POMS in Special Needs Trust Drafting & Administration With Emphasis on Recent Changes

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1 POMS in Special Needs Trust Drafting & Administration With Emphasis on Recent Changes Reginald H. Turnbull, CELA* TURNBULL & STARK, P.C. 200 East High Street Jefferson City, MO , Website: *Neither the Supreme Court of Missouri nor The Missouri Bar reviews or approves specialist designations or certifying organizations.

2 SSA s POMS...& SNT s POMS =Program Operating Manual System Part 5 on SSI has SI for prefix ist!openview&restricttocategory=05 POMS for 1 st Party SNT s since POMS for 3 rd -Party SNT s & Pre 2000 Trusts

3 POMS Disclaimer The POMS states only internal SSA guidance. It is not intended to, does not, and may not be relied upon to create any rights enforceable at law by any party in a civil or criminal action.

4 POMS Disclaimer (Con t) Further, by posting the POMS, SSA is not thereby limited from exercising its otherwise lawful prerogatives. If the content of the POMS conflicts with the Social Security Act, another relevant statute, SSA regulations, or Social Security Rulings, those authorities have priority over the POMS.

5 RECENT CHANGES TO POMS Website address for recent changes in POMS f/instructiontypecode!openview&restricttocategory =POMT As of November 26, 2013 Google Changes to SSA POMS

6 Sole Benefit Rule Tip: always use sole benefit of in doc Controversy in May 2012 POMS revision SI F.2 Example of permitted expense to pay for family visit Became example of impermissible expenditure Firestorm erupted SSA backed off New POMS effective 2/19/13 w/o bad example

7 Income Subchapter SI hapterlist!openview&restricttocategory=05008 SI Living Arrangements and In-Kind Support and Maintenance

8 Income Deeming Income considered Of ineligible spouse Of parent(s) of minor Of sponsor of alien Ineligible spouse cause tx as eligible couple Income after deeming rules applied Considered to be SSI recipient s unearned income POMS SI , et seq.

9 EFFECTS OF INCOME ON SSI Unearned Income Gifts, payments from annuities, pensions, alimony, support, SNT, dividends, interest, rents, awards, and other benefit programs (e.g., SSA). Reduces benefits dollar-for-dollar after first $20 Earned Income Wages, royalties, net earnings from self-employment, and any honoraria for services rendered. Reduces benefits one-dollar-forevery- two-dollars after first $85 earned monthly In-Kind Support & Maintenance Actual receipt of food or shelter, or something used to get one of these. If in household or institution, then use PMV. If home of another, then Value of 1/3 Reduction VTR. Reduces benefits >VTR (1/3) of $ or <PMV (presumed max. value) of $ in 2013

10 PARENT-DERIVED CDB Upon disability or retirement of parent, eligible disabled adult child will receive 1/2 of parent s benefit Upon death of parent, eligible disabled adult child will receive 3/4 of parent s benefit

11 SSI & CDB BENEFITS COLLIDE Example: Helen disabled since age 20 Receives $710 in SSI monthly Helen s father, Earl, retires Receives $1,250 SS RIB monthly Helen Receives $625 SS CDB monthly as DAC (CDB) Receipt of Helen s SS CDB unearned income Reduces Helen s SSI by $605 (after first $20) Helen receives total of $730 $105 SSI + $625 SS CDB Duty to notify SSA if qualify for SS CDB

12 SS CDB Causes Loss of SSI Example Cont d: Earl dies Helen receives $ SSCDB per month as survivor Helen s SSI eliminated Helen loses eligibility for Non-vendor Medicaid Unless receives home & community waiver Does spend down of $ to $814 But... Free of SSI Restrictions Qualifies for QMB & Medicare ($958 income limit)

13 Resources Besides POMS The Red Book is a general reference tool about work incentives designed for educators, advocates, rehabilitation professionals, SNT trustees, & counselors who serve persons with disabilities. Begley, Thomas D., Jr., & Jeffries, JoAnne Herina, REPRESENTING THE ELDERLY CLIENT, Wolters Kluwer Law & Business, 2013 (Looseleaf). Begley, Thomas D., Jr., & Canellos, Angela E.,. SPECIAL NEEDS TRUSTS HANDBOOK, Wolters Kluwer Law & Business, 2013 (Looseleaf).

14 Disability Benefits Conclusion Determine benefit(s) bene receives/qualifies for Draft SNT with flexibility in mind As bene ages & qualifies for different benefits Administer SNT with benefits in mind Process rather than document Special Needs Trusts Critical for supplementation to meet needs Flexibility vital to maximize public benefits Ultimate goal is highest value for beneficiary!