Shake Up in SNT Land

By Doug Chalgian on April 12, 2024

Share This Post with Friends

 

As sophisticated elder law lawyers understand, drafting a special needs trust (“SNT”) is one thing, advising trustees on how to administer them is something else – something more.

The challenge of advising SNT trustees is due, in large part, to the complex rules that apply to the government benefits that beneficiaries of SNTs typically receive, notably Supplemental Security Income (“SSI”) and Medicaid (in its various forms). An SNTs trustee has to be cautious in making distributions to, or purchasing goods and services for, their beneficiaries so as not to cause problems with these needs-based government benefits.

The changes which are the subject of this blog post relate to new SSI rules.

There are two.

One Less Bell to Answer

SSI rules provide that a person on SSI will have their benefit (i.e., their monthly income) reduced if a third-party provides financial help with their “necessities.”  This is true because, in theory, the SSI payment is supposed to provide for their necessities.  Forever, those “necessities” have been defined as three things: food, clothing, and shelter.

That means, for example, if someone allows an SSI beneficiary to live in their house and not pay rent – or not pay fair market rent – that SSI beneficiaries will have their SSI benefit reduced.  Same thing if an SNT helps a beneficiary with housing (i.e. “shelter”).

The big news is that the Social Security Administration (“SSA”) has dropped food from that list.  That means that now a third-party (or SNT) can buy someone on SSI a dinner, or some groceries, and they won’t have to report it, and it won’t reduce their monthly benefits.

With food off the list, shelter and clothing are the only two categories remaining.

Overpayments

SSI overpayments are common. Historically, when it was determined that an overpayment had occurred, the SSA would simply hold back future benefit payments until the overpayment was cured.  Now the rate at which such overpayments will be recovered is limited to the greater of 10% of the benefit amount or $10.00.  That’s a big change, and a good change for people who live on very little and who face extended periods of abject poverty as a result of errors, often of no fault of their own.

Well Done

Both of these changes make for kinder and more forgiving SSA rules.  Good for the SSA and good for the organizations and advocates who brought this about, including, but not limited to, CT’s own Chris Smith.


Share This Post with Friends
mm By: Doug Chalgian
Doug Chalgian

Leave a Reply

Your email address will not be published. Required fields are marked *


Follow Plan To Be 100

Sign up to follow Plan To Be 100 and get notification of new posts!