Many clients, and people who attend our presentations, have questions about how a Pooled Income Trust (“PIT”) works.  These Trusts are indispensable tools for managing your income if you need Community Medicaid services.  Using a PIT is not complicated, once you get used to using it, but it requires thinking about your income in a different way. 

The process is explained below, and we’ve also created a flow chart infographic.  The flow chart will help you visualize the different ways income is spent under different scenarios.

A. Before You Need Community Medicaid:

If you are not receiving Community Medicaid, there is no reason to have a Pooled Income Trust.  All your income comes to you, and you can spend it however you want.  Usually, people think about their expenses as falling into two categories:  necessary expenses, and discretionary expenses. 

Necessary expenses typically include rent, utilities, phone, groceries, taxes, home maintenance, and the like.  Discretionary expenses might include restaurants, theatre, concerts, travel, gifts, and charitable or political contributions.

B. Now You Need Assistance in the Home

The cost of home care, or other care in the community, can escalate to the point where it can wipe out your entire life’s savings.  Fortunately, you can take action to protect yourself.  You can choose to transfer your assets to a family member or a trust, and then access Community Medicaid to pay for your care.  This is often a crucial step to avoid becoming impoverished by the cost of your long-term care.  To learn more about Community Medicaid, click here.

If you apply for Community Medicaid benefits, you will need to re-think how your income is categorized and can be spent.  This is when you will decide whether to join a Pooled Income Trust.

1. If You Choose NOT to Join a Pooled Income Trust

Medicaid considers all your income above a certain limit ($1,836 per month in 2026) to be “surplus income.”  You are permitted to keep ONLY $1,836 each month.  If you do not join a PIT, that is all you will have to cover your monthly expenses. This includes rent, utilities, gas, clothing, food, housekeeping, home maintenance – everything.  Medicaid rules require that you contribute all your “surplus income” toward the cost of your care. 

Very few people can remain in their homes with only $1,836 per month to pay all their expenses.  This is where the Pooled Income Trust comes in.

What is a Pooled Income Trust?

Medicaid permits (and expects) Community Medicaid recipients in New York to join Pooled Income Trusts. PITs manage bank accounts as Trustees for Community Medicaid recipients. They are charitable organizations that support their causes from the money they earn or receive from their Trust services. 

People who join PITs arrange to have each month’s “surplus income” deposited into a Pooled Income Trust account in their name.  The PIT’s role is to monitor, regulate, and pay clients' expenses from their individual accounts. 

2. If You Join a Pooled Income Trust:

Once you have joined a PIT, you need to think differently about how you spend your monthly income.  

- Permitted Disbursements:

• You can spend the income you are allowed to keep in your personal account ($1,836) however you want. 
• The “surplus income” you deposit to your PIT account can only be used to pay expenses that are specifically for you.

1. The money in your Pooled Income Trust account can be used for all necessities, such as those listed above.
2. Your PIT account can also be used to pay for discretionary purchases for you. These could include entertainment, a new television, new appliances, etc.  – again, as long as the expenditure is for your benefit.

- Disbursements Not Considered Valid For a PIT:

You may want to use your money for purposes that do not specifically benefit you. This would include gifts, political or charitable contributions, paying for grandchildren’s educations, or spending money on someone else. Money in your Pooled Income Trust is not permitted to be used for these purposes.  You can only make expenditures like these from the $1,836 per month you keep in your personal account. 

C. What Happens When You Are No Longer Receiving Community Medicaid?

At some point you will pass away or move to a different living situation. At that point you will no longer receive Community Medicaid. Any funds that remain in your Pooled Income Trust account will not revert to you. They will also not be included in your estate.  They remain with the PIT organization, to be used for the PIT's charitable causes.

Flow Chart:

We have created the flow chart infographic below. It shows your different sources of income, and how you might spend it if you do not need long-term care. It then shows how your income is categorized once you are receiving Community Medicaid, and how it is disbursed if you do, or do not, join a Pooled Income Trust. 

The chart can help you picture the different ways your income can be spent, once you are receiving Community Medicaid.  If you click on it, you can also download and print it.

Contact Us to Schedule a Consultation or to Get More Information About Community Medicaid and Pooled Income Trusts!