In the Matter of William Jennings, as Administrator of the Estate of Mattie Lou Hammond, Deceased, Respondent, v Commissioner, N.Y.S. Department of Social Services, et al., Respondents. Commissioner, New York State Department of Health, Nonparty Appellant.
Supreme Court, Appellate Division, Second Department, New York
January 5, 2010
893 NYS2d 103
[893 NYS2d 103]
In the Matter of William Jennings, as Administrator of the Estate of Mattie Lou Hammond, Deceased, Respondent, v Commissioner, N.Y.S. Department of Social Services, et al., Respondents. Commissioner, New York State Department of Health, Nonparty Appellant.
Second Department, January 5, 2010
APPEARANCES OF COUNSEL
Beth Polner Abrahams, Garden City, for respondent.
OPINION OF THE COURT
Balkin, J.
In New York, the concept of a supplemental needs trust originated in 1978,1 establishing a vehicle for parents and guardians
The issues of first impression at the appellate level are whether the transfer of a settlor/parent‘s recurring income into a supplemental needs trust created for his or her disabled child must be counted toward (a) the settlor/parent‘s net available monthly income for calculation of the amount of the Medicaid benefits to which the settlor/parent is entitled after he or she is determined to be eligible for Medicaid (hereinafter post-eligibility benefits) and (b) the obligation of the estate of a deceased settlor/parent for the reimbursement of a certain portion of those benefits. We hold that, in the instant matter, there was a rational basis to include this income in the calculations.
I
The following facts essentially are undisputed. On September 15, 2004 the petitioner‘s decedent, Mattie Lou Hammond (hereinafter Hammond), who was then 85 years old, established an irrevocable supplemental needs (hereinafter SNT) trust for the benefit of her 52-year-old son, Frediland Hammond (hereinafter Frediland), who is disabled due to mental retardation and developmental disabilities. Frediland is a recipient of Social Security disability insurance (hereinafter SSDI) (see
The SNT agreement, which initially funded the trust with the sum of $250, provided that “any person may, at any time, by Court order, assignment, gift, transfer, deed, or will, provide income or add to the principal of the Trust.” The SNT agreement also authorized the trustee to use the income for Frediland‘s necessary medical care, equipment, and supplies that were not paid for by private insurance or Medicaid. Finally, in accordance with statutory requirements, the SNT agreement provided for the termination of the SNT upon Frediland‘s death, with the trustee using any remaining principal and accumulated interest to reimburse or “pay back” the New York State Department of Social Services (hereinafter NYS DSS), the nonparty appellant, Commissioner, New York State Department of Health (hereinafter the DOH), or any other appropriate “Medicaid entity,” for the medical assistance provided to Frediland during his lifetime, before distributing any remaining trust assets to his estate. Coincident with the execution of the SNT agreement, on September 15, 2004 Hammond moved into a residential health care facility or nursing home in Hempstead, New York. On January 14, 2005 Hammond applied to the Nassau County Department of Social Services (hereinafter the NCDSS) for medical assistance benefits under the Medicaid program, to cover the costs of her own nursing home and medical care, retroactive to October 6, 2004. In her application, Hammond indicated that she had a total gross income in the sum of $1,780.84 per month, consisting of her Social Security retirement benefits in the monthly sum of $1,173, and a monthly pension benefit in the sum of $607.84; she informed the NCDSS, however, that she had been depositing all of her income into the SNT for Frediland‘s benefit.
On January 27, 2005 the NCDSS issued a notice of intent to establish liability toward chronic care, which informed Hammond that she was eligible to receive Medicaid benefits. This determination of entitlement to post-eligibility benefits by the NCDSS is part of a process known as “chronic care budgeting” (
Hammond challenged the determination of the NCDSS, and asked for an administrative fair hearing in connection with the challenge. On May 26, 2006 an administrative fair hearing was conducted by the New York State Office of Temporary and Disability Assistance, which is part of the DOH, the agency responsible for the administration and interpretation of Medicaid laws in New York (see Kuppersmith v Dowling, 93 NY2d 90, 97 [1999]). Although Hammond did not testify at the hearing, Jennings testified and introduced evidence of the existence and nature of the SNT agreement, Hammond‘s application to the NCDSS, and the expenses actually paid from the SNT on Frediland‘s behalf. According to Hammond, her NAMI should have been “zero” because she deposited all of her monthly income into Frediland‘s SNT, relying on the rulings of Matter of Kaiser v Commissioner of N.Y.S. Dept. of Health (13 Misc 3d 1211[A], 2006 NY Slip Op 51786[U] [2006]) and Matter of Correri v Commissioner of N.Y. State Dept. of Health (Sup Ct, Nassau County, May 19, 2005, index No. 17372/04). The NCDSS disagreed, holding that, while the income placed in the SNT would not render Hammond ineligible for Medicaid, that income was countable for post-eligibility purposes in order to calculate Hammond‘s required contribution toward her own cost of care.
Following the administrative fair hearing, the Commissioner of the DOH (hereinafter the Commissioner) confirmed the NCDSS‘s determination in a decision dated June 7, 2006, relying upon past guidance letters and interpretative regulations contained in the State Medicaid Manual (hereinafter the SMM) issued by the United States Department of Health and Human Services’ Centers for Medicare and Medicaid Services (hereinafter the CMS). The Commissioner reasoned, in part:
“[Ms. Hammond] submitted documentation into
thehearing record that [her] income is being deposited monthly into the supplemental needs trust. Such income deposited into the trust is exempt from any of the transfer provisions for purposes of Medical Assistance. However, in order to be exempt as income, the income must be diverted to a trust for [her] benefit. By letter dated September 23, 1997, the Department of Health clarified Administrative Directive 96 ADM 8, and provided that neither the Administrative Directive nor the Regulations allow for the diversion of income to a trust for the benefit of any other individual.”
On September 27, 2006 Hammond commenced the instant
In a judgment entered January 12, 2007 (2007 NY Slip Op 34450[U]), the Supreme Court granted the petition and annulled
Hammond died in January 2009 approximately two months after the appeal was argued before this Court. Jennings was subsequently issued limited letters of administration on June 24, 2009, appointing him as administrator of Hammond‘s estate. Jennings thereafter was substituted for Hammond as the petitioner-respondent on this appeal. We now reverse the judgment of the Supreme Court.
II
The primary purpose of the Medicaid program is to enable each state, jointly with the federal government, to furnish “medical assistance on behalf of families with dependent children and of aged, blind, or disabled individuals, whose income and resources are insufficient to meet the costs of necessary medical services” (
Throughout the years, nonqualifying individuals have attempted to shelter their assets and income to establish their eligibility for Medicaid benefits (see Matter of Abraham XX., 11 NY3d at 434; Rosenberg, Supplemental Needs Trusts for People with Disabilities: The Development of a Private Trust in the Public Interest, 10 BU Pub Int LJ 91, 127 [2000]), prompting Congress to enact the Omnibus Budget Reconciliation Act of 1993 (hereinafter OBRA), restricting individuals’ manipulation of their assets to obtain Medicaid benefits (see
The Medicaid statutes, however, provide an exemption to this rule, whereby an individual may transfer his or her own income and assets to fund an SNT without having the funds counted as available resources for Medicaid eligibility purposes (see
More specifically, and consistent with the federal regulations, the Legislature codified the definition of an SNT in 1993, pursuant to
Once Medicaid eligibility is established after disregarding the recipient‘s funds earmarked for deposit in the SNT, Medicaid requires the computation of the recipient‘s NAMI available for his or her expected contribution towards his or her own monthly post-eligibility costs of care (see Sai Kwan Wong v Doar, 571 F3d 247, 258 [2009];
Since “[a]s a condition of the receipt of Federal program funding, State Medicaid plans must conform with the statutory standards established by Federal law and the regulations promulgated by the Secretary of Health and Human Services (
“For a person in permanent absence status in a medical facility, after [medical assistance or Medicaid] eligibility is established the person is subject to chronic care budgeting. Under chronic care budgeting, all income must be applied toward the cost of care in the facility, including income disregarded or considered unavailable for the purpose of determining [medical assistance] eligibility. However, before any income is required to be applied to the person‘s cost of care, [certain] deductions will be made” (emphasis supplied).
The SMM, at section 3259.7 (B) (1) and (C) (5) (b), expressly confirms that all income received by an applicant and “placed in a trust is . . . subject to the post-eligibility rules” of inclusion in the recipient‘s NAMI.
In recently reviewing these provisions with respect to a first-party SNT, the United States Court of Appeals for the Second Circuit (hereinafter the Second Circuit) granted great deference to the DOH‘s interpretation of Medicaid regulations requiring SSDI benefits deposited into an SNT to be part of the settlor‘s NAMI for the purpose of calculating his or her own post-eligibility Medicaid benefits, explaining that
“we discern no inconsistency in a statute that provides that an individual may create a Special Needs Trust with SSDI income, but leaves it to the agency to determine how to treat the income contained in such a trust—whether from SSDI or any other source—for purposes of Medicaid eligibility and post-eligibility determinations” (Sai Kwan Wong v Doar, 571 F3d at 258; see Reames v Oklahoma ex rel. Oklahoma Health Care Auth., 411 F3d at 1173).
III
On the instant appeal, Jennings contends that the transfer of Hammond‘s recurring Social Security retirement and pension income into the third-party SNT created for Frediland‘s benefit must be excluded from her NAMI for the purpose of calculating her own contribution towards her Medicaid post-eligibility benefits. Jennings argues this despite the fact that Hammond did not create her own first-party SNT to potentially shield
Preliminarily, it should be noted that the primary issue presented on this appeal is not whether Hammond could create the SNT for Frediland‘s benefit, or whether her income, when deposited in his SNT, affected Frediland‘s own eligibility or post-eligibility status should he apply for Medicaid in the future. Neither party to this appeal has challenged the appropriateness of the SNT as it concerns Frediland, and we express no opinion regarding this issue. Nor are we faced with the task of examining a first-party SNT funded by Hammond for herself. Rather, the primary issue presented is whether the DOH, in applying the Medicaid regulations, properly interpreted them and had a rational basis to conclude that the recurring income Hammond deposited into Frediland‘s SNT was a resource countable towards her own post-eligibility benefits.
In interpreting the Medicaid statutory framework with respect to this issue, we must be cognizant of the appropriate standard of review in light of the procedural posture of this matter as a
“Under most circumstances, judicial review of an administrative determination made after a hearing required by law, and at which evidence was taken, is limited to whether that determination is supported by substantial evidence (see
CPLR 7803 [4] ; 300 Gramatan Ave. Assoc. v State Div. of Human Rights, 45 NY2d 176, 179 [1978]; Matter of 105 Northgate Coop. v Donaldson, 54 AD3d 414, 416 [2008]; Matter of New Venture Gear Inc. v New York State Div. of Human Rights, 41 AD3d 1265, 1266 [2007]). However, such an administrative determination is arbitrary and capricious when it exceeds the agency‘s statutory ‘authority or [is made] in violation of the Constitution or laws of this State’ (Matter of Pasieka v New York City Tr. Auth., 31 AD3d 769, 770 [2006]; see Matter of New York City Dept. of Envtl. Protection v New York City Civ. Serv. Commn., 78 NY2d 318, 324 [1991]; Matter of New York State Tenants & Neighbors Coalition, Inc. v Nassau County Rent Guidelines Bd., 53 AD3d 550, 552 [2008])” (Matter of Lipani v New York State Div. of Human Rights, 56 AD3d 560, 560-561 [2008]).
In a proceeding such as this, which challenges a determination made by an administrative agency as to the proper interpretation of statutes and regulations, the court‘s function is to ascertain, upon the proof before the agency, whether its determination had a rational basis in the record or, conversely, was arbitrary and capricious or affected by an error of law (see Matter of County of Monroe v Kaladjian, 83 NY2d 185, 189 [1994]; Matter of Heintz v Brown, 80 NY2d 998, 1001 [1992]; Matter of Sunrise Manor Ctr. for Nursing & Rehabilitation v Novello, 19 AD3d 426, 427 [2005]; Matter of University Hgts. Nursing Home v Chassin, 245 AD2d 776, 777 [1997]; Matter of Boyland v Perales, 205 AD2d 759, 763 [1994]). An agency action is deemed to be arbitrary if it is taken “without [a] sound basis in reason and . . . without regard to the facts” (Matter of Pell v Board of Educ. of Union Free School Dist. No. 1 of Towns of Scarsdale & Mamaroneck, Westchester County, 34 NY2d 222, 231 [1974]; see Matter of Senior Care Servs., Inc. v New York State Dept. of Health, 46 AD3d 962, 965 [2007]). The “DOH‘s determination need only be supported by a ‘rational basis’ if it is to be upheld (Matter of County of Monroe v Kaladjian, 83 NY2d at 189, quoting Matter of Heintz v Brown, 80 NY2d at 1001; see Matter of Monroe Community Hosp. v Commissioner of Health of State of N.Y., 289 AD2d 951, 952-953 [2001]).
An administrative agency‘s “rulings, interpretations and opinions” of the statute it is charged with enforcing or implementing are entitled to great weight, to the extent that the interpretation relies on the special competence which the agency is presumed to have developed in its statutory administration (Skidmore v Swift & Co., 323 US 134, 140 [1944]; see Matter of Rosen v Public Empl. Relations Bd., 72 NY2d 42, 47 [1988]; Matter of Bates v Toia, 45 NY2d 460, 464 [1978]; Kurcsics v Merchants Mut. Ins. Co., 49 NY2d 451, 459 [1980]). Of special relevance here, “even relatively informal” CMS [State Medicaid Manual] interpretations warrant “respectful consideration due to the complexity of the (Medicaid) statute and the considerable expertise of the administering agency” (Morenz v Wilson-Coker, 415 F3d 230, 235 [2005], quoting Community Health Ctr. v Wilson-Coker, 311 F3d 132, 138 [2002]).
Applying these principles to the matter at bar, we find that the Supreme Court erred in concluding that the DOH‘s inter-pretation
Aside from the question of her eligibility, however, the Medicaid statutes required Hammond to contribute a portion of her NAMI towards her own post-eligibility nursing home and medical care expenses. In that regard, the statute provides that income placed in a trust, and disregarded for eligibility purposes, shall be counted “[f]or purposes of determining an individual‘s . . . amount of . . . benefits” (
Such a conclusion is further supported by the Second Circuit‘s recent decision in Sai Kwan Wong v Doar (571 F3d at 258), in which a permanently disabled Medicaid recipient, Wong, residing in a nursing home, was the beneficiary of an SNT funded with his own SSDI income. In ruling in favor of the DOH,
Clearly, given the statutory framework and the enforcing agency‘s regulations, Hammond‘s Social Security and pension income, which funded Frediland‘s SNT, could not be excluded from her NAMI. The exemption created by
In addition, the exemption created by
An additional basis for upholding the DOH‘s determination, contrary to the conclusion of the trial court and that of our dissenting colleague, lies in the deference accorded to the DOH and its interpretation of the Medicaid statutes, as set forth in the SMM (see Sai Kwan Wong v Doar, 571 F3d at 260; Morenz v Wilson-Coker, 415 F3d at 235; Reames v Oklahoma ex rel. Oklahoma Health Care Auth., 411 F3d at 1164; Matter of Senior Care Servs., Inc. v New York State Dept. of Health, 46 AD3d at 965). Specifically, “the [DOH] commissioner‘s interpretation of a regulation is ‘controlling and will not be disturbed in the absence of weighty reasons’ ” (Matter of Elcor Health Servs. v Novello, 100 NY2d 273, 280 [2003], quoting Matter of Cortlandt Nursing Care Ctr. v Whalen, 46 NY2d 979, 980 [1979]; see Matter of Sigety v Ingraham, 29 NY2d 110, 114 [1971]), given the “large complex regulatory scheme” of the Medicaid statutes and the considerable expertise of the administering agency (Sai Kwan Wong v Doar, 571 F3d at 260; see Morenz v Wilson-Coker, 415 F3d at 235). Here, Jennings has failed to set forth any “weighty reason” to disregard the DOH‘s statutory interpretation of the Medicaid statutes, which the DOH is specifically charged with enforcing and administering.
Finally, although the dissent‘s analysis leads it to conclude that the DOH‘s interpretation was irrational, the Court of Appeals has previously held that the fact “that the [DOH]‘s interpretation might not be the most natural reading of the regulation, or that the regulation could be interpreted in another way, does not make the interpretation irrational” (Matter of Elcor Health Servs. v Novello, 100 NY2d at 280).
For all of the foregoing reasons, we find nothing irrational, arbitrary and capricious, or legally erroneous with respect to the DOH‘s interpretation and treatment of income for post-eligibility purposes and, as a result, the determination of the DOH should not have been annulled.
IV
In accordance with the foregoing, the Supreme Court should have confirmed the determination, denied the petition and dismissed the proceeding in its entirety. Consequently, the judgment is reversed, on the law, the determination is confirmed, the petition is denied, and the proceeding is dismissed on the merits.
Leventhal, J. (dissenting). I respectfully dissent. I do not concur with the majority‘s conclusion that there was a rational basis for the determination of the New York State Department of Health (hereinafter the DOH) that the transfer of the settlor/parent‘s recurring income into a supplemental needs trust (hereinafter SNT), created for his or her disabled adult child, must be counted toward his or her net available monthly income (hereinafter NAMI) for calculation of his or her own Medicaid post-eligibility benefits. For the reasons stated below, I believe that
This Court should affirm the judgment entered January 12, 2007 for several reasons. First, this Court is not bound by the federal statutory and regulatory authorities that address this issue since federal law does not preempt New York law in this area. Second, in deciding this case on state statutory and regulatory grounds, both the
It is undisputed that, on September 15, 2004, the petitioner‘s decedent, Mattie Lou Hammond, established a third-party, irrevocable SNT for the benefit of her then 52-year-old son, Frediland Hammond. The trust agreement creating the SNT (hereinafter the SNT agreement) included the required “payback” provision, which provided that the trust would terminate upon Frediland‘s death, with any remaining principal and accumulated interest to be used to reimburse the appropriate Medicaid entity in New York for the medical assistance provided to Frediland during his lifetime, prior to distributing any remaining trust assets to his estate. I agree with the majority that Hammond created a valid SNT for her disabled son, but disagree with their determination that, under the circumstances of this case, she could no longer fund that trust during her lifetime without severely reducing the amount of her Medicaid benefits.
Background
Medicaid is a jointly funded federal and state medical assistance program that was established by title XIX of the Social Security Act (
In 1993 Congress amended the federal component of the Medicaid statutes when it passed the Omnibus Budget Reconciliation Act of 1993 (hereinafter OBRA) (Pub L 103-66, 107 US Stat 312 [103d Cong, 1st Sess, Aug. 10, 1993]). The amendments inserted
“containing the assets of an individual under the age of 65 who is disabled . . . and which is established for the benefit of such individual by a parent, grandparent . . . if the State will receive all amounts remaining in the trust upon the death of such indi-
vidual up to an
amount equal to the total medical assistance paid on behalf of the individual under a State plan under this title” ( 42 USC § 1396p [d] [4] [A] ; see Keith v Rizzuto, 212 F3d 1190, 1193 [2000], cert denied 531 US 960 [2000]).
The Medicaid statutes generally require Medicaid recipients who receive nursing home care to significantly defray the costs of such care (see
Thus, although Congress expressly stated that the trust corpus and income inclusion rule did “not apply” to SNTs established for the sole benefit of disabled children and grandchildren, the CMS apparently interpreted this language “as a delegation of authority . . . to determine what eligibility and post-eligibility rules shall apply to those trusts” (Sai Kwan Wong v Doar, 571 F3d at 252). The CMS inferred from the pro-
hibitive language that Congress inserted into
The majority concludes that both the federal and state statutory frameworks expressly require that Hammond‘s transfer of income into the third-party SNT, created for the benefit of her adult disabled son, was required to be included in the calculation of her own Medicaid post-eligibility benefits during her lifetime. However, the record before this Court demonstrates that SMM § 3259.7 is the only Medicaid regulation or guideline that requires income placed in a third-party SNT to be included in an applicant‘s post-eligibility benefit contribution. Moreover, contrary to the majority‘s assertion,
Congress may only preempt state law in two permissible ways. Congress may either expressly or impliedly preempt state regulations.
A. Express Preemption
Where “‘Congress legislate[s] in a field which the States have traditionally occupied . . . [w]e start with the assumption that the historic police powers of the States were not to be superseded by the [federal legislation] unless that was the clear and manifest purpose of Congress’ ” (Medical Socy. of State of N.Y. v Cuomo, 976 F2d 812, 816 [1992], quoting Rice v Santa Fe Elevator Corp., 331 US 218, 230 [1947] [holding that federal law did not preempt a provision of the Public Health Law, which limited the amount that physicians could charge their patients under the Medicare Act]). The United States Supreme Court “requires ‘compelling evidence of an intention to preempt’ in traditionally state-regulated fields” (Medical Socy. of State of N.Y. v Cuomo, 976 F2d at 816, quoting General Motors Corp. v Abrams, 897 F2d 34, 41-42 [1990]). It is well settled that the disposition of trusts and estates falls within such a field (see
The language of
If Congress does not use explicit preemptive language in its statutory scheme, implied preemption may exist in the form of either field preemption or conflict preemption. Field preemption occurs when a federal regulatory regime is “so pervasive as to make reasonable the inference that Congress left no room for the states to supplement it” (Gade v National Solid Wastes Management Assn., 505 US 88, 98 [1992]). Conflict preemption, on the other hand, renders “compliance with both Federal and state regulations . . . a physical impossibility,” or exists where “state law ‘stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress’ ” (id., quoting Hines v Davidowitz, 312 US 52, 67 [emphasis added]). As discussed below,
1. Field Preemption
In order for field preemption to exist, federal regulation must be “so pervasive” that Congress could not have intended for the states to “supplement it.” The Medicaid program is a hallmark of ” ‘cooperative federalism’ ” and “administered jointly by state and federal governments” (Rebaldo v Cuomo, 749 F2d 133, 139 [1984], cert denied 472 US 1008 [1985], quoting Massachusetts Gen. Hosp. v Sargent, 397 F Supp 1056, 1061 [1975] [holding that ERISA did not preempt the Public Health Law, which limits the rates that hospitals may charge to employee benefit plans]). Paraphrasing the United States Supreme Court, the United States Court of Appeals for the Second Circuit accurately described Medicaid as a ” ‘cooperative endeavor,’ a ‘cooperative program of shared financial responsibility’ between the states and the federal government” (Rebaldo v Cuomo, 749 F2d at 139, quoting Harris v McRae, 448 US 297, 308-309 [1980]). Hence, the very nature of the Medicaid program nullifies any claim that New York law is field preempted by
There is no conflict between
Similarly, the Legislature designed
Furthermore, SMM § 3259.7 cannot preempt New York law where
As the above discussion makes evident,
The majority properly notes that the “construction given statutes and regulations by the agency responsible for their administration, if not irrational or unreasonable, should be upheld” (Matter of Howard v Wyman, 28 NY2d 434, 438 [1971]; see Matter of Gaffney v Village of Mamaroneck, 21 AD3d 1031 [2005]). “Where, however, the question is one of pure statutory reading and analysis, dependent only on accurate apprehension of legislative intent, there is little basis to rely on any special competence or expertise of the administrative agency” (Kurcsics v Merchants Mut. Ins. Co., 49 NY2d 451, 459 [1980]; see Matter of Gaffney v Village of Mamaroneck, 21 AD3d 1031 [2005]). “In such a case, courts are ‘free to ascertain the proper interpretation from the statutory language and legislative intent’ ” (Seittelman v Sabol, 91 NY2d 618, 625 [1998], quoting Matter of Gruber [New York City Dept. of Personnel—Sweeney], 89 NY2d 225, 231-232 [1996]). The DOH construes the statute and regulations as permitting Hammond to create a valid SNT for Frediland, but then comes to the illogical and irrational conclusion that she should not have been able to fund that trust without severe adverse consequences to herself.
Here, it should be noted, there is “no significant legislative history regarding
The Social Services Law and DOH Regulations Provide No Guidance on Third-Party Special Needs Trust Exemptions
The Social Services Law and DOH regulations do not address whether the income and corpus deposited into a third-party SNT can be used to cover the settlor‘s “cost of care.”
The DOH‘s construction is unpersuasive because the exceptions listed in
EPTL 7-1.12
The Legislature imbued
SNTs serve a dual, but equally important purpose. First, SNTs cover the cost of quality-of-life expenses for disabled beneficiaries without diminishing the amount they receive in government assistance (see
In light of the subject SNT‘s compliance with
The majority concludes that the manner in which Hammond funded Frediland‘s SNT provides two grounds for rejecting the contentions made by Jennings. It posits that: (1) Social Security retirement benefits are unassignable and, therefore, Hammond could not deposit them into Frediland‘s SNT; and (2) those benefits were “meant to help Hammond with her immediate needs [during her lifetime] and not to be preserved as future financial security for a third-party.” On the contrary, Hammond did not assign her Social Security retirement income to Frediland‘s SNT. She merely received the income and placed it into the SNT. Further, the majority fails to distinguish between Social Security retirement benefits and Supplemental Security Income (hereinafter SSI). Hammond received Social Security retirement benefits, not SSI. The majority relies upon Singer v Secretary of Health & Human Servs. (566 F Supp 204, 208 [1983]) for the proposition that Hammond received Social Security retirement benefits “to provide a means of assuring future financial security [for herself,] but only to provide income when it is actually needed.” However, Singer only pertains to SSI, a program whose participants must demonstrate actual need in order to receive benefits, while Hammond received Social Security retirement income, a program whose purpose is to “provide
The DOH contends that exempting the subject third-party SNT would open the door to unintended consequences. It argues that such a result would “enhanc[e] the ability of Medicaid applicants to simultaneously shelter their wealth and receive government medical benefits.” On the contrary, these exemptions would only apply in a narrow set of circumstances. First, both
In sum, the DOH‘s determination at issue is irrational, as it permits Hammond to create a valid SNT for her disabled son, but frustrates the funding of that trust, thus effectively rendering it a nullity. Accordingly, the judgment entered January 12, 2007 should be affirmed, since the DOH‘s determination did not
Prudenti, P.J., and Fisher, J., concur with Balkin, J.; Leventhal, J., dissents in a separate opinion.
Ordered that the judgment is reversed, on the law, without costs or disbursements, the determination is confirmed, the petition is denied, and the proceeding is dismissed on the merits.