| Special Needs Trusts (SNTs) and SNAP benefits (food stamps)…read on:
READER QUESTION:
Hello, and thank you for the generous info you share via these newsletters. After my 87-year-old Aunt passes, her estate will be placed
in an SNT for me. I am disabled and receive SSI, SNAP, HEAP, and Medicaid. My daughter is blind and developmentally disabled since birth and will be
the beneficiary of the remainder of my SNT after I pass. I know that the funds in the trust are to supplement the Government SSI INCOME, and what items the funds can be spent on is limited because Food Stamps are considered a benefit, trust funds are not to be used for buying food.
But I just read an article regarding SOCIAL SECURITY that described a change in the law that omits food from in-kind support calculations. Before
this change, an SNT paying for food would reduce my SSI and SNAP benefits. Now the law seems to say that food will no longer be counted as income across the board, “no matter the source”.
So my real question is, will funds from an SNT for food/dining be allowed without affecting my SSI and SNAP benefits? Can the trust fund now buy a
hot dog if I take a trip to Disney World? Thank you for sharing your knowledge.
MY RESPONSE:
This is confusing, and there are limitations, but there may also be a workaround. For SSI purposes, payments for food, from an SNT or otherwise, will NOT be considered In-kind Support and Maintenance (ISM). Therefore, it will not reduce your SSI. However, there is a different rule for SNAP (food stamps) benefits. If a Special Needs Trust pays directly for food (i.e., restaurant meals, groceries), then SNAP will count that as income and reduce benefits dollar for dollar.
Yikes. So what is the workaround? Enter the ABLE account. IF the SNT pays money into an ABLE account (limited to $19,000 per year), then the ABLE account money can be used to pay for food without any impact on SNAP benefits. A person with disabilities (whose disability began before the age of 26) can create an ABLE account. Distributions from ABLE accounts that are used for QUALIFIED DISABILITY EXPENSES (QDE ) are simply not counted as income under the SSI and SNAP rules, and food is such a QDE.
So, if your disability began before the age of 26 (it will have for your daughter), create an ABLE account and then fund it each year with up to $19,000 and let the ABLE account pay for the hot dog.
Go to MYNYABLE.ORG.
I hope this helps! |
