Supplemental Needs Trusts (SNTs) are legal tools used to help disabled people keep more of their income or assets without losing their public benefits. See fact sheet in SPANISH.
SNTs were originally invented to allow parents of children with developmental disabilities to provide for them after they grow up without making them ineligible for public benefits (like SSI and Medicaid). Ordinarily, if a parent set up a trust fund for their disabled child with $100,000 in it (for example), this would make them ineligible for public health insurance such as Medicaid. To avoid this, lawyers created special trust funds, which are structured in such a way that they do not impair a person’s eligibility for public benefits. They supplement the disabled beneficiary’s benefits, rather than replace them; hence the name Supplemental Needs Trust.
Another way that SNTs are used is to shield excess income for Medicaid purposes. By using an SNT in this way, a disabled Medicaid recipient can actually keep the benefit of almost all of their income, rather than having to pay a portion of it towards the cost of their care (e.g., for home care services). Income placed in an SNT can also qualify someone for a Medicare Savings Program. See Fair Hearing No. 4399513P (Nassau Co., Jan. 31, 2006)(available in WNYLC Online Resource Center, Fair Hearing Database, free registration required)
An SNT can also be used where a disabled person under age 65 receives a lump sum (such as a retroactive Social Security award or personal injury settlement). Ordinarily, this asset would make the individual ineligible for Medicaid, SSI, and other benefits. By transferring it to an SNT, the person can remain eligible for all their benefits, and use the money in the SNT to supplement their regular income for years to come.
This website contains many resources about SNTs. Here’s a roadmap:
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This article was authored by the Evelyn Frank Legal Resources Program of New York Legal Assistance Group.
