Potential Application for Supplemental Security Income (“SSI”). SSI is a means-based federal program that provides income to certain aged, blind and disabled people. That is, it is an income maintenance program for low-income disabled individuals, such as a child. The purpose of the SSI payment is to provide the recipient with income to be used for food and shelter. For 2014, the maximum amount of SSI for an individual is $721 per month. This amount may be reduced by the earned income of the disabled child or for items of food and shelter which are provided to the child directly.
In addition to income, another limitation for qualification for SSI is the amount of an individual’s “non-exempt” assets or “countable resources.” Exempt resources are things such as a home, one automobile, tangible personal property, etc. Non-exempt resources include everything that is not exempt (such as investments, bank accounts, etc.). In order to remain eligible for SSI, the value of the SSI beneficiary’s non-exempt resources may not exceed $2,000 during any given month. This threshold amount will be important not only for SSI purposes, but also for Medicaid and Medicaid waiver purposes.
In Kentucky and many other states, if an individual receives at least $1 of SSI, they will automatically receive a Medicaid card which will provide health insurance. If the disabled child has private health insurance then the Medicaid card will serve as secondary, or back-up, health insurance coverage and will pay much of what the primary insurance may not pay (such as co-payments, etc.).
First Party Special Needs Trust:
A special needs trust (“SNT”) is a form of discretionary, spendthrift trust designed to preserve the beneficiary’s eligibility for government benefits. Distributions from the trust are intended to supplement (not supplant) public benefits. This type of special needs trust is called a “third party” special needs trust and would be established, for example, by a parent for the benefit of a child.
Placing one’s own resources into a special needs trust (in which case the trust would be referred to as a first party special needs trust) will allow the individual’s resources to be excluded from being considered countable and negatively impacting the eligibility for government benefits. The federal law which allows specifically for the creation of a first party special needs trust may be found at 42 USC Section 1396p(d)(4)(a).
So, for example, a disabled child could establish a first party special needs trust into which they can contribute their own (non-retirement) assets. That would allow those resources to be excluded for Medicaid eligibility purposes. While a disabled child’s retirement accounts may not be placed in a first party special needs trust, Kentucky Medicaid will not count retirement accounts against a disabled child as long as they are under age 59 1/2; and even then they will only count the minimum required distributions (as income) against them. (For now, the principal value of an individual’s retirement account is considered an exempt resource for Medicaid purposes.)
The primary goal of a special needs trust is to preserve the disabled child’s needs-based government benefits, such as SSI, Medicaid and Medicaid Waivers (discussed below). All disbursement decisions will be based on what is in the disabled child’s best interests. If any money is left in the first party (not third party) special needs trust at the time of the disabled child’s death, the remaining trust assets will first be used to pay back Kentucky Medicaid for all of the Medicaid-based expenses paid on the disabled child’s behalf during their lifetime. After Medicaid is reimbursed, any and all remaining money or assets in the trust will pass to the other heirs or descendants.
Once the first party special needs trust is established and the disabled child’s assets are transferred into it, the disabled child should then become eligible for SSI and/or one of the Kentucky Medicaid waiver programs discussed below.
1. Kentucky Medicaid:
As mentioned above, a Medicaid card provides access to basic medical and hospital care, as well as prescription drugs and long-term care services. Services are available in the community as well as in institutions. Many states, such as Kentucky, have waiver programs to support persons with disabilities in the community (see below).
2. Michelle P. Waiver:
The Michelle P. Waiver (“MPW”) is a home and community based Medicaid waiver program developed as an alternative to institutional care for individuals with intellectual or developmental disabilities. MPW allows individuals to remain in their homes with services and supports.
Persons with developmental or intellectual disabilities who can benefit from learning living skills, educational experiences, awareness of their environment and who meet Medicaid’s financial eligibility requirements (discussed above) are eligible for the MPW. Potential services provided under this program include:
- Case Management
- Adult Day Training
- Supported Employment
- Community Living Supports
- Behavior Supports
- Occupational Therapy
- Physical Therapy
- Speech Therapy
- Homemaker Service
- Personal Care
- Attendant Care
- Environmental/Minor Home Adaptation
- Adult Daycare
Once the disabled child’s assets are transferred into a first party special needs trust you could contact your community mental health center (Seven Counties Services in Jefferson and surrounding counties) to schedule a Michelle P. Waiver assessment. Seven Counties Services is located at 3717 Taylorsville Road, Louisville KY 40220, and can be reached at (502) 459-5292.
3. Supports for Community Living Waiver:
The Supports for Community Living (SCL) waiver is a community Medicaid waiver program developed as an alternative to institutional care for individuals with intellectual and developmental disabilities. SCL allows individuals to remain in or return to the community in the least restrictive setting, and might be appropriate for a disabled child if their primary caregiver were to become ill and be unable to care for the disabled child, or following the primary caregiver’s death. The SCL waiver is the gold standard of waivers in Kentucky since it provides a substantial housing allowance for disabled individuals.
Individual with intellectual and developmental disabilities who meet requirements for residence in an intermediate care facility for people with intellectual disabilities (ICF/ID facility) and who meet other Medicaid requirements (income and resources discussed above) are eligible for SCL services. The SCL waiver offers a variety of supports and services which are based on the individual’s goals, choices and priorities as identified through an individual support plan. Of greatest interest to a disabled child will be the possibility of paying for a group home or helping offset certain home
There is currently a long waiting list for services and supports through the SCL waiver and an application will enable the disabled child’s name to be included on the list and for them to move up on this list over time. Typically, however, only individuals in an emergency situation are able to access the SCL waiver, although additional individuals may be served in chronological order if funding is available.
Click here to view the application for SCL waiver which I highly recommend you complete (even before the disabled child establishes a first party special needs trust) in order to place the disabled child on the SCL waiting list.