What Can a Qualifying Income Trust Pay For in Kentucky?
Kentucky's regulation (907 KAR 20:030) says a qualifying income trust must state that its funds are used only for valid medical expenses, including patient liability, or the community spouse income allowance, with payments made every month or by the end of the following month. DCBS's operations manual describes a broader set of disbursements, and DMS must approve any others in advance. Every item below is cited to DMS's own published rules; where DMS 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 a Kentucky Qualified Income Trust each month, and DMS's policy names the purposes it may be paid out for. Here is what that policy says, item by item.
What DMS's rules allow
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Valid medical expenses, including patient liability
One of the two uses the regulation says the trust must name.
Source: 907 KAR 20:030, Section 3(5)(d)
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Community spouse income allowance
The other use the regulation names, set under 907 KAR 20:035.
Source: 907 KAR 20:030, Section 3(5)(d)
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Personal needs allowance
DCBS's manual lists the personal needs allowance among disbursements from the trust; the regulation sets it at $60 a month for a nursing-facility resident.
Source: DCBS Operations Manual Vol. IVA, MS 3505; 907 KAR 20:035
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Spouse or family support
Listed in DCBS's manual among disbursements from the trust.
Source: DCBS Operations Manual Vol. IVA, MS 3505
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Other health insurance
Listed in DCBS's manual among disbursements from the trust.
Source: DCBS Operations Manual Vol. IVA, MS 3505
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Administrative fees
Listed in DCBS's manual among disbursements from the trust, without a cap or definition.
Source: DCBS Operations Manual Vol. IVA, MS 3505
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Other expenses, with DMS approval first
DMS must approve all other expenditures, such as eyeglasses, dentures, hearing aids or attendant care not covered by Medicaid or other insurance.
Source: DCBS Operations Manual Vol. IVA, MS 3505
The order payments are made in
For a married nursing-facility resident, 907 KAR 20:035 sets the order of post-eligibility deductions: personal needs allowance, community spouse income allowance, family allowance, then incurred medical or remedial care.
Trustee and bank fees
Kentucky's regulation says nothing about fees. DCBS's manual lists "Administrative Fees" among disbursements, without a cap or definition (MS 3505).
What the trust can't be used for
Kentucky's regulation and its operations manual differ: the regulation names only valid medical expenses (including patient liability) and the community spouse income allowance, while the manual adds the personal needs allowance, family support, other health insurance and administrative fees. All expenditures from the trust require the department to verify they are allowable (907 KAR 20:030), and Form MAP-007 says DMS must review payments other than patient liability, valid medical expenses and the community spouse allowance before they are made.
Timing, and money left over
Payments are made every month, or by the end of the month after the month the funds went into the trust (907 KAR 20:030, Section 3(5)(f)).
Related: who can be the trustee in Kentucky, 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.