Food and Shelter

Securing appropriate housing for all persons with disabilities in California is a challenge.   Care must be given in balancing the amount of rent with the affect of the expenditure on the beneficiary’s eligibility for benefits. In the event that an expenditure will cause a reduction in benefits, one must take such reduction into consideration.

 

3 Step Process

There are many publications that assert that a Special Needs Trust cannot pay for food or shelter items. In reality Pooled Special Needs Trusts can be used for food and shelter – but first the beneficiary advocate must follow this 3 step process.

 

·         Step 1 – Find Out Exactly What Benefits the Beneficiary is Receiving

·         Step 2 – Evaluate the Consequence of the Distribution on the Benefits

·         Step 3 – Report to the Proper Agency

 

Step 1 - Determine What Benefits the Beneficiary is Receiving

In most cases maintaining eligibility for Medi-Cal and IHSS (In Home Support Services) is of primary importance for the beneficiary’s well being. In many cases the beneficiary accepting financial assistance for their food and shelter can affect eligibility for these programs. The first question that must be analyzed is whether these benefits are based on SSI or Medi-Cal rules? There are 2 common methods of qualifying for Medi-Cal.

 

Step 2 – Evaluate the Consequence of the Distribution on the Benefits

The most common method of qualifying for Medi-Cal is through qualifying categorically by receiving at least one dollar of SSI. Another way of qualifying is through the Aged & Disabled Federal Poverty Level Program or Medi-Cals Share of Cost program.

 

Beneficiaries Receiving Medi-Cal Based on SSI Eligibility

Payment of food or shelter from the trust account will reduce the beneficiary’s SSI dollar for dollar capped at what the SSA calls the Presumed Maximum Value (PMV) In 2009 – the PMV is $244.66. This amount changes slightly each year. In some cases, a loss of $244.66 is a minor price to pay and in other cases the reduction would be devastating.

 

10 Items Used to Determine ISM for Beneficiaries Receiving Medi-Cal Based on SSI Eligibility

When computing household operating expenses for ISM or the following 10 items are the only ones used in the applicable computations.

·         Food

·         Mortgage (including property insurance)

·         Real property taxes (less any tax rebate/credit)

·         Rent (note – you were missing a return here)

·         Heating fuel

·         Gas

·         Electricity

·         Water

·         Sewer

·         Garbage removal

 

Example Where Payment of Rent Might be Advisable

Jane receives $845 of SSI. She asks Bob – her beneficiary advocate to have her trust account pay her rent of $1,200. Jane understands that her benefits will be reduced by $244.66 – but she feels that the benefit of living in a decent apartment outweighs the reduction of her SSI.

Bob submits the distribution request with a signed acknowledgement from Jane that she understands there will be a reduction of her benefits and she is responsible to report to SSA that her trust account is paying the landlord directly.

 

Example Where Payment of Rent May Not be Not Advisable

Jane receives $845 of SSI.  She asks Bob – her beneficiary advocate to have her trust account pay her rent of $250 a month. Jane’s SSI will be reduced by $244.66 – meaning that she is receiving no real benefit.

 

Example Where Payment of Rent Eliminates SSI

Jane receives $800 of SSDI and $65 of SSI. She asks Bob – her beneficiary advocate - to have her trust account pay her rent of $1,200 a month. Payment of her rent will cause complete loss of SSI but will not affect her SSDI. Bob and Jane might elect to have the rent paid by her account, but she will need to maintain her Medi-Cal eligibility without SSI. Note – in this example if Jane elects to lose her SSI and maintain her Medi-Cal independently she will need to apply to her local county Medi-Cal office.

 

Beneficiaries Receiving Medi-Cal Based Without SSI Eligibility

Countable income for Medi-Cal eligibility generally follows Social Security’s rules but there is a slight variation when a payment is made in kind for support and maintenance. California law states – “Income in kind is any support or maintenance received in kind from a person other than a responsible relative for:

·         Housing

·         Utilities

·         Food

·         Clothing

California law goes on to say that income in kind shall be considered income only if the entire item of need is provided."

 

Medi-Cal Eligibility Rules

To qualify, you must:

Be aged (65+) or meet Social Security's definition of disability

Have less than $2,000 in assets for an individual ($3,000 for a couple).

Meet a Resource test similar to SSI (see table)

 

Maintenance Family Budget Unit Number of Members	HOUSING	UTILITIES	FOOD	CLOTHING
1	$153	$33	$86	$27
2	$206	$38	$182	$49

Income as it Relates to Medi-Cal

The income limits vary according to family size and program category. Income is used to determine if a person/family is eligible for Aged & Disabled Federal Poverty Level Program Medi-Cal or Medi-Cal with a share of cost.

 

Aged & Disabled Federal Poverty Level Program – Income Rules

To qualify, the beneficiary must have less than $1,133 in countable monthly income for an individual ($1,525 for a couple) in 2009. If a beneficiary’s monthly income is higher than $1,133 the beneficiary may still be eligible for Medi-Cal with a share of cost (SOC).

 

Aged & Disabled Federal Poverty Level Program with a Share of Cost

A share of cost is similar to a monthly deductible. It is the amount of Medi-Cal expenses that a Medi-Cal beneficiary must pay or be obligated to pay before Medi-Cal will cover any Medi-Cal expenses. However, if Medi-Cal is not used in a given month, no share of cost will need to be paid in that month. Under the Medi-Cal with a Share of Cost (SOC) Program, the beneficiary must pay the SOC amount in any month Medi-Cal costs are paid. After the SOC is paid, Medi-Cal will pay the remaining Medi-Cal bills for that month.

The SOC is paid only for the months the beneficiary has Medi-Cal expenses. The SOC is determined according to the beneficiary’s monthly income minus subtracts $600 for an individual or $934 for a couple from the beneficiary’s monthly income, and any other health-insurance premiums the beneficiary pays.

 

Share of Cost (SOC) Medi-Cal ISM Example

Barbara has a monthly income of $1,150. Because her monthly countable income is greater than Medi-Cal subtracts $600 for an SOC of $550. Barbara must pay at least $550 in covered Medi-Cal expenses and/or health care premiums in a given month before Medi-Cal covers any of her Medi-Cal expenses for that month.

 

Example - Golden State Pooled Trust Pays Entire Rent

Barbara wants her trust account to pay her rent of $1,000 a month. Barbara receives $1,100 a month in SSDI. She also receives Medi-Cal under the Aged & Disabled Federal Poverty Level Program

If the trust pays the full $1,100, then her countable income will be $1,100 plus $153 (see Medi-Cal ISM Table for 2009) which makes her countable income $1,253.  Since $1,253 is greater than the $1,133 limit under the Aged & Disabled Federal Poverty Level Program she will have a share of cost of $653 ($1,253 - $600). If she pays $20 of the rent out of her own pocket, and her trust pays the remaining $980, then the payment of rent does not affect her eligibility

 

Step 3 – Report to the Proper Agency

If the payment of housing is reportable then the Benefits Recipient, or the Representative Payee must report to the proper agency. If the beneficiary is receiving SSI then a report must be made to the Social Security Administration.