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Miller Trust Guide
AR · Guide

What Can an Income Trust Pay For in Arkansas?

All of the applicant's countable income goes into the trust every month, and the trustee may pay out only the amounts the caseworker lists on the Post-Eligibility Income Worksheet (DCO-712), each paid directly to its recipient: the personal needs allowance, allowances for a spouse or dependents, uncovered medical costs, and the share of cost to the facility. Bank service charges are allowed; trustee fees are not, unless the trustee is a commercial institution. Every item below is cited to Arkansas DHS's own published rules; where Arkansas DHS says nothing about an item, this page says so instead of filling the gap. This guide is informational only and is not legal or financial advice.

Income goes into an Arkansas Income Trust each month, and the trustee may pay it out only for the purposes Arkansas DHS allows. Paying for anything else can put eligibility at risk. Here is the list, with the Arkansas DHS source for each item.

What Arkansas DHS's rules allow

  • Bank service charges and trust income taxes

    The trust form provides for paying monthly bank service charges and income taxes owed by the trust before the rest is applied under DHS rules.

    Source: DHS form DCO-9938

  • Personal needs allowance

    $40 a month for most facility residents; $30 if SSI is the only income; $90 for certain veterans with a reduced VA pension.

    Source: DHS Medical Services Policy Manual H-410

  • Community spouse allowance

    Deducted only to the extent the institutionalized spouse actually contributes it.

    Source: DHS Medical Services Policy Manual H-410

  • Family member and dependent children allowances

    Allowances for dependent family members, computed under the manual's formula.

    Source: DHS Medical Services Policy Manual H-410

  • Non-covered medical expenses

    Medicare and other health insurance premiums, deductibles or coinsurance, and necessary medical or remedial care not covered by Medicaid.

    Source: DHS Medical Services Policy Manual H-410

  • Share of cost to the facility

    Payments are made each month only in the amounts on the DCO-712, directly to each recipient, including the patient's share of cost to the facility.

    Source: DHS Medical Services Policy Manual H-111

  • Assisted living waiver room and board

    Assisted Living Facility waiver recipients keep a flat 90.8% (rounded up) of the SSI/SPA amount for room and board.

    Source: DHS Medical Services Policy Manual H-412

The order payments are made in

For a nursing-facility resident, Arkansas's budget runs: income trust fees, personal needs allowance, community spouse allowance, family member allowance, allowance for dependent children, then non-covered medical expenses (Medical Services Policy Manual H-410). Assisted-living waiver budgets follow their own order, starting with room and board (H-412). ARChoices and DDS waiver recipients don't contribute to the cost of their care (H-410).

Trustee and bank fees

Arkansas allows the bank's service charges for maintaining the account. Trustee fees are not allowed, except commercially reasonable administrative fees charged by a commercial institution serving as trustee; fees for income tax preparation and attorneys are not allowed either (Medical Services Policy Manual H-111; Income Trust Fact Sheet PUB-396).

What the trust can't be used for

While the beneficiary receives Medicaid in a facility, no payments other than those on the DCO-712 may be made, and payments not for the beneficiary, the spouse or dependents are treated as a transfer of resources that can bring a penalty. Fees, taxes or other payments need advance notice to the caseworker, no later than the month before they're made (H-111). Only income may be in the account; income and resources can't be mixed (PUB-396).

Timing, and money left over

All countable income goes into the trust each month, and all approved expenses are paid out each month (PUB-396). If Medicare or another payer lowers the share of cost in a month, that money stays in the trust and may be used only for the beneficiary's uncovered medical care (H-114). If the month-end balance grows past the state's transfer-of-resources divisor, facility payment stops until the balance is spent down (H-113).

Keeping the monthly record

The trustee is the one who has to show that the trust paid only these items. A month-by-month record of every deposit and every payment, checked against the bank statement, is what makes that easy to show when Arkansas DHS asks.

Related: who can be the trustee in Arkansas, what happens to the money at death, and the Miller Trust trustee guide for how the monthly cycle works in every state.

Trust not open yet? The account comes first

None of these payments can start until the trust account exists, and most branches have never opened one. Free one-pager: the questions to ask before you drive to a branch, emailed now. Then 4 more short emails over the next 10 days — then we stop.

Email only — we never ask for income, age, or family details, and never sell your address.

Common questions

What can an Arkansas Income Trust pay for?
All of the applicant's countable income goes into the trust every month, and the trustee may pay out only the amounts the caseworker lists on the Post-Eligibility Income Worksheet (DCO-712), each paid directly to its recipient: the personal needs allowance, allowances for a spouse or dependents, uncovered medical costs, and the share of cost to the facility. Bank service charges are allowed; trustee fees are not, unless the trustee is a commercial institution. The items Arkansas DHS's rules name: Bank service charges and trust income taxes; Personal needs allowance; Community spouse allowance; Family member and dependent children allowances; Non-covered medical expenses; Share of cost to the facility; Assisted living waiver room and board.
Can the trustee be paid from an Arkansas Income Trust?
Arkansas allows the bank's service charges for maintaining the account. Trustee fees are not allowed, except commercially reasonable administrative fees charged by a commercial institution serving as trustee; fees for income tax preparation and attorneys are not allowed either (Medical Services Policy Manual H-111; Income Trust Fact Sheet PUB-396).
What are the timing rules for money in an Arkansas Income Trust?
All countable income goes into the trust each month, and all approved expenses are paid out each month (PUB-396). If Medicare or another payer lowers the share of cost in a month, that money stays in the trust and may be used only for the beneficiary's uncovered medical care (H-114). If the month-end balance grows past the state's transfer-of-resources divisor, facility payment stops until the balance is spent down (H-113).