A Medicaid income trust is a nontestamentary trust or a similar legal device established after August 10, 1993, for the sole benefit of the beneficiary. A Medicaid income trust must meet the following requirements:

1. (1) It is composed only of the beneficiary's own pension, social security, or other income;
2. (2) It requires the trustee, without option or discretion, to pay monthly to the beneficiary the amount of income paid into the trust. However, the amount paid to the beneficiary may not exceed 300 percent of the maximum SSI standard benefit amount when added to the beneficiary's other monthly income not paid into the trust;
3. (3) It requires the trustee to pay monthly to the nursing facility, HCBS, or HCBWS provider the amount of income remaining in the trust to reduce the payment amount needed from the department. However, the trustee may encroach upon income remaining in the trust for the direct administration of the trust and for items necessary for the beneficiary's health if such items are not covered by medical assistance or the long-term care facility; and

4. (4) It provides that upon the death of the individual and before any other distribution is made from the trust, the department must receive all amounts remaining in the trust up to an amount equal to the total medical assistance paid on behalf of the beneficiary after September 30, 1993.

   If income placed in the trust exceeds the amount paid out of the trust for medical services, the excess is subject to penalties under the transfer of assets provisions in this chapter.

   Cross-References:

   SSI standard benefit amount, § 67:46:04:13.

   Definition of HCBS, § 67:54:04:01.

   Definition of HCBWS, § 67:44:03:01.

Source: 20 SDR 170, effective April 21, 1994; 30 SDR 193, effective June 13, 2004; 31 SDR 107, effective February 1, 2005.

General Authority: SDCL 28-6-1.

Law Implemented: SDCL 28-6-1.