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Senate GOP’s Medicaid cuts would slash aid for special needs kids

By dailymail / Published on Tuesday, 27 Jun 2017 20:31 PM / No Comments

Medicaid and Supplemental Security Income are instrumental in special needs planning, but beneficiaries face “means testing” in order to qualify for these benefits.

Individuals with more than $2,000 in assets and couples with more than $3,000 won’t qualify for the SSI program.

This year, the monthly maximum for SSI benefits is $735 for an eligible individual and $1,103 for a couple. In most states, a child eligible for SSI can also obtain Medicaid to cover medical services and special health care needs.

To maximize available resources, family members can set up a third-party special needs trust and fund it with assets that aren’t owned by the child, including life insurance and other property.

This way, the child is still eligible for SSI and Medicaid benefits. Upon his or her death, assets remaining in a third-party special needs trust can go to other family members or to charity.

A benefit of the third-party special needs trust — which is also known as a supplemental needs trust — is that assets that remain after the demise of the disabled individual do not have to be paid back to Medicaid.

This is because the assets never belonged to the beneficiary in the first place.

On the other hand, in a self-settled special needs trust — which holds assets that belong to the beneficiary — Medicaid will need to be reimbursed after the disabled person’s death.