Pooled Income Trusts

Disabled persons of any age receiving community Medicaid services — including home care, adult-day care and prescription drugs — are now able to use virtually all of their income to pay for their living expenses by participating in a pooled-income trust. It is no longer necessary for consumers to contribute their “excess” income to the Medicaid system as a “spend-down.” The pooled-income trust is proving to be a popular planning tool for persons in need of long-term health-care services for whom the excess-income option does not work because it would not allow them sufficient money to live in the community and qualify for Medicaid. The pooled-income trust works as follows:

  • Suppose an individual has a monthly income of $1,829 in Social Security and pension income and is utilizing Medicaid home-care and adult-day-care services. Under present Medicaid guidelines he is only allowed to keep $800 of that income.

  • Currently his monthly surplus is $1,000 ($1,829 - $829 = $1,000). He is sending a check each month for that amount to the appropriate health-care provider as a contribution toward the cost of his care.

  • After the individual joins the pooled-income trust his $1,000 check will be sent to the trust office. The individual will keep $829 as he does now. His expenses for rent, food, utilities, clothing, etc. will be paid by the trust according to instructions from the individual or his representative. The individual’s Medicaid services will not be affected. The pooled-income trust contains the assets of a number of disabled individuals and is managed by a non-profit organization that maintains a separate account for each individual. It is effectively a supplemental-needs trust that receives the individual’s monthly income and redistributes it on his behalf as directed by him or his representative.
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