by Thomas D. Begley, Jr., CELA
Personal Injury attorneys must inquire as to whether their clients are receiving public benefits. Certain benefits are means-tested, so that if the client receives money directly those benefits are reduced or lost completely. This article will outline the common public benefits and indicate whether the receipt of a personal injury settlement will affect those benefits.
Supplemental Security Income
Supplement Security Income (SSI) is a means-tested federal program that provides income (a cash assistance grant) to certain aged (65 or over), blind, and persons with disabilities. The program is administered by the Social Security Administration. It is governed by federal statute,[1] federal regulations,[2] and the Program Operating Manual System of the Social Security Administration (POMS). For 2016, the maximum federal SSI benefit is $733 per month. In addition, the State of New Jersey has a supplement in the amount of $31.25 per month. If an individual has more than $2,000 of assets, he or she will lose SSI. Therefore, the receipt of a personal injury settlement will disqualify the plaintiff from SSI, unless the funds are placed in a Special Needs Trust.
Social Security Disability Income
This program is known as Old Age Survivors and Disability Insurance (OASDI). It is governed by the Social Security Act.[3] Unlike SSI, which is a means-tested welfare program, Social Security Disability Income (SSDI) is an insurance program. Coverage is based on quarters of Social Security insurance coverage during the applicant’s employment. Receipt of a personal injury settlement will not affect the plaintiff’s SSDI.
Medicaid
Medicaid is a medical insurance program that benefits millions of Americans. There are many ways that individuals qualify for Medicaid. The vast majority of Medicaid recipients receive that benefit, because they are also receiving SSI. If they lose their SSI, they also lose their Medicaid. However, since the Affordable Care Act (ACA), millions of Americans now receive Medicaid regardless of whether or not they are disabled and regardless of whether they are receiving SSI.
For SSI-based Medicaid, there is an asset limit of $2,000. For ACA Medicaid, there is no resource limit. Therefore, receipt of a personal injury settlement by an SSI recipient will cause a loss of Medicaid. However, receipt of a personal injury settlement by a Medicaid recipient who obtained Medicaid through the ACA will not affect eligibility, except that the income from the settlement may push the income of the plaintiff above the income limits for eligibility under the ACA. The solution for an individual receiving SSI-linked Medicaid is a Special Needs Trust. However, under the ACA, only individuals with disabilities are qualified for a Special Needs Trust. Individuals receiving Medicaid under the ACA who are not disabled may not utilize a Special Needs Trust.
Medicaid Waiver Programs
Medicaid Waiver Programs are designed to provide Medicaid coverage for long-term care services. These services are typically delivered in the home or assisted living facilities. These services are vital to catastrophically-injured individuals. These programs have an asset maximum of $2,000. Receipt of a personal injury settlement would disqualify the plaintiff from Medicaid Waiver services, unless the funds are placed in a Special Needs Trust.
Medicare
Medicare is a program that pays medical costs of eligible beneficiaries. Unlike Medicaid, which is a welfare program, Medicare is an insurance program. Receipt of a personal injury settlement will not affect Medicare eligibility.
Federally Assisted Housing
The federal government has two housing programs that provide assistance for low-income individuals and people with disabilities. These are known as Section 2.02 and Section 8. Section 8 is the program that has the most effect on personal injury plaintiffs. The Department of Housing and Urban Development (HUD) pays rental subsidies so eligible families can afford decent, safe and sanitary housing. Each section of the country has a maximum income limit for eligibility for public housing. If a tenant is eligible, they pay 30% of their net income for rent. While there is no asset test for federally assisted housing, if the assets produce income, the income may render the plaintiff ineligible or cause an increase in monthly rental. Income for the entire household is considered.
Payments from a Special Needs Trust are not counted as income, so long as the payments are irregular and sporadic.
Supplemental Nutritional Assistance Program
The Supplemental Nutritional Assistance Program (SNAP) is now the name for a program that used to be called Food Stamps. Recipients are provided an electronic benefit transfer (EBT) card that looks much like a credit card. SNAP eligibility is determined on the basis of household eligibility.
In New Jersey SNAP has complex resource and income limits. Therefore, receipt of a personal injury settlement could disqualify the individual from these benefits, unless the personal injury proceeds are placed in the Special Needs Trust.
Division of Developmental Disability
Many Division of Developmental Disability (DDD) programs are now based on Medicaid eligibility. The asset limit is $2,000. If the plaintiff is receiving or would otherwise be eligible to receive those benefits, then receipt of a personal injury settlement would disqualify them unless it has been placed into a Special Needs Trust. Other DDD benefits would be unaffected by receipt of a personal injury recovery.
Group Home
In New Jersey most group homes are paid with Medicaid dollars. The asset limit is $2,000. Therefore, receipt of a personal injury settlement would disqualify the individual from those benefits, unless it is placed in a Special Needs Trust.
Psychiatric Institutions
Many psychiatric institutions are paid for by Medicaid dollars under Medicaid Waiver Programs. Again, the asset limit is $2,000, so receipt of a personal injury settlement would disqualify the plaintiff unless the funds are placed in a Special Needs Trust.
[1] 42 U.S.C. §1381 et seq.
[2] 20 C.F.R. §416.
[3] 42 U.S.C. §401 et seq. The Regulations are found at 20 C.F.R. §404.1 et seq.
The post PUBLIC BENEFITS CONSIDERATIONS IN PERSONAL INJURY CASES first appeared on SEONewsWire.net.]]>The Social Security Administration should have reason to celebrate. After all, August 14, 2014, marked the 79th anniversary of the day when President Franklin Roosevelt signed the Social Security Act, which ushered in the landmark entitlement program. However, the agency’s birthday was a less than cheerful one, coming on the heels an audit that criticized the SSA for deciding to cut staffing and reduce its service hours as well as the news that its new multimillion-dollar computer system may very well have turned out to be an expensive failure.
According to the audit that was produced by the SSA’s own inspector general’s office, “overall service has suffered” because of the agency’s decision in 2011 to trim its staff by nearly 11,000 employees and reduce its weekly field office hours from 35 to 27. The audit found that the end result of the agency’s cutbacks was felt as soon as fiscal year 2013, when “the public waited longer for a decision on their disability claim, to talk to a representative on the National 800-Number, and to schedule an appointment” at a field office. (1)
The process of applying for Social Security disability benefits is already an exercise that can take a significant amount of time and become rather complex. The inspector general’s findings are not welcome news for disabled Americans who need a speedy resolution of their claims. In addition to the critical assessment from the inspector general’s office, an internal report recently concluded that the SSA’s new $300 million computer system that was designed to handle its disability claims does not work. The agency laid the groundwork for the new system six years ago, when its aging computers were being swamped by disability claims, but the report found that delays and mismanagement have plagued the new system. And SSA officials have not been able to provide an answer for when the new system will be up and running. (2)
The Social Security Administration may have thought that its new computer system could make up for its decision to cut back service, but that assumption would have been dependent on the system actually working. Instead, already long wait times for the processing of disability claims will get even longer. Also, SSA has attempted to thwart phone applications by not advertising such are available and at times tell claimant’s the only two avenues to apply are on the computer or a personal appearance at the local SSA office. It is clear the phone application is the easiest for the public, but the “consumer” being right has fallen on deaf ears in most SSA offices.
www.FloridaSocialSecurity.com
David W. Magann, P.A.
813-657-9175
Sources: (1) The Washington Post 2014, (2) The Associated Press 2014
The post SSA is Heading For Delays Again After Recent Cutbacks & Years of Improvement first appeared on SEONewsWire.net.]]>Planning
Special needs planning involves much more than trusts. Trusts are simply documents. The real value that an elder and disability law attorney and other members of the disability team bring to the table is the ability to assist in lifetime financial and personal care planning for the person with disabilities. The lawyer must understand the clients, their disabilities, their limitations, their strengths, their hopes, and their dreams. Planning involves an understanding of public benefits laws, tax laws, and the laws pertaining to special needs trusts.
In planning for special needs the following concerns must be addressed:
Disability
What is a disability? The Social Security definition of disability is set forth in the Social Security Act, which reads:
“Disability means the inability to do any substantial gainful activity by reason of any medically-determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve months. The impairment must be so severe that the individual is unable to do his or her previous work or any other ‘substantial gainful activity’ which exists in the national economy. The person’s ‘residual functional capacity’ and age, education and work experience will be considered in determining whether the person is able to do other work.”[2]
Substantial gainful activity (SGA) for a person with a disability is the ability to earn $1,040 per month in the workplace effective January 2013. For a blind person, SGA is $1,740. This is indexed for inflation.[3] SGA is now determined by the ratio of the national average wage index for the previous two years, comparing that amount to the current SGA level and taking the greater of the two. Section 7501 of the Deficit Reduction Act (DRA)[4] requires the Social Security Administration (SSA), before payments begin, to review eligibility decisions for people age 18 or older made by the state disability determination agencies in order to ensure that the individuals are, in fact, eligible for SSI benefits. Known as “pre-effectuation reviews,” these reviews are already conducted for people in the Old Age, Survivors, and Disability Insurance Program (OASDI) and for SSI beneficiaries who also receive OASDI benefits.[5]
The Hartford Study
The Hartford issued a study revealing some interesting facts about the lack of preparation on the part of parents of children with disabilities.[6] The study showed that parents of America’s 2.6 million children with special needs have not planned for the future of their children after the parents are gone. Highlights of the study included the following:
[1] 42 U.S.C. §12101(a).
[2] 42 U.S.C. §1382c(a)(3)(A); 20 C.F.R. §416.905.
[3] 77 Fed. Reg. 65,754 (October 30, 2012) Formula published in 65 Fed. Reg. 82,905 (Dec. 29, 2000).
[4] 42 U.S.C. §1383b; Section 7501 of Pub. L. No. 109-171 (2005).
[5] Disability Policy Memorandum, The ARC and United Cerebral Palsy, Deficit Reduction Act of 2005, Pub. L. No. 109-171 (Mar. 23, 2006).
[6] Most Parents of Children With Special Needs Lack a Plan to Cover a Lifetime of Care, The Hartford, April 2009.