1025.015.01 Cash Remaining From an Assistance Check or Other Budgeted Monthly Income

1025. Qualified Income Trusts

IM-16 March 10, 2021; IM-14 February 19, 2020; IM-42 March 18, 2019; IM-02 January 17, 2019

A Qualified Income Trust (QIT) can be used by participants who are eligible for a QIT program on all factors except income. Under 42 USC 1396p(d)(4)(B), the state of Missouri will exclude earned or unearned income of a participant, when it is deposited into an eligible QIT and any income derived from these deposits in determining the income and assets of a participant. This exclusion applies only to the participant in the QIT program. The QIT programs are:

  •  the Home and Community Based waiver services (HCB) program for persons aged 63 and over
  •  MO HealthNet for Children with Developmental Disabilities (MOCDD) for children under age 18

A QIT can be created by the participant’s attorney or can be created using a notarized template, such as the one created by Division of Legal Services QIT template Qualified Income Trust (MO 886-4657). The QIT is a legal document that must follow the guideline established under 42 USC 1396p(d)(4)(B) and stated within the QIT itself regarding creation of the trust by the participant, or someone authorized to act on his/her behalf, and administration of the trust by the trustee.

The terms of the QIT do not require a trustee who is bonded, but instead allows opportunity for the participant to select a trustee based on who he/she feels most confident will protect his/her assets, and a trustee who will follow the guidelines for how funds may be administered.  The QIT terms allow the expense of the bonding fee to be paid from assets held within the QIT if the participant wishes to ensure the trustee is bonded.  Whether or not the trustee is bonded, apply the policy listed below when funds from a QIT have been misused or mishandled by the trustee or the participant.

NOTE: All trust documents, regardless of type of trust, are to be sent as an attachment with a Request for Interpretation of Policy (IM-14) form through the proper supervisory channels for Income Maintenance programs. Program and Policy staff will review to determine availability of the resources held in the trust to the applicant or participant.


Deposits and Distributions from the QIT

The participant must deposit at least the amount of income that his/her total income exceeds the QIT program standard. Additional income may be deposited, but once deposited in the QIT account, funds can only be used for the purposes as stated in the trust. A valid QIT only allows distributions for medical expenses for the participant, his/her spouse, or his/her minor or disabled child.

NOTE: The program income maximums are adjusted annually. Refer to Appendix E – HCB Income Maximums and Appendix J – Eligibility Standards for Non-MAGI Programs for the current income maximums.

EXAMPLE: Mr. Carl applied for and was eligible for HCB on all other factors except income. His Social Security income exceeds the current HCB limit. To qualify for HCB Mr. Carl created a QIT; he must deposit his income above the current HCB limit into his QIT account each month. He decided to deposit $10 more than the minimum required amount each month. Once the money is deposited, Mr. Carl’s trustee can only allow distributions from the QIT for eligible medical expenses, including the $10 exceeding the minimum.

All distributions made from the QIT must follow the guidelines in the trust (i.e. for eligible medical expenses). The trustee must keep an accounting of all deposits and disbursements and provide the report with each annual review and upon request by FSD staff.

The participant will have no access to the Trust Account. The Trustee is restricted to only making disbursements for non-covered medically related expenses incurred by the participant, or incurred by the participant’s minor or disabled child, or incurred by the participant’s spouse if living in the same home as the participant, otherwise disbursements can only be made for fees associated with the costs of operation, any maintenance fees for the Trustee, any Attorney Fees, or Bonding fees.

If funds are inappropriately disbursed, the trustee/participant MUST replace the funds and provide proof within 10 days. If they are not replaced, QIT funds used inappropriately can result in:

  • ineligibility due to excess income: total income being counted as unable to exclude the income deposited into the QIT
  • ineligibility due to excess resources: counting the full balance of the trust account as an available resource

EXAMPLE: Ms. Linda’s QIT account showed that every month $15 is paid from her QIT account to Netflix. This is an improper distribution. Ms. Linda is given 10 days to provide proof that the money was restored to her QIT account and to stop the recurring payment. Ms. Linda is advised that her trustee should not be allowing distributions that are not medical expenses for Ms. Linda, her spouse, or her minor/disabled child. FSD recommends the replacement of the trustee. If the funds are not restored, all income Ms. Linda receives must be counted as monthly income and the account can no longer be excluded as it is not being correctly used as a QIT account.

  •  transfer penalties: the funds used inappropriately may be considered as an improper transfer of assets

EXAMPLE: Mr. Robert had $200 that was distributed to Amazon from his QIT account. During the review, staff contacted Mr. Robert and he stated that he bought his granddaughter a new phone. This was an improper distribution. Mr. Robert is given 10 days to provide proof that the money was restored to the QIT account. If $200 is it is not restored to the QIT account, it is a $200 transfer as it was money that was spent for someone outside the eligibility unit and must be entered as a penalty.

  • referral for investigation: intentional program violations investigated by the Welfare Investigation Unit (WIU)

EXAMPLE: Ms. Rhonda’s QIT account shows that every 3 months, the balance of the account is cashed out. During her review, staff contacts Ms. Rhonda to discuss and she states that her trustee cashes the account out and gives her the money. Ms. Rhonda then puts the money in her checking account and uses it for any expenses she has.

Ms. Rhonda is given 10 days to provide proof that the money was restored to her QIT account. Ms. Rhonda is advised that her trustee should not be allowing distributions that are not medical expenses for Ms. Rhonda, her spouse, or her minor/disabled child. FSD recommends the replacement of the trustee.

If the funds are not restored to the QIT accounts, all income Ms. Linda receives monthly will be counted as income to her, and the account can no longer be excluded as a resource since it is not being correctly used as a QIT account. Any funds that were spent on someone outside of the eligibility unit must be reviewed for a transfer of property. Ms. Rhonda’s information should also be sent to WIU for investigation as she appears to be intentionally misusing the QIT trust to qualify for HCB.

Staff should contact the participant to clarify questionable distributions and request verification if necessary.

If a participant is a beneficiary of a QIT with improper distributions; and he/she provides proof that the improper distributions have been stopped, the participant can be returned to the QIT program. If the participant designates a new trustee to stop improper distributions, the participant can be returned to the QIT program.


Changes when Eligibility for a QIT Program Ends

If the participant is no longer eligible for a QIT program, due to entering a nursing home or similar facility, or when a participant is no longer eligible for MOCDD due to age, the total gross income must be counted and the QIT trust becomes an available resource when determining eligibility for other programs.

Contributions to the QIT account are only excluded for the QIT programs, and would not be excluded for any other assistance programs or other MO HealthNet categories, such as Vendor Care. If the QIT participant enters a nursing home, or similar institution, and becomes eligible for MO HealthNet Vendor Coverage, the income deposited into the trust account is no longer excluded and will be considered in determining the participant’s surplus under 42 USC 1396p(d)(4)(B)(iii).

The QIT account balance is only an excluded resource for the QIT program and becomes an available resource to the participant once he/she is no longer eligible for a QIT program.

NOTE: Income that is deposited into a qualifying income trust may be reallocated to a community spouse pursuant only to a hearing under 42 USC 1396r-5(e)(2).