We recently secured an important victory for a client whose Medicaid benefits were terminated after a New Jersey Board of Social Services improperly deemed “countable income” on the client as a result of mortgage payments being made out of the client’s Special Needs Trust.
Our client, a disabled individual, relies on Medicaid benefits for essential medical care and support. He is also the beneficiary of a Special Needs Trust, which is a legal tool specifically authorized under federal law to help disabled individuals maintain eligibility for government benefits while still receiving financial support for certain supplemental needs.
Despite the trust being valid and properly administered, the county determined that monthly mortgage payments being made by the trustee to the client’s mortgage lender should count as the client’s “income.” As a result, the county asserted that the client’s income exceeded Medicaid’s monthly income limit.
Donald A. Dennison, Esq. of Mandelbaum Barrett PC’s Elder Law practice group challenged that determination before the Office of Administrative Law, arguing that Congress expressly authorized Special Needs Trusts to protect the assets of disabled individuals without risking the loss of their public benefits. Additionally, New Jersey Medicaid regulations specifically exclude certain repayable loans (such as mortgage payments) from being treated as countable income.
Ultimately, the county board agreed to reverse course and fully reinstate the client’s Medicaid benefits. This outcome reinforces an important principle, namely, that properly established Special Needs Trusts exist to protect the assets of disabled individuals, not to serve as a basis for denying essential public benefits.
If you or a loved one are faced with a Medicaid denial or termination involving a Special Needs Trust, it is important to seek legal guidance. In many cases, strict deadlines apply, including the right to request a Fair Hearing to challenge an adverse action. For questions regarding Special Needs Trusts, Medicaid eligibility, or public benefits planning, contact the Elder Law team at Mandelbaum Barrett PC.
These stories are successful case results from our attorneys. Please note that results may vary depending on your particular facts and legal circumstances.