Legal Authorities Relating to Supplemental Needs Trusts

There is a confusing patchwork of Federal and State laws and regulatory guidance governing the use of Supplemental Needs Trusts in the Medicaid context.  This article is intended to collect some of these authorities in one place.

One of the prerequisites for using a Supplemental Needs Trust is that the beneficiary must be disabled.  These references provide the rules for determining whether an individual is disabled, as well as the process for disability determinations made for purposes of using an SNT.  Many of these references are also applicable to individuals requesting disability determinations for purposes other than an SNT, such as obtaining more favorable budgeting rules in the SSI-related category.

NEW February 2019 - The State Dept. of Health finally released an Informational Notice --OHIP 0119 - called "Explanation of the Effect of Trusts on Medicaid Eligibility."   Development of this notice was required by a  DECEMBER 18, 2017 - state law requiring that applicants and recipients who have a spend-down be notified about the availability of using an SNT to reduce excess income.    Unfortunately, the new Notice falls short in clearly explaining the availability of SNTs to reduce the spenddown.  See this discussion and letter from the NYSBA Elder Law Section to the NYS DOH.. 8/7/2019.

Also, the February 2019 state directive  GIS 19 MA/04 - Clarification of Policy for Treatment of Income Placed in Medicaid Exception Trusts that issued this Information Notice states, "If a trust is established by an agent acting under a Power of Attorney (POA), the powers granted under the POA must include permission to gift assets."   Elder law attorneys have asked the State to revoke this requirement because it violates state law.  See more here.   


Federal Authorities

Although it is the local Department of Social Services (or in other states, the state Medicaid agency) that makes the disability determination for purposes of SNTs, most of the standards used are from Federal law.  The definition of "disability" used by the Federal Social Security Administration for purposes of SSDI and SSI is adopted by the State-run Medicaid program.  Thus, it is useful to make reference to the Federal standards when trying to establish that an individual is eligible to use an SNT for Medicaid purposes.

New York State Authorities - Law, regulations and policy manuals

NYS Agency Directives

How Do I Request that the Local Social Services District Rebudget My Income Once I have Created a Trust?

You must provide a copy of the trust to your local social services district. You must include a written statement indicating the amount of monthly income that will be placed into the trust each month.

The answer may mislead consumers into thinking they only need to send a copy of the trust to the Medicaid office in order to rebudget their case..  It does not mention that a person over age 65 must submit proof that they are disabled, requiring forms described in this article.  Much more must be submitted - see this article.  

DSS-486T (revised 6/2012)(ATTACHMENT I)  or Medical Statement of Disability, which is completed and signed by the treating physician, describing diagnoses, symptoms, functional limitations, and medical history and;    NOTE:  The form revised in June 2012 shortens this form from the former 25-page form two a 2-page form, which will be less intimidating to doctors.   The old form consisted of numerous attachments that elicited information about the different body systems, such as a musculoskeletal or cardiac impairments.  Those former attachments, while burdensome, were helpful to show the criteria for "meeting the listings"-- Step Three in the sequential evaluation process described below.   While no longer required, you might find some of these attachments helpful as a guide for the physician to provide information about particular conditions.  Click here for the old 486T. 

LDSS-1151 (revised 6/2012)(ATTACHMENT II)  Disability Questionnaire – completed by client or her advocate or family member, describing the disabled child’s education, work history, and functional limitations.  

LDSS-1151.1 (6/201)(ATTACHMENT III) Disability Questionnaire Continuation Sheet - provide names, addresses of all medical providers and hospitals where care received in order for State to obtain medical records.

New  Transmittal Sheet (ATTACHMENT IV) to be used by the local DSS when forwarding a disability determination request to the Disability Review Team 

New York City Authorities  (most recent listed at top)

NOTE:   NYLAG Evelyn Frank Legal Resources Program and some elder law attorneys dispute HRA's view that a Statutory Gift Rider is necessary in order to establish a Pooled Income Trust. Contact for more information.    See article by Daniel Fish in the New York Law Journal, "New Restrictive Rule Regarding Medicaid and Power of Attorney," Aug. 15, 2019 (download PDF - Reprinted with permission from the Aug. 15, 2019 edition of the New York Law Journal © 2019 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-257-3382 or 

This article was authored by the Evelyn Frank Legal Resources Program of New York Legal Assistance Group.


Article ID: 128
Last updated: 05 Nov, 2019
Revision: 16
Medicaid -> Supplemental Needs Trusts -> Legal Authorities Relating to Supplemental Needs Trusts