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Miller Trust Guide
OR · Guide

What Can an Income Cap Trust Pay For in Oregon?

Oregon's rule (OAR 461-145-0540(9)(c)) sets the order: all income in the Income Cap Trust is distributed monthly, starting with work-related deductions and the personal needs allowance, then capped administration costs, spouse and family allowances, insurance premiums and medical costs, support payments, burial and home-maintenance reserves, and finally patient liability. Excess amounts are treated as the individual's income under the transfer-of-assets rules. Every item below is cited to ODHS APD's own published rules; where ODHS APD 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 Oregon Income Cap Trust each month, and the trustee may pay it out only for the purposes ODHS APD allows. Paying for anything else can put eligibility at risk. Here is the list, with the ODHS APD source for each item.

What ODHS APD's rules allow

  • Earned income and self-support deductions

    An earned income deduction of $65 from earned income, and deductions under an approved plan for self-support.

    Source: OAR 461-145-0540(9)(c)(A)-(B)

  • Personal needs allowance and room and board

    The personal needs allowance and any applicable room and board standard; the nursing-facility allowance is $81.28 a month for most residents.

    Source: OAR 461-145-0540(9)(c)(C); OAR 461-155-0250

  • Administration costs

    Reasonable administrative costs up to $50 a month in total, including trustee fees, a reserve for bank charges, accounting and tax preparation, future legal expenses and income taxes on trust income, and conservatorship or guardianship fees.

    Source: OAR 461-145-0540(9)(c)(D)

  • Spouse and family

    The community spouse and family monthly maintenance needs allowance.

    Source: OAR 461-145-0540(9)(c)(E)

  • Health insurance premiums

    Medicare and other private medical insurance premiums.

    Source: OAR 461-145-0540(9)(c)(F)

  • Other medical costs

    Other incurred medical costs allowed under Oregon's rules.

    Source: OAR 461-145-0540(9)(c)(G)

  • Support, alimony and taxes

    Reserves or payments for child support, alimony, and income taxes.

    Source: OAR 461-145-0540(9)(c)(H)

  • Burial plan

    Monthly contributions toward an irrevocable burial plan worth up to $5,000.

    Source: OAR 461-145-0540(9)(c)(I)

  • Home maintenance

    Reserves or payments for home maintenance, if the individual meets Oregon's criteria.

    Source: OAR 461-145-0540(9)(c)(J)

  • Patient liability

    Patient liability, not more than the cost of home and community-based care or nursing facility services.

    Source: OAR 461-145-0540(9)(c)(K)

The order payments are made in

The rule lists the distributions (A) through (K) and requires them in that order each month (OAR 461-145-0540(9)(c)).

Trustee and bank fees

Trustee fees count toward a $50 monthly cap on all reasonable administrative costs of the trust, which also covers reserves for bank charges, accounting and tax preparation, future legal expenses, income taxes on trust income, and conservatorship or guardianship fees (OAR 461-145-0540(9)(c)(D)).

What the trust can't be used for

Amounts beyond the listed distributions are treated as income to the individual under Oregon's transfer-of-assets rules, and the trust may contain only the individual's current and accumulated income (OAR 461-145-0540).

Timing, and money left over

Income is distributed monthly. The rule allows reserves for administration, burial and home maintenance, and requires the accumulated amount at death to be paid to the state, up to the medical assistance provided.

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 ODHS APD asks.

Related: who can be the trustee in Oregon, 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.

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Common questions

What can an Oregon Income Cap Trust pay for?
Oregon's rule (OAR 461-145-0540(9)(c)) sets the order: all income in the Income Cap Trust is distributed monthly, starting with work-related deductions and the personal needs allowance, then capped administration costs, spouse and family allowances, insurance premiums and medical costs, support payments, burial and home-maintenance reserves, and finally patient liability. Excess amounts are treated as the individual's income under the transfer-of-assets rules. The items ODHS APD's rules name: Earned income and self-support deductions; Personal needs allowance and room and board; Administration costs; Spouse and family; Health insurance premiums; Other medical costs; Support, alimony and taxes; Burial plan; Home maintenance; Patient liability.
Can the trustee be paid from an Oregon Income Cap Trust?
Trustee fees count toward a $50 monthly cap on all reasonable administrative costs of the trust, which also covers reserves for bank charges, accounting and tax preparation, future legal expenses, income taxes on trust income, and conservatorship or guardianship fees (OAR 461-145-0540(9)(c)(D)).
What are the timing rules for money in an Oregon Income Cap Trust?
Income is distributed monthly. The rule allows reserves for administration, burial and home maintenance, and requires the accumulated amount at death to be paid to the state, up to the medical assistance provided.