What Can a Qualified Income Trust Pay For in New Jersey?

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

What DMAHS's rules allow

• Personal or maintenance needs allowance

  A personal needs allowance for a nursing-facility resident, or a maintenance needs allowance in assisted living or at home, as set on the PR form. It must be spent each month for the individual's sole benefit or it counts toward the $2,000 resource limit the next month.

  Source: DMAHS QIT FAQs (questions 31 and 35); QIT template

• Bank fee

  Up to $20 a month for the QIT bank account, treated as part of the personal or maintenance needs allowance.

  Source: DMAHS QIT template; QIT FAQs

• Community spouse and dependents

  A sum to the spouse sufficient to provide, but not exceed, the minimum monthly maintenance needs allowance, and, if applicable, an allowance for family dependents.

  Source: DMAHS QIT template; QIT FAQs (question 31)

• Home maintenance

  An allowance for maintaining a home if the individual is returning to it within six months.

  Source: DMAHS QIT FAQs (question 31)

• Health premiums and approved uncovered medical expenses

  Health insurance premiums, and uncovered, state-approved medical expenses for people in assisted living or at home, supported by a physician's prescription and receipts.

  Source: DMAHS QIT FAQs (questions 31 and 33)

• Cost share

  Income left after the allowable deductions, paid by the trustee directly to the nursing facility or assisted living facility, or, for someone living at home, directly to DMAHS.

  Source: DMAHS QIT FAQs (question 31)

The order payments are made in

DMAHS's FAQ says these are deducted in order from the individual's total gross income: personal or maintenance needs allowance, community spouse allowance, other dependents, home maintenance, uncovered medical expenses and health premiums, then the cost share. The template lists the trust's payment priority the same way, with the trustee's fee last.

Trustee and bank fees

After every other payment, including the cost share, the trustee may claim a fee of up to 6% of that month's income paid to the trust; a fee not taken that month can't be taken later (QIT template). Legal and administrative fees are not allowable deductions (QIT FAQs). Bank costs of up to $20 a month are allowed separately.

What the trust can't be used for

The template says no payments may be made from the trust except as it lists, and other payments invalidate the trust. DMAHS's FAQ says only the expenses on the PR form can be withdrawn from the QIT account, and other withdrawals are treated as a transfer of assets; uncovered-medical allowances may not be used to enhance services Medicaid already covers, such as personal care assistance. The trust doesn't pay burial expenses after the beneficiary's death.

Timing, and money left over

Payments are due by the last day of the calendar month in which the trust receives the income (QIT template). Most QIT accounts end each month at or near zero; someone whose income exceeds what the PR form requires leaves the excess in the account, and withdrawing it counts as income (QIT FAQs).

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 DMAHS asks.