Question: My son has developmental disabilities and, as a result, is unable to make enough money to support himself. He only has a savings account with $25,000 in it; is there any government assistance available for him to receive some income?
Answer: With the proper planning, your son will be able to qualify for Supplemental Security Income (“SSI”). Monthly SSI payments can be available to provide income to aged, blind and disabled persons who have little or no other income. It is intended to pay for the beneficiary’s food and shelter. Furthermore, in New York State, an individual who is eligible for SSI benefits is automatically eligible for Medicaid benefits.
If the recipient receives too much income or has assets that are too great, he or she is likely to lose SSI eligibility — and the automatic Medicaid coverage that comes along with it. In many instances, the loss of Medicaid coverage can be a more serious problem than the loss of SSI benefits, particularly if alternative medical insurance is not readily available.
The current rule is that, in addition to having low or no income, an individual must have less than $2,000 in resources to be eligible for SSI. Since your son has a savings account that exceeds this, he will have to transfer this money to a first party supplemental needs trust for protection. As his parent, you can create this trust. This type of trust can only be created by a parent, grandparent, guardian or by Court order. While the general rule is that a person applying for SSI benefits will be ineligible for three years after a transfer of assets out of their name, the transfer to a first party supplemental needs trust does not trigger this period of ineligibility.
Your son cannot be his own trustee but the trustee will be able to use the money in the trust to supplement any benefits he receives from the SSI and Medicaid programs, or anywhere else. The trust is not meant to “supplant” government benefits, therefore the trustee is limited in how the trust assets can be used.
In addition to the $2,000, your son can also have certain exempt assets in his name. These include, but are not limited to, a home, household furnishings, a car, term life insurance, a burial plot. The trustee may not give cash payments to your son but can purchase goods or services with trust assets for the sole benefit of the SSI recipient.
With the correct structuring of the money in your son’s savings account he will be able to receive monthly SSI payments to assist in paying for his food and shelter, while also having this income supplemented by his savings to pay for additional needs.