Mom's Income Is Too High for Medicaid — Qualified Income Trusts in Florida

In this article

1. Rule out the wrong number first
2. What a Qualified Income Trust actually is
3. Where the money goes once she qualifies
4. The thing a trust will not fix
5. The order to do things in
6. Running the trust month to month
7. When to start

If your mom's income is too high for Florida Medicaid to pay for assisted living, the answer is almost always a Qualified Income Trust, and setting one up comes down to five steps: confirm her gross income really is over the limit, have an elder law attorney draft the trust, open a separate bank account in the trust's name, send the trust to DCF for legal review, and move the income over the limit into that account every single month. It is not a loophole and it is not a reason to give up. Florida built the trust into its own rules for exactly this situation.

Rule out the wrong number first

The most common mistake is checking the wrong figure. Families look at the deposit that lands in the bank and compare it to the limit. DCF does not. Its own Qualified Income Trust information sheet says the test is income before any deductions, such as taxes and Medicare or health insurance premiums.

So start with the award letters, not the bank statement. Add up the gross amount of every check your parent receives: Social Security, a pension, an annuity, a VA payment, rental income. Then compare that total to the current limit in DCF's financial eligibility standards. The limit changes every January, so do not work from a number a friend used last year. Call DCF at (866) 762-2237 and ask for this year's standard for long term care.

If the gross total is under the limit, you do not need a trust, and you can stop reading here. If it is over, even by a few dollars, you do.

What a Qualified Income Trust actually is

A Qualified Income Trust is a written agreement plus a dedicated bank account. Each month, the part of your parent's income that pushes her over the limit goes into that account. Income placed in the trust in the month it arrives is not counted when DCF decides whether she qualifies that month.

The trust exists because federal Medicaid law allows it. Section 1917 of the Social Security Act, found at 42 U.S.C. § 1396p(d)(4)(B), permits a trust made up only of pension, Social Security, and other income, as long as the state receives what is left when the person dies.

DCF requires every Florida trust to do four things:

1. Be irrevocable. Once signed, it cannot be cancelled.
2. Name the state to receive whatever remains at death, up to the amount Medicaid paid.
3. Hold income only. Savings, a house, or a lump sum never go in.
4. Be signed and dated by your parent, a spouse, or someone with legal authority to act for her.

That last point is where many families stall. If your parent can no longer sign and nobody holds a durable power of attorney that covers this, you may need a guardianship before a trust is possible, and that takes time.

Where the money goes once she qualifies

A trust does not shrink the monthly bill. It changes how Medicaid counts the income, not where the income ends up.

DCF adds the income inside the trust and the income outside it together to work out your parent's patient responsibility, which is the share she pays toward her care each month. Most of her income still goes to the cost of care. She keeps a small personal needs allowance for things like haircuts and clothing. The trust pays the patient responsibility, so the account is not meant to grow.

If anything is left in the account when she dies, the trustee pays it to the Agency for Health Care Administration, after checking whether the community owes a refund for the month of death. DCF's information sheet lists the mailing address and the documents to enclose.

Our guide to how spend down works in Florida covers the asset side of the same application, which a trust does not touch.

The thing a trust will not fix

Here is the part that works against us. A Qualified Income Trust makes your parent financially eligible. It does not put her at the front of the line.

Florida Medicaid pays for assisted living through its long term care program, and people are released from that program's wait list by a priority score based on need, not by how long they have waited and not by how good their paperwork is. A family can draft a perfect trust, fund it on time, get a financial approval, and still wait months for a spot, paying privately in the meantime. The Agency for Health Care Administration explains the screening and how the priority score is set.

So do both tracks at once. Start the screening through the Elder Helpline the same week you call an attorney about the trust, and ask any community you are considering how it handles a resident whose Medicaid is still pending. Our post on what to do while Medicaid is pending walks through the private months.

Sugarmill Manor and The Gardens both accept Medicaid, so a parent who qualifies through a trust can use that approval at either one.

The order to do things in

Start the first three in the same week. The screening and the trust run on separate tracks at separate agencies, and families who wait to finish one before starting the other lose time for nothing.

Running the trust month to month

The paperwork happens once. The deposits happen every month for as long as your parent needs Medicaid, and this is where trusts most often fail.

• Deposit in the month the income arrives. DCF does not allow a deposit for a past month or a future one. A check that arrives on the third gets deposited that month, not the next.
• Deposit enough. DCF's own advice is that depositing more than needed is safer than depositing too little. A short deposit counts the same as no deposit.
• Never take money back out for personal use. Anything paid back to your parent from the trust counts as her income again.
• Start before approval. If she needs coverage for a month while the application is still open, the deposit has to be made that month anyway.

Pick one family member as trustee and give that person a calendar reminder for the first week of every month. An automatic monthly transfer from the account where the Social Security check lands, sized with a little room to spare, takes memory out of it.

When to start

Start the day you learn your parent's income is over the limit, not the day she needs to move. An attorney needs time to draft, DCF needs time to review, and the Medicaid screening has its own wait. For the wider picture of paying for care, our post on what to do if you cannot afford assisted living in Florida lays out every other source, and our page on assisted living that accepts Medicaid in Citrus County covers what a Medicaid stay looks like here.

Frequently asked questions

What happens if my mom's income is too high for Florida Medicaid?

She can usually still qualify by setting up a Qualified Income Trust, sometimes called a Miller trust. Each month the income over the limit goes into a separate trust account, and DCF does not count it when deciding whether she is eligible that month.

Do I need a lawyer to set up a Qualified Income Trust in Florida?

DCF says professional help is not required, but an elder law attorney is the safer choice. The trust must pass review by DCF legal offices, and a trust that fails review or a deposit made wrong can cost a full month of coverage. The Florida Bar Lawyer Referral Service is (800) 342-8011.

What happens if we miss a deposit into the Qualified Income Trust?

Your parent is ineligible for Medicaid payment of long term care for that month. DCF does not allow deposits for a past or future month, so the income has to go in during the month it arrives, and depositing a little extra is safer than too little.

Does a Qualified Income Trust lower what my parent pays each month?

No. DCF counts the income inside and outside the trust together to set her patient responsibility, the share she pays toward care. She keeps a small personal needs allowance, and most of her income still goes to the cost of care.

Does a Qualified Income Trust get my parent off the Medicaid wait list faster?

No. The trust settles financial eligibility only. Florida releases people from the long term care wait list by a priority score based on need, so start the screening through the Elder Helpline at (800) 963-5337 the same week you start the trust.

Sources

• Florida Department of Children and Families: Qualified Income Trust information sheet
• 42 U.S.C. § 1396p: trusts composed only of income
• Florida Agency for Health Care Administration: long term care program screening
• Florida Department of Children and Families: ESS program policy manual
• The Florida Bar: Lawyer Referral Service

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Written by

Cameron Hernando Clark

Community Relations Director

Cameron Hernando Clark is the Community Relations Director for The Manors of Citrus. He writes this family guide to help Citrus County families make sense of assisted living and memory care, drawing on the day to day of running two family owned communities on Florida's Nature Coast.