Pooled Income Trusts

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A special kind of trust in New York, called a Pooled Income Trust, can be used to protect what Medicaid calls the “surplus” income you receive each month.  Income is not a factor in determining Medicaid eligibility; however, Medicaid has rules regarding your income, once you are receiving services.

Most senior citizens receive Social Security every month, and many have pensions and receive income distributions from their retirement accounts.  Medicaid limits the income you are permitted to retain for your unrestricted use for an individual who is receiving Medicaid services in the community.  Click here to find the current limit.  (This number usually increases by a small amount each year.)

If you are an individual who needs home care, and do not plan, Medicaid requires that you contribute every dollar of “surplus income” toward the cost of your care.

Download our Community Medicaid Handout

Few people in New York can live on the limit imposed by Medicaid.  Once again, trusts come to the rescue.  With a Pooled Income Trust, you can retain the benefit of all your income and have Medicaid pay for home care.  Here’s how it works:

Pooled Income Trusts can be established with certain non-profit organizations that are authorized to operate them for the benefit of disabled persons.  If you are over 65 years of age, and need care, you will almost surely qualify for this type of Pooled Income Trust for Medicaid in New York.

For investment and management of funds, your income is “pooled” together with the income deposited by other participants.  However, your Community Medicaid Pooled Trust contributions are held in a separate account, segregated for your needs only.
Once your income is deposited into your Pooled Income Trust account, the account manager will pay your bills using this money.  As an example, let’s say your income comes from Social Security and pension benefits, and is $1,000 over the Medicaid limit.  The “surplus” amount over Medicaid’s limit is sent to your trust account every month.

The Medicaid compliant Pooled Trust will follow your instructions on what expenses to pay, as long as they are for your personal benefit and permitted under the rules of the trust.  Some of these Pooled Trusts will give you a debit card to use for your groceries or other needs.

Through the Pooled Income Trust, your “surplus” income can be used for food, monthly rent or to pay your mortgage, phone, utilities, or home repairs.  Pooled Income Trust allowable expenses include just about anything you’d normally pay for (except medical insurance and many medical bills).

You should not be shy about asking the trustees to pay for anything you want.  Again, the only real limitation of Pooled Income Trust allowable expenses is that the expenditure must be for your benefit, not for anyone else.

The non-profit organization essentially functions as a bill paying service, and takes a monthly processing fee.  When you pass on or if you move into a nursing home, whatever is left in your Community Medicaid Pooled Trust account will be used by the organization for charitable purposes.

The net result of using a Pooled Income Trust is that you’re able to protect your surplus income and spend this money as you would almost as if it were in your own bank account.  You retain your lifestyle while still qualifying for Medicaid benefits.

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