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May 2024


From The Certified Elder Law Attorney's Desk:





Trusts for Persons with Disabilities: By Accident or Mistake, or by Decision








William W. "Bill" Erhart


Blog Spotlight:



Food No Longer to Be Considered In-Kind Support and Maintenance for SSI Benefits




By: Catherine Read



May 13, 2024

Calendar of Events


Article of Interest:



What is Uber Caregiver? First Look at New Product Launching this Summer.




The new feature, Uber Caregiver, can help get loved ones to doctor's appointments by tapping into health insurance benefits.




May 16, 2024, Source: TODAY

By Sarah Jacoby






Inspirational Quote


Our Team


From The Certified Elder Law

Attorney's Desk:


William W. “Bill” Erhart








Trusts for Persons with Disabilities: By Accident or Mistake, or by Decision

About 13.5 percent of the U.S. population has some type of disability. Around 46 percent of Americans over age 75 live with some disability. The most common disability affects one’s ability to ambulate. About 4.7 percent aged between 21 and 64 years and 30 percent of people aged 75 or older have some limitation moving. However, the most common disabilities among those 20 years and below are cognitive. These include hearing, concentrating, remembering, and decision making.


Helping those with disabilities, whether because of genetics, age, or trauma, is the mission of our practice.


Every day, we receive calls from or have consultations with people who need help regarding disabilities, whether for themselves or their family members. Sometimes clients come to us because they are proactive and contemplate careful planning for their loved ones. But often we meeting with people as the result of something outside their control. That is an accident. 


We represent many injured people who suffer disabilities because of the carelessness or miscalculation of others. Personal Injury (PI) settlements can result in trusts that are created out of necessity due to an accident. There is no choice. No one plans to be hurt. We draft many settlement trusts. There are several variants to settlement trusts.


But of decision, accident, and mistake trusts – the saddest is the mistake trust. The mistake trust occurs when someone, usually a parent or relative who cares for a person with a disability, fails to plan. The inheritance is left outright in the name of the disabled. Or the inheritance is left in a general needs trust. Either of those mistakes puts the child in danger of losing their benefits or disqualifying them for future benefits.


But what can be done about the mistake trust?


The first is the simplest, which is to do nothing for asset preservation and transfer all the assets to Beneficiary. This will result in the loss of benefits or disqualification from them.


The second, more traditional method, is to create a first party trust. First party means the trust is created with Beneficiary’s money. A first party trust created under the Medicaid rules is known as a d4A trust. They are named after the federal statute which authorizes their use. 42 U.S.C. § 1396p (d)(4)(A). While placing Beneficiary’s money in such a trust would make one eligible for public benefits, it will result in immediate taxation of the qualified funds. Additionally, upon Beneficiary’s death, any funds that remain in trust will be first payable to the State and then to Beneficiary’s family. When there is a PI settlement or inheritance left outright to a person, the only solution is a first party trust. First party means the recipient has ownership.


The third, and most advantageous way, is to create a third-party trust. Third party means the trust is created with money and assets other than Beneficiary’s. With a third-party trust, the trustee has complete discretion how the funds are distributed. The trustee can distribute directly to Beneficiary and disregard any public benefits or make distributions in such a fashion the public benefits are preserved.


A third-party trust can be created as a Qualified Disability Trust which has an enhanced income tax exemption for more favorable income tax treatment. We frequently use Qualified Disability Trusts to receive distributions from qualified funds or IRAs to reduce income taxes. 


Sometimes mistakes can be fixed. Even in the oddest circumstances. For example, assume a divorce occurs where one of the spouses has a disability or is chronically ill.


Husband and wife get divorced. There is a property settlement order. It is a typical 60/40 split. But former wife, getting 60% has a disability. She is already on Medicaid. The 60% consists half of IRA money and half non-IRA. She will get knocked off Medicaid unless she creates and puts the money in a first-party d4A trust with the payback provision. When she dies, the State will have a claim on the trust before her children. But what if the funds were placed in a third-party supplemental needs trust?


To create a third-party trust, husband and wife will need to go back to Family Court and modify the property settlement. The simple version is they modify the property division order. Husband gets all the assets. Instead of assets, wife gets a large monthly alimony payment. The payment will reduce or eliminate benefits. But both former spouses go back to court one more time to commute the alimony agreement for a cash settlement to the former wife. The cash from the commutation is paid into a third-party trust created by the former husband. All this is approved by court order. The third-party supplemental needs trust is discretionary. The trustee, someone friendly to the wife, has the authority to make distributions on behalf of the former wife so no benefits are lost. There is no pay back provision to the State as a third-party trust is not a d4A trust. When the former wife dies any remaining trust assets go to the children from the former marriage. Both former spouses and their family are significantly better off.


We can counsel and fix the failure to plan. A general needs trust can be modified into supplemental needs trusts without incurring a penalty from the State. And under the right circumstances, direct ownership can be corrected as well. 


Food No Longer to Be Considered In-Kind Support and Maintenance for SSI Benefits


Monday, May 13th, 2024 by Catherine Read


In March 2024, the Social Security Administration issued a new rule that favors disabled individuals applying for or receiving Supplemental Security Income (“SSI”). Under the new rule, starting September 30, 2024, food will no longer be considered in-kind support and maintenance (“ISM”) in ISM calculations.


This is a major improvement for SSI recipients: food given to them will no longer count in ISM, reporting and recordkeeping will be simplified, and trustees of special needs trusts will be permitted to disburse trust funds to buy food for trust beneficiaries who receive SSI.


The Social Security Administration is Working on SSI

The rule change is part of a wide-ranging effort by the Social Security Administration to change how it handles nuances of the SSI program. In April 2024, other rule changes modified rent subsidies and how Social Security factors in support from other public assistance programs, both outside the scope of this article.


Changes making it easier to remain eligible for SSI have an added benefit: less risk of losing your Medicaid. This is because, in Delaware and many states, the eligibility requirements for SSI and Medicaid are the same. If you are eligible for SSI, you are automatically eligible for Medicaid.

For purpose of simplicity in this article, we focus only on SSI and the coming change regarding food.


What is SSI?

Let’s start with what SSI is not. SSI is not Social Security Disability Insurance or Disabled Adult Child Social Security benefits, which do not depend on an individual’s income and resources.

SSI does depend on an individual’s resources and income. SSI is a means-based government benefits program. SSI provides monthly payments to disabled individuals, or adults 65 and over, subject to means tests.


SSI benefits are intended to pay for basic needs including shelter, food, clothing, and medicine.


SSI Eligibility

In general terms, to be eligible for SSI, you must:

(1) be disabled (as defined by the Social Security Administration) or 65 or over,

(2) earn less than $1,971 per month, and

(3) have under $2,000 (or $3,000 for a married couple) in available resources.

Many qualifications to these basic rules exist, making SSI eligibility complex.


SSI Reporting

Once you qualify for SSI, you must report your earnings (including wages) to maintain eligibility.


In-Kind Support and Maintenance

You must also report any “in-kind support and maintenance” (“ISM”) you receive. ISM includes support that family and friends give you. “Support” in this context includes shelter and food. For example, if you are living in another’s home for free or reduced rent, that shelter is considered ISM as unearned income and affects your eligibility and may reduce your SSI benefits.


ISM can be difficult to understand. The guiding principle is the government expects you to use your SSI to pay in full for your own shelter and food expenses: if someone else pays any part of shelter or food for you, your SSI should be reduced (says the government).


That’s why if someone pays your rent, mortgage, water, sewer, electricity, or property taxes – that affects your eligibility and payment amount. It is “shelter” and you’re supposed to use your SSI to pay for that yourself.


But if someone buys you a new stove, or pays your cable or internet or cell phone, those payments are not a problem because they are not considered ISM.


Food

Food always has been a problem. If someone takes you out to dinner or buys your groceries, that is ISM – affecting your SSI eligibility, reducing your payment, and requiring reporting.


New Rule on Food

Under the new Rule to take effect on September 30, 2024, the Social Security Administration will no longer include food as ISM. That removes a barrier to eligibility and simplifies recordkeeping and reporting.


The new Rule means family members can take you out to dinner, or buy you groceries. The new Rule also means the trustee of your special needs trust can disburse trust funds to pay for your food – a big change.


One question will remain on the SSI application about receipt of food for the narrow purpose of determining the reduction formula (value of the one third reduction rule or presumptive maximum value rule).


According to the Social Security Administration blog posted March 27, 2024 at ssa.gov:

“Under the final rule, beginning September 30, 2024, the agency will no longer include food in ISM calculations. The new policy removes a critical barrier for SSI eligibility due to an applicant’s or recipient’s receipt of informal food assistance from friends, family, and community networks of support. The new policy further helps in several important ways: the change is easier to understand and use by applicants, recipients, and agency employees; applicants and recipients have less information to report about food assistance received from family and friends, removing a significant source of burden; reducing month-to-month variability in payment amounts will improve payment accuracy; and the agency will see administrative savings because less time will be spent administering food ISM.”


Not Effective Yet

Remember, the change is not effective until September 30, 2024 when the proposed rule becomes final. In the meantime, follow existing SSI rules regarding food, including recordkeeping and reporting.

CLICK HERE TO ACCESS ALL OF THE EAELS BLOGS
  • May 2nd – Paralegal Cathryn Farwell celebrated 8 years with EAELS!
  • May 3rd & 4th – Attorney Catherine B. Read participated in the 2024 National Academy of Elder Law Attorneys where she sharpened her skills and knowledge to be of deeper service to our Clients.
  • May 22nd – Administrative Assistant Spencer Boyle celebrates his 1 year anniversary with EAELS!

What is Uber Caregiver?

First look at new product launching this summer.




The new feature, Uber Caregiver, can help get loved ones to doctor's appointments by tapping into health insurance benefits.


May 16, 2024, Source: TODAY

By Sarah Jacoby


Becoming a caregiver can be a sometimes unexpected — and costly — challenge. But a new tool from Uber, called Uber Caregiver, is designed to make getting your loved ones' rides and medication a little easier.


Launching this summer, the new feature will let caregivers help coordinate recipients' care with rides, medications and more.


The program was developed by Uber Health lead engineer Jeremy Hintz and his team — with his grandparents in mind. After Hintz’s grandfather suffered a stroke, he could no longer provide care for his wife, who has dementia. So Hintz's mother stepped in to became their primary caregiver.

“All this actually came out of a phone conversation I was having with my mom about the things she needed help with day-to-day,” Hintz told NBC’s senior consumer investigative correspondent Vicky Nguyen in TODAY's exclusive first look at the product. “We have Uber and Uber Eats; why can’t we can tap into health care benefits, too?”


Hintz’s mother and grandparents were among the first to test out an early version of Uber Caregiver, which helped inform the design of the final product rolling out this summer.


What is Uber Caregiver?

Uber Caregiver is a new feature in the Uber and Uber Eats apps launching this summer that will allow caregivers to use health insurance benefits to arrange and pay for eligible rides to doctor's appointments for their care recipient and track the ride.


In the future, the tool will also allow caregivers to manage grocery and over-the-counter item delivery, including medicines and medical equipment, according to the company.


Both the caregiver and recipient can track the progress of rides and purchases. A three-way chat feature in the app allows the caregiver, rider and driver to stay in communication. And the caregiver receives a notification when the rider has made it to their destination safely.


The company plans to cover:

  • Customers age 65 and older with Medicare Advantage,
  • Medicaid recipients and
  • People with eligible commercial insurance via their employer


How to get Uber Caregiver

Starting Wednesday, May 15, 2024, caregivers and care receivers can sign up to be notified when their insurance provider is added as an Uber Caregiver partner.

To set up Uber Caregiver, the care recipient adds their health benefits card to their wallet in both the Uber and Uber Eats apps. Health benefits cards are pre-funded debit cards issued by health insurance plans that can be used on eligible health care expenses, such as co-pays, prescriptions, medical devices, transportation and more. Coverage varies by plan.



Once the card is added, the care recipient can designate a caregiver from their existing contacts or by adding their contact information.

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