Do you have too much Income?
Do you have too much income? I sometimes find that a client, or a client’s loved-one, has too much income to get Medicaid coverage for assisted living or nursing home care. Medicaid requires an applicant to have less than $2,000.00 in assets, and no more than $2,163.00 in monthly income. Sometimes, particularly with a widow or widower, monthly social security and pension payments exceed the $2,163.00 threshold. Medicaid is very unforgiving on this amount; even if you are over the threshold by a few dollars, you will not be eligible for Medicaid.
What can we do?
Create a Qualified Income Trust, sometimes called a “Miller Trust”. Named after a 1990 Federal District Court case, a Miller Trust is assigned (paid) part of an individual’s monthly income, such as Social Security and pension payments, thus reducing his or her monthly income. This allows the individual to qualify for Medicaid.
This is new for New Jersey. Prior to September, New Jersey followed the Medically Needy Program, which allowed the excess income to be used to pay medical bills as an income spend-down. This is no longer permitted in New Jersey. You must have a Miller Trust.
Here is how a Miller Trust works:
Currently, New Jersey has an income cap of $2,130.00 per month in order to qualify for Medicaid. Mrs. Jones has an income of $2,430.00, or $300.00 over the Medicaid eligibility income cap. However, if Mrs. Jones assigns $310.00 of her Social Security to a Miller Trust, she would be $10.00 under the cap, and she would then be eligible for Medicaid. The money in the Trust must be used to pay for her medical care, which can include nursing home and in-home care expenses.
Miller Trusts are accepted as long as they meet the following qualifications:
1- The Trust is composed only of Social Security, pension, or other income to the individual, and any income earned in the trust; and
2- The State must be the remainder beneficiary of the trust. Upon the death of the person for whom the trust is established, any money remaining in the trust is paid to the State of New Jersey, up to the amount the State has paid out Medicaid benefits.
This is a great relief to the family and the individual who needs this care.
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