What Can a Medicaid Income Trust Pay For in South Dakota?
South Dakota's rule (ARSD 67:46:05:33.01) requires the trustee, each month, to pay the beneficiary the income paid into the trust, but not more than 300% of the SSI benefit when added to the beneficiary's other income, and to pay the rest to the nursing facility or home and community-based services provider. Before paying the provider, the trustee may use some of the remaining income for direct administration of the trust and for uncovered health items. Every item below is cited to DSS's own published rules; where DSS 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 South Dakota Medicaid Income Trust each month, and the trustee may pay it out only for the purposes DSS allows. Paying for anything else can put eligibility at risk. Here is the list, with the DSS source for each item.
What DSS's rules allow
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Payment to the beneficiary, up to the cap
Each month, the income paid into the trust, but not more than 300% of the maximum SSI benefit when added to the beneficiary's other income.
Source: ARSD 67:46:05:33.01(2)
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The rest to the provider
The income remaining in the trust, paid monthly to the nursing facility or HCBS provider to reduce what the department pays.
Source: ARSD 67:46:05:33.01(3)
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Administration and uncovered health items
Before paying the provider, the trustee may use remaining income for direct administration of the trust and for items necessary for the beneficiary's health that Medicaid or the facility doesn't cover.
Source: ARSD 67:46:05:33.01(3)
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Personal needs in a nursing facility
$100 a month.
Source: ARSD 67:46:06:05
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HOPE waiver needs allowance
300% of the SSI standard for the year.
Source: SD Medicaid HOPE Waiver Billing and Policy Manual
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Health insurance premiums
A deduction for health insurance premiums paid from the recipient's income.
Source: ARSD 67:46:06:06
Trustee and bank fees
South Dakota sets no dollar cap. The trustee may use income remaining in the trust for the direct administration of the trust (ARSD 67:46:05:33.01(3)).
What the trust can't be used for
If income placed in the trust exceeds the amount paid out for medical services, the excess is subject to transfer-of-assets penalties, and the trust may contain only the beneficiary's own income (ARSD 67:46:05:33.01).
Timing, and money left over
Both required payments are monthly (ARSD 67:46:05:33.01).
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 DSS asks.
Related: who can be the trustee in South Dakota, 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.