Lump Sum & SNT Handout

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Bridget Montgomery
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1 Lump Sum & SNT Handout Lump Sums A lump sum is a substantial one-time amount of money that you reeive that represents a gain or benefit to your household. For example: retative Soial Seurity benefits, gifts, inheritanes, life insurane peeds, lottery winnings, litigation settlements and retative unemployment benefits. Lump sums are generally ounted as inome in the month reeived and as a resoure thereafter (exept for SNAP whih ount them as resoures in the month reeived). If the individual is in reeipt of publi benefits (SSI, publi assistane, Mediaid, SNAP, Setion 8), then the lump sum must be reported to eah apppriate ageny. Eah ageny has its own rules about the treatment of lump sum benefits. Effet of Lump Sums on Publi Benefits Supplemental Seurity Inome (SSI) Resoure limit for HH1: $2 Generally, retative SSI or SSD benefits are onsidered unearned inome in the month reeived and an individual will not reeive a monthly SSI payment for that month. The retative benefit will be onsidered an exempt resoure for nine months after the month it is reeived. For SSI purposes, an individual should have no more than $2, left by the tenth month after the lump sum is reeived. A lump sum award fm another soure (gifts, inheritanes, litigation settlements, et.) is onsidered unearned inome in the month reeived and a resoure thereafter. If the lump sum plaes the individual s resoures over the $2 resoure limit, the individual will be found ineligible for SSI. SSI reipients an spend the money on exluded resoures, like furniture, and on other daily neessities (if their SSI benefits are suspended). SSI will require pof of spenddown of a lump sum so an individual should keep very good doumentation and reeipts as to how all of the money was spent. If the individual annot show how all the money was spent, they will be found ineligible for ongoing SSI benefits due to the belief that they are hiding the money or gave the money to someone else (thus invoking a transfer penalty). Regs: PMS SI What is a Resoure Transfer; PMS SI Transfer of Resoures by Spend-Down; PMS SI 112. et. seq; 2 RF Exlusions fm Resoures. Publi Assistane (PA) Resoure limit for HH1: $2 Period of ineligibility: Lump sum (plus any monthly benefit) divided by HH s standard of need (SN) Example: $5, SSA ret reeived & lient usually reeives $5 fm PA (ash + rent) $5, ret divided by $5/month fm PA = ineligible for 1 months This period an be redued by purhase of big tiket items: automobile to find employment; ollege tuition aount; burial plot; funeral agreement [limited amount $ allowed for eah] This period an also sometimes be redued by payment for other things like furniture, debts, et but this has to be arefully doumented & is not assured that it will be aepted even then. Avoiding ineligibility: If lient requests a PA ase losing and ase is losed before lump sum is reeived, then lient an reapply as soon as lump sum is spent down below $2. This only works if the lump sum has not yet been reeived and is ertain to be reeived by a ertain date thus making it safe to request ase losure. This ertainty is unlikely with SSA ret benefits. New York Legal Assistane Gup 7 Hanover Sq. New York, NY 14 Last updated: July 15, 215

2 Mediaid Resoure limit for HH1: $15,15 The resoure test has been eliminated for all Mediaid and all FHP individuals EXEPT for individuals reeiving SSI-related Mediaid (blind, disabled, or elderly). This inludes SSI & SSD reipients. See SSI/SSD retative benefit lump sum: exempt for nine months following the month of reeipt If PA ase is losed and lient reeives a Mediaid notie, submit it with bank statements that show resoures are above Mediaid limit but also inlude SSA retative lump sum award letter and a letter explaining that the nine months are not yet elapsed and therefore it should be exempt. n the 1 th month, if the SSI/SSD retative benefit lump sum has not been spent down below $15,15 (or more depending on household size), then the lient will no longer be Mediaid eligible. See also A lump sum award fm another soure (gifts, inheritanes, litigation settlements, et.) is onsidered unearned inome in the month reeived and a resoure thereafter. If the lump sum plaes the individual s resoures over the $15,15 resoure limit, the individual will be found ineligible for Mediaid. Regs: Mediaid Referene Guide (MRG); 18 NYRR 36. Supplemental Nutrition Assistane Pgram (SNAP) / Food Stamps Resoure limit for HH1: none (with limited exeptions) A lump sum award does not ount as inome in the month reeived. Most SNAP households in NYS are ategorially eligible for SNAP and therefore have no resoure limit. There are limited exeptions though whih are disussed more here: HPD Setion 8 Resoure limit for HH1: none There is no resoure limit. The interest on the lump sum is inome and, if there is no interest, a HDdetermined average interest rate is attributed to the lump sum if it is over $5,. Interest: HD regulations pvide that if a family has assets over $5,, inome inludes the greater of atual inome fm assets or a % of assets equal to a passbook savings rate determined by HD. 24 FR 5.69 (26). In New York ity, this rate has been set at 2.5% in reent years. See NYHA Management Manual, hapter VI, (IV)(B)(8). The interest rate used is determined by the loal HD field offie. Supplemental Needs Trusts Supplemental Needs Trusts (SNTs) are legal tools used to help disabled people keep more of their inome or assets without losing their publi benefits. A SNT an be used when a disabled person under age 65 reeives a lump sum. rdinarily this asset would make the individual ineligible for Mediaid, SSI, and other benefits. By transferring it to a SNT, the person an remain eligible for all their benefits, and use the money in the SNT to supplement their regular monthly inome. For individuals over age 65, there an be a transfer penalty for transfers of either inome or assets into an SNT, depending on whih publi benefit is involved. Review this detailed training outline whih overs how SNTs work and how they impat on publi benefits. See: See also:

3 Effet of SNTs on Publi Benefits ash is always onsidered inome and the trustee of the SNT should never give ash to the benefiiary. However, the SNT an pay diretly for ertain expenses, depending on whih publi benefit is involved. Supplemental Seurity Inome (SSI) Disabled SSI reipients under 65 often set up SNTs whih are not onsidered as a resoure. Disabled SSI reipients over 65 an set up SNTs but there is a three year penalty period, depending on amount transferred. (The penalty is alulated by dividing the amount transferred by the individual s SSI monthly payment rate, inluding the state supplement). SNTs for SSI reipients ANNT be used to pay for shelter or food. Shelter expenses inlude rent, mortgage, pperty taxes, heating fuel, gas, eletriity, water, sewer, and garbage removal. Payments made to 3 rd parties for food or shelter are onsidered In-kind Support and Maintenane (ISM) and will redue SSI payments by the lower of (1) the atual value or (2) a maximum of 1/3 of the federal benefit amount. SNTs AN be used to pay for lothing, furniture, able, telephone, ell phone, internet, homeowner s insurane, ar servie, loal transportation, entertainment expenses, eduational expenses, and vaations. Pre payment of burial expenses is permitted thugh an irrevoable funeral agreement. Publi Assistane Disabled PA reipients have the option of setting up a SNT and it is not onsidered a resoure TDA makes a distintion between a reipient who reeives a lump sum and diretly puts it into a SNT and a reipient who reeives a lump sum and waits to put it into an SNT. The former would not be subjet to the lump sum rule whereas the latter would. nder offie regulation (h) lump sum inome must be budgeted to alulate a period of ineligibility even if the lient intends to later establish a SNT with the funds. nly if reeipt of the lump sum simultaneously oinides with the reation of a SNT will there be no period of ineligibility. 1 INF-8, p. 3. SNT disbursements to third parties are onsidered inome by PA unless the disbursement is learly for an item not pvided for in the standard of need (SN) like: eduation, medial expenses, hildare, and other non-shelter/energy/food expenses. Mediaid Disabled Mediaid reipients under 65 often set up SNTs whih are not onsidered as a resoure. Disabled Mediaid reipients over 65 an set up SNTs if they urrently reeive ommunity Mediaid but fae possible disqualifiation for nursing home are if needed within 5 years of the transfer. SNTs an also be used to eliminate the Mediaid spenddown if an individual has exess inome. See See also SNTs for Mediaid reipients an be used to pay for almost anything, inluding rent, utilities, food, lothing, redit ard bills (as long as no ash was withdrawn with the ard), vaations, et. Supplemental Nutrition Assistane Pgram (SNAP) / Food Stamps No resoure limit for SNAP so this only omes into play for SNT disbursements SNT disbursements will be treated as inome if they are made for normal living expenses. ther disbursements will not be treated as inome. See 1 INF-8, p. 5 and FSSB.

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County of San Diego Retirement Benefit Options

County of San Diego Retirement Benefit Options NDC-0619 (09/2016) For help, please all 888-DC4-LIFE mydcplan.om 1 Things to Remember Complete all of the setions on the Retirement Benefit Options form that