F. Policy
– Home ownership/purchase of a home by a trust
1. Home
as a Resource
If the trustee of a trust which is not
a resource for SSI purposes purchases and holds title to a house as a home for
the beneficiary, the house would not be a resource to the
beneficiary. It would also not be a
resource if the beneficiary moved from the house. The trust holds legal title to the house,
therefore, the eligible individual would be considered to be living in his or
her own home based on having an “equitable ownership under a trust.”
2. Rent-free
shelter
An eligible individual does not
receive in-kind support and maintenance (ISM) in the form of rent-free shelter
while living in a home in which he or she has an ownership interest. Accordingly, an individual with “equitable
home ownership under a trust” (see SI 01120.200F.1.) does
not receive rent-free shelter. Also,
because we consider such an individual to have an ownership interest, payment
of rent by the beneficiary to the trust has no effect on the SSI payment. (Emphasis supplied.)
In the past, the
Oklahoma Medicaid program required the Trustee to charge rent to the Medicaid
beneficiary in order to avoid the potential loss of Medicaid benefits due to
the “receipt” of [phantom] income in the form of free rent. The “phantom” income would be equal to the
fair market rental rate of the dwelling.
However, this rule has been recently changed to follow the same rule as
the POMS. Thus, a Trustee will no longer
be forced to charge rent to a disabled beneficiary living in a dwelling held by
a trust that was established for the beneficiary. However, payments by the trust of certain
household expenses, will still be deemed “income” to the Medicaid and/or
SSI recipient. Examples of such
“household costs” include mortgage payments, real property taxes, and
utilities. However, the Oklahoma
Medicaid program does not consider phone, cable TV, internet access,
satellite TV, etc., as utilities, and payment of those expenses by a
trust for the benefit of a beneficiary will not be treated as “income” to the
beneficiary.
SI 1120.20F.3.C.
of the POMS states:
If the trust pays for other shelter or
household operating expenses, these payments would be income in the form of ISM
(“In-Kind Support and Maintenance”) in the month the individual has use of the
item (see SI 00835.350). Countable shelter expenses
are listed at SI 00835.465D (and include such expenses as mortgage payments, real property taxes, and
utilities). [emphasis added]
If the trust pays for improvements or
renovations to the home [owned by the trust], e.g., renovations to the
bathroom to make it handicapped accessible or installation of a wheelchair ramp
or assistance devises, etc., the individual does not receive income. Disbursements from the trust for improvements
increase the value of the resource and, unlike household operating expenses, do
not provide ISM. (See SI 01120.200E.1.c.)
[emphasis added]
In addition to
the list of “household costs” recited in the POMS section cited above [SI 00835.465D],
there is also this:
NOTE:
Condominium fees in themselves are not household costs. However, condominium fees may include charges
which are household costs (e.g., garbage removal). To the extent that such charges are
identifiable, use them in the computation of inside and outside ISM.
However, if the
house is not owned by a trust for the benefit of the Medicaid beneficiary but
instead by a third party (e.g., parent, sibling, or non-related party) payment
of rent by the trustee will be deemed income to the SSI/Medicaid recipient and
will likely affect and may cause a loss of those benefits. Each case must be evaluated carefully so that
interference with receipt of public benefits does not occur.
Curtis J. Shacklett
Barber & Bartz
525 S. Main Street, Suite 800
Tulsa, Oklahoma 74103-4511
Telephone: (918) 599-7755
Facsimile: (918) 599-7756
E-mail: cshacklett@barberbartz.com 
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