A popular question we often receive is, "If I apply for Medicaid is my home…
If you are receiving, or are applying to receive, community Medicaid benefits, a Pooled Income Trust is an important planning tool to consider.
For 2013, the Medicaid monthly income allowance is $820 per month. Any income above the $820 per month is considered “excess income” and must be paid to Medicaid or the home care agency providing services in order for Medicaid to pay for your care. But, how are you supposed to pay your monthly bills and expenses without your full income?
Medicaid has carved out an exception to this income rule… the Pooled Income Trust. For your information, the Theresa Pooled Trust is one of about 20 Pooled Income Trusts in New York.
So how does a Pooled Income Trust work?
A Pooled Income Trust is a trust set up with a charity that allows you to protect your “excess income.” Each month, you, the recipient of community Medicaid benefits, deposit your excess income (anything above the $820) into the pooled income trust. You then submit your bills to help pay for your living expenses in an amount totaling the excess income less the trust’s monthly maintenance fee to the pooled trust company and the Pooled Trust company pays the bills from your monthly deposit. This allows you to use your income to pay for your monthly expenses and help a charity in the process.
For example, if you are on Medicaid home care and your income is $1,820 per month, Medicaid permits you to keep $820 and $1,000 is your “excess income” and will be due to Medicaid or the home care agency providing your benefits each month. With a Pooled Income Trust, instead of paying the $1,000 to Medicaid or the home care agency, you will deposit it into your Pooled Income Trust account.
Let’s say that the monthly trust maintenance fee is $70. The $70 is deducted from the $1,000 “excess income” leaving $930 in your pooled trust account. You will then submit your monthly bills and expenses totaling $930 to the trust company to be paid from your “excess income.” Therefore, you are able to use your “excess income” to pay for your bills and expenses instead of spending it down on your care which can be covered by Medicaid.
If you are interested in receiving more information about Pooled Income Trusts or would like to set up a Pooled Income Trust to protect your income, please contact one of our experienced attorneys to schedule a meeting.