»  Social Security Changes Its Position on Reimbursements

Social Security Changes Its Position on Reimbursements

Moorestown, NJ (Law Firm Newswire) March 26, 2012 – The Special Needs Task Force worked with Social Security to change how it reimburses third parties.

Historically, the Social Security Administration (SSA) permitted parents or other family members of disabled beneficiaries of special needs trusts to buy items for the beneficiary and be reimbursed from the special needs trust. Of course, the family members were required to keep receipts and records of these purchases and furnish them to the trustee. Items might include clothing and other relatively small items that were easier for the parent to pick up and pay for than to request a distribution from the trustee directly to the provider of the goods or services.

In the spring of 2012, the SSA stated that such items of reimbursement were “unearned income” to the trust beneficiary. This had the effect of reducing the SSI payment to the trust beneficiary dollar-for-dollar and, if the reimbursement items exceeded the maximum federal benefit rate (2013 rate is $710 per month for an individual), then the SSI payment was lost. If the trust beneficiary’s Medicaid was linked to SSI, then Medicaid was lost as well.

On May 21, 2012, SSA contended that it was “clarifying” the Program Operating Manual System (POMS) and began reducing and eliminating benefits of the disabled. It is the document that Social Security eligibility workers look to for guidance. While technically, the POMS do not have the force of law, they are given great deference by the courts and are followed scrupulously by eligibility workers. The effect of this clarification by SSA was chaos for trust beneficiaries with disabilities, as well as parents and trustees.

“In response, an advocacy group was assembled, led by the Special Needs Alliance,” stated Thomas D. Begley, Jr., New Jersey estate planning attorney and founding president of the Special Needs Alliance. “The Task Force held a series of meetings with SSA and was able to convince SSA that the policy enunciated in the spring made little sense and worked a hardship on all involved.”

On February 8, 2013, the POMS were changed, authorizing a special needs trust to reimburse a third party, such as a parent or other family member, for expenditures made on behalf of the special needs trust beneficiary with disabilities. Such distributions for reimbursement are no longer considered unearned income. The changes are found at POM SI 01120.200.E.1.d and POMS SI 01120.201.I.1.f.

This change brings a sigh of relief to trust lawyers, beneficiaries and trustees alike. The Task Force continues to work with SSA in identifying primary issues such as this and advocate for the clients it serves.

To learn more about Begley Law Group call 1.800.533.7227 or visit www.begleylawgroup.com.

Begley Law Group, P.C.
509 S. Lenola Road, Building 7
Moorestown, NJ 08057
Tel: 800.533.7227


  • ADVANTAGES AND DISADVANTAGES OF STRUCTURED SETTLEMENTS
    by Thomas D. Begley, Jr., Esquire, CELA Advantages of Structured Settlements There are a number of potential benefits to an injured plaintiff in utilizing a structured settlement: Fiscal Restraint. The structured settlement prevents the injured plaintiff from squandering the settlement. Many clients receiving personal injury settlements have never had money, have never learned financial discipline, and tend squander the funds in a short period of time. Tax-Free Income. Income from the Structured Settlement is income tax-free, if it is for a physical illness or sickness. Lifetime Income. A lifetime payment structure can provide lifetime income to the plaintiff. Alternatively, a [...]
  • MILLER TRUSTS
    by Thomas D. Begley, Jr., CELA New Jersey is an income cap state for purposes of nursing home level of long-term care services. Nursing home level of services includes nursing homes, assisted living and most home care. The income cap is 300% of the Federal Benefit Rate (FBR). For 2015, 300% of the FBR is $2,199. This figure is indexed for inflation. This means that if an individual’s income exceeds $2,199 in 2015, they would not be eligible for Medicaid long-term care services. Historically, individuals with income in excess of the income cap were eligible for Medicaid in a nursing [...]
  • Planning for Long-Term Care
    By Thomas D. Begley Jr. WHAT SHOULD YOU KNOW ABOUT LONG-TERM CARE? Long-term care is an area of growing concern to older Americans and their families. Approximately 70% of individuals age 65 or older eventually require some form of long-term care. Whether that consists of home healthcare, assisted living or nursing home care, the costs can be substantial. Without adequate planning, long-term care costs can quickly deplete a lifetime of savings. That, in turn, can jeopardize the financial security of a surviving spouse and undo any plans for transferring wealth to children. Given the complexity of long-term care planning and [...]

See other news sources publishing this article. BETA | Tags: , , , , , , , , , , , ,



Get headlines from Law Firm Newswire sent right to your inbox.

* indicates required