On April 23, 2014, the Social Security Administration (SSA) issued Emergency Message 14026 providing instructions for the regional centralization of Supplemental Security Income (SSI) trust reviews to help improve the accuracy and consistency of SSI trust resource determinations. Under the new policy, effective April 28, 2014 a member of the new Regional Trust Reviewer Team must review all resource determinations for trust documents presented for SSI initial claims.

In addition to establishing a new regional trust review procedure, SSA also issued a new Trust Training Fact Guide to assist in understanding how to evaluate a trust document. Under the Fact Guide, common types of trusts include Self-Funded Trusts, or those trusts established by and containing assets owned by the SSI beneficiary, and Third-Party Trusts, or those established by and containing the assets of third parties, such as the parents or relatives of the SSI beneficiary. For the purpose of determining eligibility for SSI benefits, assets in a Self-Funded Trust are countable regardless of (1) the purpose for which the trust was established; (2) whether the trustees have or exercise any discretion under the trust; (3) any restrictions on when or whether distributions may be made from the trust; or (4) any restrictions on the use of distributions from the trust. Similarly, a Third Party Trust is a countable resource if the SSI beneficiary can revoke or terminate the trust, and obtain the assets for him or herself. Under these rules, assets in most Self-Funded Trusts or Third-Party Trusts are countable.

However, the new Fact Guide identifies certain types of Self-Funded Trusts and Third-Party Trusts which are not countable in determining eligibility for SSI benefits. For example, the Guide excludes as a resource a Special Needs Trust (SNT) containing the assets of an SSI beneficiary if the trust document contains ALL of the following criteria: (1) SNT must contain the assets of an SSI recipient who is under age 65; and (2) SSI recipient must be disabled; and (3) SNT must be established for the sole benefit of the SSI recipient; and (4) SNT must be established by the SSI recipient’s parent, grandparent, or legal guardian, or through a court order; and (5) SNT must provide for reimbursement to the State(s), upon the individual’s death, for medical assistance paid on the SSI recipient’s behalf.

A SNT containing the assets of a third party such as a parent or other relative of the SSI beneficiary is a resource for SSI purposes if the SSI recipient has legal authority to revoke or terminate the trust and then use the funds to meet his food or shelter needs, or if the SSI recipient can direct the use of the trust principal for his or her support and maintenance under the terms of the trust. Additionally, if the individual can sell his or her beneficial interest in the trust, that interest is a resource. For example, if the trust provides for payment of $100 per month to the beneficiary for spending money, the SSI recipient may be able to sell the right to future payments for a lump-sum settlement. If the SSI recipient does not have the legal authority to revoke or terminate the trust or to direct the use of the trust assets for his or her own support and maintenance, the trust principal is not the SSI recipient’s resource for SSI purposes.

Emergency Message 14026 is annexed here – Emergency Message 14026

The Guide is annexed here – SSA Trust Training Fact Guide

For additional information concerning special needs trusts and disability planning, visit: