By Thomas D. Begley, Jr., CELA

(Article originally published in the Barrister)  Section 8 of the Federal Housing Act of 1937 provides a rental assistance program for low-income families and individuals. HUD pays rental subsidies so eligible families can afford decent, safe and sanitary housing. The programs are generally administered by Public Housing Agencies (PHAs). Generally, the family pays 30% of its adjusted monthly income for rent. Household income must be within the applicable limit established by HUD. The limits are based on family size and locality. Family members must be U.S. citizens or eligible aliens. There are income limits. Income includes Social Security and Disability benefits, pensions, annuities, alimony, some welfare payments and regular contributions from others. Lump sum acquisitions such as personal injury settlements, are not counted as income. If the personal injury plaintiff receives a settlement and puts the money under the mattress and spends it over time, the expenditures do not count as income and do not affect Section 8 eligibility.  Historically, distributions from trusts, including Special Needs Trusts, have been counted as income, unless they are used for medical purposes or are irregular and sporadic.

In an important decision for Section 8 Housing Voucher recipients, the United State District Court for the 1st Circuit reversed the District Court decision in an important public housing case.(1) In the lower court case,(2) the District Court held that Kimberly DeCambre was receiving distributions from an irrevocable Special Needs Trust funded with the proceeds of a personal injury settlement and disqualified DeCambre from her housing assistance on the grounds that she was no longer income eligible. The Housing Authority held that because the distributions from the Special Needs Trust should be counted as income, the amount of the subsidy provided under Section 8 should be reduced $0 . Over a three year period, the distributions from the trust exceeded $200.000. The Housing Authority and the District Court held the entire amount of the distributions were income and, therefore, DeCambre lost her eligibility for Section 8 assistance. The court stated that if Kimberly DeCambre had put the money under her mattress and spent it over time, there would have been no affect on her Section 8 eligibility. However, the court held that once the personal injury settlement was deposited into the trust, it somehow changed its charac ter and all distributions from the trust were considered distributions of income. These distributions, when added to DeCambre’s other income, reduced her subsidy to $0.

On appeal, an amicus brief was filed by the Special Needs Alliance, the National Academy of Elder Law Attorneys and the National Housing Law Project in support of DeCambre. The Appellate Court noted that lump sum additions to family assets, such as settlement for person or property losses are specifically excluded under HUD Regulations from annual income. DeCambre argued that because all of the funds in her Special Needs Trust derive from a series of lump sum settlement payments for a personal injury. the Housing Authority was required to exclude all of her distributions from her annual income. The lower court agreed up to this point stating that if DeCambre had simply put the money under her mattress and used it in the same manner that the trust had made distributions, there would be no problem because there is no asset test under Section 8. However, the District Court reasoned that by depositing the lump sum payments into the Special Needs Trust, the character of the distributions changed so that each distribution was 100% countable as income.

On appeal the amicus brief contended that the principal deposited into the Special Needs Trust should considered principal and only the income earned by investing the principal should be considered income. The Court of Appeals held that DeCambre’s Special Needs Trust was funded exclusively with the proceeds from a series of tort settlements. Had these settlement proceeds been paid directly to DeCambre, the parties agreed that they would have been treated as a lump sum addition to family assets and, therefore, would have been categorically excluded from annual income upon receipt under HUD’s Regulations. The parties agreed that income derived from investments should be considered income. The only issue was when the trust distributes to or for the benefit of the tenant, some or all of principal originally paid into the trust, how should that distribution be characterized. The Housing Authority maintains that even if DeCambre’s settlement proceeds bad the character of a lump-sum addition to family assets when they entered the Special Needs Trust, they no longer possess that character once they were disbursed from the Special Needs Trust. The Court of Appeals concluded that distributions of principal from the Special Needs Trust remain principal and only the investment income is considered income. The question not before the court was, what is the implication for Third-Party Special Needs Trusts? Should distributions of principal not be considered income, but be considered simply a distribution of principal as with a First-Party Special Needs Trust? The issue was not argued in DeCambre, but logically it would seem that the same result should obtain.

As a matter of procedure in both First-Party and Third-Party Trusts, the Housing Authority should look at the resident’s prior years’ federal and/or state income tax return.

Whether or not the DeCambre decision will be accepted by other PHAs in other districts remains to be seen. The decision may be of limited effect. Section 8 is being amended to provide an asset test of $100, 000.

• DeCambre v. Brookline Housing Authority, Case 15-1458, Document 00117013731 (June 14, 2016 ).
• Brookline Housing Auth. 95 F. Supp. 3d (D. Mass. 2015).

“We’ve helped bring tens of thousands of veterans off the streets, but we’re not slowing down,” President Barack Obama said while addressing the Disabled American Veterans convention in Atlanta on August 1. “We will not stop until every veteran who fought for America has a home in America.”

The White House attributed the progress in reducing veteran homelessness to the launch of Opening Doors in 2010, the government’s first-ever strategic plan to prevent and end veteran homelessness. Another fruitful initiative has been the partnership between the HUD and Department of Veteran Affairs (VA). HUD provides rental assistance to homeless veterans while the VA offers clinical services and case management through their Supportive Housing program. Since 2010, more than 360,000 veterans and their families have received housing.

First Lady Michelle Obama’s Mayors Challenge to End Veteran Homelessness has also contributed. She launched the nationwide campaign in 2014. Over 880 mayors, governors and other local officials were tasked with committing to the goal of ending veteran homelessness in their communities. White House officials said Houston and New Orleans managed to end chronic veteran homelessness in 2015.

Although the Obama administration originally vowed to end chronic veteran homelessness this year, it decided to extend the deadline to 2017 due to budgetary reasons. Veterans’ advocates are optimistic about the progress so far. However, there is still a long way to go when it comes to ensuring veterans nationwide are kept off the streets with permanent housing.

However, one complication that has arisen is that when husbands have taken out reverse mortgages, upon their death, their wives were unable to pay off the loans, and were faced with foreclosure. As a result, the U.S. Department of Housing and Urban Development (HUD) was the defendant in a class action lawsuit filed by AARP, which alleged that HUD failed to protect the women.

Under the new rules, if one spouse takes out a reverse mortgage, and later dies, the surviving spouse can keep residing in the home without any apprehension about foreclosure provided that she or he pays the tax and insurance, and maintains the home. The new rules also state that a couple can still obtain a reverse mortgage where only one of the spouses is 62 or older. And the younger spouse’s age will determine the amount of the couple’s payout even in the event that that spouse is not on the mortgage title. In this way, the amount of the loan will be smaller.

Reverse mortgages are complex financial products, and if you are considering one, you should consult an attorney or trusted financial adviser.

The elder law attorneys at Hook Law Center assist Virginia families with will preparation, trust & estate administration, guardianships and conservatorships, long-term care planning, special needs planning, veterans benefits, and more. To learn more, visit http://www.hooklawcenter.com/ or call 757-399-7506.

However, one complication that has arisen is that when husbands have taken out reverse mortgages, upon their death, their wives were unable to pay off the loans, and were faced with foreclosure. As a result, the U.S. Department of Housing and Urban Development (HUD) was the defendant in a class action lawsuit filed by AARP, which alleged that HUD failed to protect the women.

Under the new rules, if one spouse takes out a reverse mortgage and later dies, the surviving spouse can keep residing in the home without any apprehension about foreclosure provided that she or he pays the tax and insurance, and maintains the home. The new rules also state that a couple can still obtain a reverse mortgage where only one of the spouses is 62 or older. And the younger spouse’s age will determine the amount of the couple’s payout even in the event that that spouse is not on the mortgage title. In this way, the amount of the loan will be smaller.

Reverse mortgages are complex financial products, and if you are considering one, you should consult an attorney or trusted financial adviser.

The elder law attorneys at Hook Law Center assist Virginia families with will preparation, trust & estate administration, guardianships and conservatorships, long-term care planning, special needs planning, veterans benefits, and more. To learn more, visit http://www.hooklawcenter.com/ or call 757-399-7506.

Every senior should be aware of Michigan’s “Long Term Care Ombudsman” program, which upholds the rights of seniors, whether they are in a nursing home, or an assisted living setting.

Michigan Senior Living

Seniors living in Michigan, and who may be planning to add a dwelling to their existing property to live in—while renting out their home—may already be familiar with accessory dwelling units (ADU). Instead of living in that backyard treehouse, the one you built for the kids umpteen years ago, these so-called ‘carriage flats,’ or mother-in-law apartments, are creating havoc with local zoning laws.

For sure, they’ve been around for decades, and they do represent plausible sources of supplemental income for homeowners, particularly for seniors looking to amp up their income stream.

While Michigan admits it is not in the subsidized housing market, they do recognize that ADUs offer another choice for “housing affordability.”

Home-care aides to earn more in 2015

Of course, in a perfect Senior World, that income just might be there to help defray a couple’s home care costs with the income from renting out their main residence.

No surprise, but home care costs are rising. In fact hourly pay for home care aides were given a bump this year when the government made it mandatory for most direct-care workers to receive the federal minimum wage, including overtime pay.

Homeowners with limited financial resources, and who are willing to do a lot of research, may have the option to pay for home care costs by taking out a reverse mortgage. In fact, the HUD.gov website touts its ‘brand’ of reverse mortgages as a vehicle that allows you to  “Use Your Home to Stay at Home;” it is the only reversed mortgage that is federally insured.

Regardless of the housing choice, a predominant theme for those over the age of 50, is one of growing old in “isolation” from family and community, according to an overview on the AARP site. For sure, either by choice, or because of aging-related diseases like Alzheimer’s, seniors can go through daily depression simply because they think they don’t matter.

Someone does care…

When a spouse decides it’s best for their loved one to move into a long-term care facility, the whole process is beyond overwhelming, particularly if there is no one living close by.

Every senior should be aware of Michigan’s “Long Term Care Ombudsman” program, which upholds the rights of seniors, whether they are in a nursing home, adult foster care home, or even an unlicensed, assisted living setting.

In short, the program exists for family, or relatives, to make sure that complaints/concerns are dealt with. Volunteers help with issues ranging from resident rights, guardianship and nursing home placement.

Financial support for Medicaid spouses.

The biggest fear among seniors is the idea of having to relinquish their home and deplete their life savings in order to receive Medicaid’s financial assistance.

That is simply not the case. In fact Congress has made sure that no one in this situation needs to go bankrupt due to the costs associated with long-term care.

As such, Medicaid law is there to provide a minimal financial footing for spouses of a Medicaid applicant; this, through the “community spouse resource allowance,” or CSRA.

A thirty-day stay is necessary, and on the day of admittance into a nursing home, for example, all of the assets of the couple are calculated. Generally, for 2015, a spouse can keep up to $119,200 in countable assets with a minimum of $23,844. As noted on the Nolo.com website:

“States are required to have spousal protection rules for Medicaid recipients who are in nursing homes, but they are not currently required to have spousal protection rules for other Medicaid recipients, like those receiving in-home care. However, many states do have rules protecting the income and/or assets of spouses of Medicaid recipients getting long-term care outside of nursing homes…”

Contact us to discuss the many options available to you through proper estate planning.

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Last month President Obama announced a proposed $168.8 billion budget for the Department of Veterans Affairs (VA) in 2016, representing a 7.5 percent increase in discretionary spending. Among many other veterans benefits, the additional funding will focus on electronic medical records and other technology improvements, mental health treatments, medical and prosthetic research, long-term care and telehealth. Here are a few highlights of the proposed budget.

Improved Health Care

A large portion of the VA budget, $63.2 billion, will focus on improving the medical care provided to veterans, including $446 million for improved women’s services alone. The main categories that will receive additional funding are mental health, prosthetics, spinal cord injuries, traumatic brain injuries, readjustment counseling and long-term care. The Department of Defense refers to traumatic brain injury as one of the signature injuries of troops wounded in Afghanistan and Iraq. Additionally, a study recently published in JAMA Psychiatry found the rate of mental illness among soldiers to be much higher than civilians. In fact, 25 percent of the 5,500 soldiers surveyed tested positive for at least one mental disorder, and 11 percent of those had more than one mental illness, including post-traumatic stress disorder and military sexual trauma. Clearly, both physical and mental health issues are a priority.

The budget also includes funding through the Veterans Choice Act. This legislation provides funding to hire more staff and physicians to handle the medical needs of veterans. Additionally, it allows for $10 billion in funding that establishes The Veterans Choice Program, an initiative that allows eligible veterans to use health care providers outside the VA system if wait-time or distance prevents them from receiving timely care.

More Access

A huge complaint among veterans is simply getting an answer or finding information about their benefits. The VA is increasing access to health care in numerous ways. $4.1 billion will be solely dedicated to information technology, including improving infrastructure, modernizing electronic health records and providing improved online access to benefit information. $86.6 million is earmarked to improve the online application process and provide more call center agents. Another $1.2 billion will support telehealth funding, a program specifically for veterans in rural or remote locations. Over $1.6 billion will support new construction projects and enhanced health care facilities.

Burial and Memorial Benefits

Sadly, a large part of the VA’s responsibilities include taking care of the memorial and burial services of our veterans. The new budget contains $266.2 million for the National Cemetery Administration (NCA). In addition to maintaining existing military cemeteries, the funding will allow for two new national cemeteries in 2015, in Cape Canaveral and Tallahassee, Florida, and a third in 2016 in Omaha, Nebraska. The NCA maintains 3.6 million gravesites and estimates handling more than 129,000 interments each year.

Preventing Homelessness

Veteran homelessness is a huge priority of this budget. A total of $1.4 billion will support programs to prevent homelessness among the veteran population. This includes supportive services, such as HUD’s housing voucher program, and $201 million in grants will go to community organizations that provide temporary housing for homeless veterans.

The VA is one of the largest health care systems in the U.S., with 9.4 million enrollees. Services include health insurance, life insurance, disability compensation, pensions and survivor benefits to another 5.2 million beneficiaries, education assistance, vocational rehabilitation, mortgage guaranties, burial benefits and numerous other areas of assistance. However, it’s estimated that 25 million veterans actually quality for benefits. That’s a huge gap between those that quality and those that are receiving. Many, especially the elderly, are not aware of the many benefits available, including long-term care, home health care, assisted living and nursing home costs. The Elder Care Firm is accredited by the Department of Veterans Affairs. Let our professionals ensure you are getting the benefits you deserve. Contact us for a consultation.

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