Special Needs Trusts (SNTs) are often set up to protect an injured party’s SSI and Medicaid payments. Settlement assets placed in an SNT are not counted when determining government assistance eligibility.
The eligibility rules are different, however, for HUD Section 8 housing assistance. Unlike SSI and Medicaid criteria, qualifying to receive assistance with rent payments is based on income, not assets.
It’s Tricky. If an injured party receives regular, ongoing distributions from an SNT, the amount is considered income. If the income is too high, the recipient will not qualify for Section 8 rental assistance. Many injured individuals who need SSI and Medicaid also need help with rent. How can they receive SSI, Medicaid and SNT distributions and still qualify for Section 8 housing?
To get around this, courts have ruled that payments that are “temporary, nonrecurring, or sporadic” are not counted as income for Section 8 purposes [24 CFG 5.609(e)(9)]. Creating a payment strategy that follows the court’s guidelines will enable an injured party to continue to receive SSI and Medicaid benefits and SNT distributions for living expenses while still qualifying for Section 8 rental assistance.
To discuss SNTs and government assistance programs, give me a call.
Pat Farber
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