SSI and Trust Distributions

In Connecticut, a long-term care Medicaid recipient’s assets are limited to $1,600, if you are on Medicaid. 

The asset limit for SSI is $2,000 for a single individual, but because Connecticut’s limit is lower, the SSI beneficiary must stay below $1,600

Any month in which the beneficiary’s assets outside of the trust exceed $1,600 may be a month of ineligibility for Medicaid.

The following things do not count toward this asset limit:

  • your home
  • an auto with equity of no more than $4,500
  • all of your personal belongings
  • pre-paid funeral arrangements
  • a life insurance policy with a face value of no more than $1,500 
  • assets in a special needs trust

BE CAREFUL: Some distributions will reduce SSI benefits!

Here are the 3 basic rules:

1.   Money paid directly to the beneficiary will reduce his or her SSI benefits, dollar for dollar. Do not give more than $20 per month cash to a recipient of SSI, $20 of unearned income a month is exempt. 

2.   Money paid directly to someone else to provide the beneficiary with food or shelter reduces the SSI benefit – but only to a limit. No matter how much money is spent for these items, no more than 1/3  is subtracted from the beneficiary’s SSI check for the month he or she receives the benefit from this payment. This is known as, “in kind support and maintenance” or ISM.

Here is a list of the 10 ISM items:

  • food
  • mortgage
  • real estate taxes
  • rent
  • heating fuel
  • gas
  • electricity
  • water
  • sewer
  • garbage disposal

If you pay for any of these items from the trust directly to the provider, no matter how much, the beneficiary will lose no more than 1/3 of the SSI check. 

For example, if you pay the mortgage of $1,200 a month, the SSI recipient still will lose no more than 1/3 of the monthly SSI check.

 3. Money paid directly to someone else to provide the beneficiary with items other than food and shelter does not reduce SSI. Such items include:

  • Clothing
  • Medical care
  • Telephone bills
  • Cable bills
  • Computer access
  • Lawn maintenance
  • Condo fees
  • Education
  • Entertainment
  • Car insurance
  • Taxes and gasoline
  • Other transportation expenses

 Bills paid by the trustee for these items do not count as income.