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SSI POMS: OVERVIEW OF CHANGES MADE APRIL 30, 2018

I. INTRODUCTION          

On April 30, 2018, the Social Security Administration amended the Program Operations Manual System (POMS) to clarify current Social Security Administration policy concerning trusts established by and for an SSI recipient.  This policy is important because a state such as New York, where an SSI recipient is automatically eligible for SSI, may not have policies more restrictive than that of the SSI program. The following are the Social Security Administration’s current interpretation of the SSI statute:

II. POLICY ON TRUSTS AND/OR PAYMENTS FOR THE BENEFIT OF, ON BEHALF OF, OR FOR THE SOLE BENEFIT OF AN INDIVIDUAL:  SI01120.201F.            

            A. Background

The federal statute that authorized first party SNTs, 42 U.S.C. 1396p(d)(4)(A), required that they be used for the benefit of the beneficiary with a disability.  The federal statute that authorized pooled trusts, however, 42 U.S.C. 1396p(d)(4)(C), required that they be used for the sole benefit of the beneficiary. Nonetheless, the SSA issued POMS requiring that all first party trusts, whether pooled trusts or first party “payback” trusts be used for the sole benefit of the beneficiary. Although New York State policy, 96 ADM-8, was less restrictive than the SSA interpretation by requiring that funds only be used primarily for the benefit of the beneficiary, local Departments of Social Services relied upon the POMS to insist that use of the SNT for purposes other than solely for the benefit of the beneficiary was impermissible.

            B. POMS has changed and advise that a first party trust may be used primarily for the benefit of the beneficiary and still be considered to be used for the sole benefit of the beneficiary.

The POMS explains that the sole benefit provision means that no one but the beneficiary may benefit from the trust during his/her lifetime.  SI 01120.201F.1.  Now, however, the POMS clarifies that payments to a third party for goods or services that are  for the primary benefit of the trust beneficiary are considered for the sole benefit of the beneficiary.  Sole benefit of the beneficiary thus does not mean that there may be no collateral benefit to anyone else.  Examples given are that others may watch a television or  reside in a home purchased with trust assets,  and that the use of the trust  to purchase these items  is encompassed within the term “ sole benefit.” SI 01120.201F.3.a.

            C. A third party service provider can be a family member, and SSA workers should apply the same standard of review to services provided by a family member as to those provided  by a non-family member or by a professional services company in examining whether such expenditures are permissible. SI01120.201F.3.a.

The POMS now acknowledge that  payment for companion services can be a valid expense. Id. The POMS further direct that a caseworker should not routinely  investigate the reasonableness of a service provider’s compensation, and should not to request income tax information from the service provider or evidence of medical training or certification for family members.

            D. Travel expenses, such as transportation, lodging and food, for companions of a beneficiary needing assistance to travel due to his/her age, medical condition or  disability is a permissible expenditure. SI01120.201F.3.b.

            E. Payment of travel expenses to visit a trust beneficiary is permissible to ensure the safety or medical well-being of the trust beneficiary. SI01120.201F.3.c.

Prior POMS had declared that these were not permissible expenditures, and court cases had upheld this interpretation.  Now the use of trust assets to pay for the travel of a Guardian or Trustee to oversee the care of the beneficiary and to enable the fiduciary “ to exercise his or her fiduciary duties” is also within the sole benefit rule. Id.

            F. Compensation to the trustees and reasonable investment, legal or other services with regard to the administration of the trust is permissible.  SI01120.201F.3.d.

 III. CLARIFICATION AS TO THE USE OF CREDIT CARDS AND DEBIT CARDS SI01120.201 I

            A. Credit cards

A trust may pay a credit card bill for the benefit of the beneficiary.  So long as the credit card has not been used for food and shelter, there is no income to the beneficiary that affects his/her SSI benefit. SI 01120.201 I (1)(d). A trust may also pay a credit card owned by a third party for items paid for by the third party for the beneficiary. The trust may also reimburse the third party directly. SI 01120.201 I (1)(g).

            ISSUE:  Some courts now require prior approval before a Guardian/Trustee may be reimbursed for expenses s/he placed on his/her own credit card for the beneficiary. This makes Guardianship/Trust administration particularly difficult when the personal needs guardian and the Trustee/Property Management Guardian are different people,  and the personal needs guardian provides for routine expenses for the beneficiary. 

            B. True Link Financial Cards

So long as the card is owned by the Trustee, the IP/Beneficiary’s  use of a True Link card  will not result in countable income,  and the card will not be considered an available asset of the beneficiary.  This is particularly helpful for an IP who has capacity but cannot secure his/her own credit card due to a poor credit history. SI 01120.201 I (1)(e).  The card cannot be used to obtain cash or to pay for food and shelter, of course, without resulting in countable income.

The beneficiary should not be the owner of the card.   If the beneficiary is the owner of the account, then the disbursements are unearned income and the balance is a resource. Id.

IV. TRANSFERS TO AN ABLE ACCOUNT FROM AN SNT DO NOT RESULT IN INCOME TO THE BENEFICIARY.  SI 01120.201 I (1)(h.).

CONCLUSION: Now that first party SNTS are 25 years of age, the Social Security Administration  has modified its interpretation of SSA policy to enable the SNT beneficiary to enhance his/her quality of life through the use of the trust.

Jay Robert