How Pooled Special Needs Trusts Affect SSI Benefits

Un tribunal federal de distrito dictaminó recientemente en el caso Williams contra Colvin (N.D. Ill., nº 12C7852, 31 de marzo de 2014) que los pagos de una anualidad a un fideicomiso mancomunado para necesidades especiales no se consideran ingresos a la hora de determinar las prestaciones de la Seguridad de Ingreso Suplementario (SSI). Sin embargo, en el mismo caso, el tribunal también dictaminó que los pagos del fideicomiso mancomunado al tutor del beneficiario para alimentos y vivienda son ingresos contables a efectos del SSI.

SSI is a means-based Federal income supplement program designed to help aged, blind, and disabled people, who have little or no income. It provides cash to meet basic needs for food, clothing, and shelter. Furthermore, it is administered by the Social Security Administration (SSA).

In this case, Dietrich Williams, who was left permanently disabled from an accident, began receiving payments from two structured settlement annuities following personal injury litigation. In 1999, a court order was granted approving the transfer of the annuities. Additionally, the payments they generate were transferred into the Illinois Disability Pooled Trust.

The court also approved a budget for Mr. Williams that provided that the trust distribute $525 per month to his guardian for groceries, household supplies and drinking water. Another $300 per quarter was provided for clothes.

Then in 2008, Mr. Williams applied for SSI, but his application was denied because the SSA determined that the payments to his guardian from the trust were countable income. Mr. Williams’ appealed the denial and SSA ultimately found that he was ineligible for benefits because the payments from the annuities to the pooled trust were income.

After losing the appeal Mr. Williams then brought the case before the U.S. District Court for the Northern District of Illinois.

The federal district court reversed the SSA’s decision treating the annuity payments into the pooled trust as income. However, the court also determined that a guardian or conservator is considered an agent for SSI purposes. As a result, payments to the guardian, as agent for the ward, constitute payments to the ward, rather than as reimbursement to a third-party.

This meant that the monthly payments from the IL Trust for groceries, and the quarterly payments for clothing, to the guardian on behalf of Mr. Williams should be counted as unearned income for the purposes of determining SSI benefits.

This case is significant for any individual who is the recipient of a structured settlement annuity and wishes to obtain SSI benefits, and highlights the benefit of a pooled income trust while warning against potential pitfalls of having payments made directly to the guardian.

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Disclaimer: The information provided above is for general informational purposes only and is not legal advice.