. You need to sign a Joinder Agreement in order to establish your own personal account at the Trust. The money you send to the Trust each month will be deposited into your personal account.
Each trust has its own procedures, and its own fee schedule – you should find the one that best suits your personal needs. If you are using the services of an Elder Law firm, you should ask them for a recommendation. The Elder Law firm will probably also help you fill out the paperwork to join, and advise you regarding the logistics of paying your bills through the Trust.
Once I Have Joined a Pooled Income Trust, How Do I Use It?
Your Pooled Income Trust account functions a lot like a bank account that someone else manages for you. Each month you send your bills and receipts for items you have purchased for yourself to the Trust. This can include rent, your mortgage, grocery bills, utility bills, phone bills, clothing purchases – pretty much any kind of goods or services, as long as they are for you and are not provided by government assistance programs.
The Trust needs to approve the expenses because Pooled Income Trust funds are only permitted to be used to pay for your own expenses. Once the trust approves the expenditures, they pay your bills for you.
Isn’t it Complicated?
No, it doesn’t have to be. Most people who need Community Medicaid have pretty similar bills each month. The monthly non-discretionary bills can go directly to the Trust. Then, for variable everyday expenses, it simplifies the process if you have a credit card that you can use for purchases that are for you. The credit card bill can be submitted to the trust at the end of the month as well.
There is some paperwork involved, but our clients quickly get the hang of it. Sometimes they need assistance if the Trust does not approve a purchase, but that’s one of the reasons they hired our firm in the first place.
How Did This Type of Trust Come About?
Pooled Income Trusts are permitted by law in order to allow disabled persons to supplement the care they receive from government assistance programs such as Medicaid. It’s also a means of helping people stay in their own homes as long as possible.
Keeping people in their homes actually, saves the government money. If a senior ends up in a nursing home, it is likely Medicaid that’s paying. Even at Medicaid’s discounted rate, paying for nursing home care is almost always far more expensive than helping someone to stay in his or her own home.
Make a Pooled Income Trust work for you! Call us today to begin your plan