Pooled Income Trusts

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A special kind of trust in New York, called a Pooled Income Trust, can be used to protect what Medicaid calls the “surplus” income you receive each month.  Most senior citizens receive Social Security every month, and many have pensions and receive income distributions from their retirement accounts.  For 2022, Medicaid limits income to $954 for an individual who is receiving Medicaid services in the community.  (This number usually increases by a small amount each year.)  If you are an individual who needs home care, and do not plan, every dollar of income in excess of $954 is required to be contributed to the cost of your care.

Few people in New York can live on $954 per month.  Once again, trusts come to the rescue.

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With a Pooled Income Trust, you can retain the benefit of all your income and have Medicaid pay for home care.  Here’s how it works:

Pooled Income Trusts can be established with certain non-profit organizations that are authorized to operate them for the benefit of disabled persons.  If you are over 65 years of age, and need care, you will almost surely qualify for this type of Pooled Income Trust for Medicaid in New York.  For investment and management of funds, your income is “pooled” together with the income deposited by other participants.  However, your Community Medicaid Pooled Trust contributions are held in a separate account, segregated for your needs only.

Once your income is deposited into your Pooled Income Trust account, the trustees of the account will pay your bills using this money.  As an example, let’s say you receive $1,954 a month in Social Security and pension benefits.  The “surplus” amount of $1,000 over Medicaid’s $954 ceiling is sent to the trust every month.  The Medicaid compliant Pooled Trust will follow your instructions on what expenses to pay, as long as they are permitted under the rules of the trust.  Some of these Pooled Trusts will give you a debit card to use for your groceries or other needs.

Through the Pooled Income Trust, your “surplus” income can be used for food, monthly rent or to pay your mortgage, phone, utilities, or home repairs.  Pooled Income Trust allowable expenses include just about anything you’d normally pay for (except medical insurance and many medical bills).

The non-profit organization essentially functions as a bill paying service, and takes a small monthly processing fee.  When you pass on or if you move into a nursing home, whatever is left in your Community Medicaid Pooled Trust account will be used by the organization for charitable purposes.

The net result of using a Pooled Income Trust is that you’re able to protect your surplus income and spend this money as you would almost as if it were in your own bank account.  If you didn’t do this, Medicaid regulations would require you to contribute everything except $954 (in 2022) per month to the cost of your care.  With a Pooled Income Trust, you retain your lifestyle while still qualifying for Medicaid benefits.

The Pooled Income Trust comes with one important limitation – the money in your Medicaid Pooled Trust can only be spent on you, for your own expenses and needs.  However, you should not be shy about asking the trustees to pay for anything you want.  Again, the only real limitation of Pooled Income Trust allowable expenses is that the expenditure must be for your benefit, not for anyone else.

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