TRUST DISBURSEMENTS SR 18-01, 01/18 (MAM-A)

The treatment of trust disbursements in the medical assistance (MA) eligibility determination process differs based upon the type of trust involved and the type of MA received:

·         for all categories of Non-MAGI MA, trust disbursements from revocable, irrevocable, and third party trusts are treated as follows:

-         any disbursements made to the individual are counted as unearned income;

-         disbursements made directly to the trustee for administration of the trust are not counted; and

-         any other disbursements from the trust are considered to be an asset transfer for less than fair market value.

·         for all categories of non-MAGI MA, trust disbursements from Special Needs Trusts, Pooled Special Needs Trusts, and Third Party Special Needs Trusts are treated as follows;

-         any disbursements from the Special Needs Trust made directly to the individual are counted as unearned income;

-         disbursements from the Special Needs Trust made to a third party for food or shelter are counted as unearned income up to the “presumed maximum value (PMV)” figure set by the SSA (current figures provided below); and

-         any disbursements from Special Needs Trusts that are not made directly to the individual or that result in receipt of food or shelter, are not counted. Examples of disbursements from Special Needs Trusts that fall into this category and are not counted are disbursements made directly to the trustee for administration of the trust, disbursements for therapy, educational expenses, phone bills, recreation, medical services not covered by Medicaid, entertainment, etc.

·         for all categories of MAGI MA, count only the taxable portion of trust disbursements as unearned income, regardless of the type of trust or use of the disbursement. If a MAGI case has a special needs trust and the disbursements are used for medical services not covered by Medicaid, educational expenses, phone bills, therapy, recreation, entertainment, or trust administration (which may allow the disbursement to be excluded for non-MAGI categories of MA), these disbursements are counted in the MAGI MA case as unearned income if the disbursements are taxable. If the disbursements are not taxable, they are not counted.

Exception: For tax dependents, such as children, receiving disbursements from a trust that total less than the tax filing threshold and have no other income, none of the income is counted towards the MAGI household. If the trust disbursements exceed the tax filing threshold or the dependent has other income that exceeds the tax filing threshold so the dependent must file taxes, then the tax disbursements and other income are counted towards the MAGI household’s income. For the Single Dependent tax filing threshold, see PART 601, Table K, Federal Tax Filing Requirement Thresholds.

The PMV for 2018 is as follows:

·     $270 for an individual;

·     $395 for an individual and a spouse ; and

·     $395.33 for an individual and needy essential person.

See also SPECIAL NEEDS TRUSTS, TRUSTS USING THE ASSETS OF OTHER PARTIES, and TRUSTS USING THE ASSETS OF THE INDIVIDUAL OR SPOUSE..

References: He-W 601.02(c); He-W 601.04(l); He-W 601.05(j); He-W 601.06(e); He-W 601.07(i); He-W 601.08(g), (h), & (k); He-W 654.04(b)(10);He-W 654.07(e)(2); RSA 167:4, V; RSA 167:7, IV; RSA 167:80; 42 CFR 435.603(d); 42 USC 1382a(a)(2); IRS Publication 501, IRS Publication 929 [for earned and unearned income tax filing thresholds]; POMS: Section E,1. Disbursements from Trusts [https://secure.ssa.gov/apps10/poms.nsf/lnx/0501120200#e]; POMS: PMV authority [https://secure.ssa.gov/poms.nsf/lnx/0500835300]; POMS: PMV figure [https://secure.ssa.gov/poms.nsf/lnx/0500835901]