More on Special Needs Trusts from the Social Security Administration
We have a few more nuggets from the head of Program Policy at the Office of Income Security Programs at the Social Security Administration, Eric Skidmore. Mr. Skidmore participated via webcam at the Stetson College of Law’s Special Needs Trust National Conference on Friday, October 19, 2012.
There was a reaffirmation that a Special Needs Trust (SNT) cannot reimburse any person directly for expenses incurred on behalf of a SNT beneficiary that is receiving SSI benefits. This would be considered in-kind income to the beneficiary and thus reduce SSI dollar-for-dollar.
Two other issues that were explored in more depth were the payments to family caregivers out of a SNT and the use of funds in a SNT to pay back an overpayment to the Social Security Administration (SSA). First, Mr. Skidmore clarified that the agency is not changing or adopting any new policies regarding payment of family caregivers. There are no formal requirements that family members have any special training to be paid for services. The sole requirement is that the beneficiary is the person that solely benefits from the services. This has always been the policy.
Next, here is where rational thought goes out the window. Clearly and unequivocally, Mr. Skidmore stated that you cannot pay an overpayment from a SNT. An overpayment is when SSA has determined that an SSI recipient had not been eligible for a check (or multiple checks) but was paid inappropriately. SSA then seeks to recover payments made in error (overpayments). For an unknown reason, SSA is saying that paying back the debt to SSA from a SNT violates the sole-benefit rule. When pushed as to who else benefits, the only mention was that SSA benefits. This is entirely absurd, but nevertheless is SSA’s policy. The alternative is to have the amount recovered from future SSI checks but such recovery can only occur at a maximum payment of 10% of the beneficiary’s monthly check (a maximum of about $70 per month). This can take years or even decades in some cases.
Finally, we previously posted regarding a written change (clarification according to SSA) in policy that states that a SNT cannot state in the document that it will pay to have family members come and visit the beneficiary. When pressed further on this subject with the question “but what happens if a SNT pays for such expenses, even though the SNT document doesn’t specifically address such payment?” The answer was that the SNT then violates the sole benefit rule and is a countable asset. When asked how one would go about fixing this issue there was no answer, other than stating that it could not be fixed. This again makes no sense. A reasonable view would be that for the month when such a payment was made the trust counts as a resource, but when a SNT does not make such payments the SNT should be exempt (assuming it meets all other requirements). That was not the answer SSA gave. So once again we are left guessing. Mr. Skidmore has agreed to participate in the March 2013 National Program for the Academy of Special Needs Planners. I am on the steering committee for the program and will keep you posted if we get any better clarification on these issues.
Travis D. Finchum
Florida Bar Certified Elder Law attorney, Co-Trustee, Guardian Trust