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In certain situations, beneficiaries of programs like Supplemental Security Income (SSI) and Medicaid may be at risk of losing their benefits. For example, if they come into an inheritance or receive money in their own name from an accident settlement, their income and assets may exceed the thresholds set by these government programs.

SSI and/or Medicaid recipients in this situation may utilize a pooled income and asset trust to avoid becoming ineligible for these public benefits.

What Is SSI? What Is Medicaid?

Supplemental Security Income (SSI) is a federal program that provides funds to people living with disabilities and limited means. These funds are intended to help individuals pay for basic needs.

In most cases, individuals who qualify for SSI are automatically eligible for Medicaid, another federal benefits program that provides health coverage to low-income individuals.

SSI and Medicaid Asset Limits

SSI and Medicaid are both “means-tested” benefits programs. This means an applicant or beneficiary must not exceed certain income and asset or resource limits to qualify for these benefits. Typically these individuals include those over 65, those eligible for SSI, institutionalized persons, disabled persons, and the blind. A pooled trust can help a person stay within these limits and continue receiving benefits.

Note that while eligibility for SSI and Medicaid often go hand in hand, Medicaid is a state-by-state administered benefit. As a result, some states have different income or resource limits for Medicaid benefits than SSI.

In New York, for example, as of 2025, individual Medicaid recipients may have up to $32,396 in resources and $1,800 per month in income. A couple in New York may have up to $43,781 in resources and $2,433 in monthly income.

However, these expanded limits do not apply to SSI. To receive SSI in New York, an individual may not have more in countable resources than $2,000 or income that exceeds $967 per month. A couple may have at most $3,000 in countable resources and $1,450 per month in income.

What happens if you come into money that pushes you over one of these limits and you still wish to qualify for the affected benefit? The answer may be to consider a pooled trust.

Pooled Trusts May Be a Solution

Whether a beneficiary is coming into an inheritance, receiving money from an accident settlement, or has merely accumulated too much money in their bank account, a pooled trust may allow them to transfer these funds into a trust where funds are managed for their benefit.

This is more desirable than having to turn over the funds or spend down these funds before qualifying for benefits.

What Is a Pooled Trust?

A pooled trust, also referred to as a (d)(4)(C) trust, is a type of special needs trust established and managed by various nonprofit organizations. Individual beneficiaries create accounts within the larger trust. An individual’s funds in a pooled trust are invested with all the other funds. In other words, the assets of many people with special needs are pooled together.

Because a pooled trust accepts contributions from many beneficiaries, the trust can make more stable investments and provide additional management services that a plain vanilla special needs trust might not be able to afford. However, each beneficiary’s account remains their own.

Depending on the pooled trust, a beneficiary might work with a social worker or trust advisor to tailor a funds distribution plan that fits their lifestyle. As with an individual special needs trust, funds in a pooled trust are used to supplement a beneficiary’s government benefits. The funds can be used to pay for expenses within certain permitted criteria. Often, these are expenses that supplement or improve the beneficiary’s quality of life.

Beneficiaries of SSI and/or Medicaid looking to spend down their assets to qualify for or remain on government benefits can transfer funds directly into a pooled trust account, often on their own and without having to rely on a family member’s help.

First-Party Special Needs Trust

Another potential option is a first-party special needs or supplemental needs trust (SNT). This type of trust also called a (d)(4)(A) trust, may be available to SSI or Medicaid recipients who:

• Have come into money or assets
• Meet the Social Security Administration (SSA)’s definition of disabled
• Are under 65

Due to the passage of the Special Needs Trust Fairness Act in 2016, beneficiaries can establish their own first-party SNT as long as they are mentally and legally competent.

In the case of an inheritance, significant gift, or settlement, a qualifying beneficiary may be able to create their own First Party SNT. This way, they may protect these funds from the reach of Medicaid or the SSA and still receive benefits. SNTs must be drafted carefully and contain certain language to avoid violating various state and federal rules and regulations. The balance in such trusts, upon the death of the disabled beneficiary, must “pay back” Medicaid first for any services provided to the disabled beneficiary.

Pooled Trusts vs. SNTs

Both pooled trusts and SNTs funded with a beneficiary’s assets are technically “first-party” trusts. (A “third–party” SNT is funded by someone other than the beneficiary, such as a parent.) However, a pooled trust does differ from an SNT in certain ways:

• One reason a pooled trust is often considered is because a wider group of people may be able to use it. For example, participation in a pooled trust may also be available to a person over 65, unlike first-party SNTs which must be created before the disabled person turns 65.
• Another difference is access to investments. Because a pooled trust is dealing with a larger group of beneficiaries, it may be able to invest in products that may not be available to a single beneficiary.
• Pooled trusts often also employ professional trustees as part of their team. The nonprofit in charge will often be staffed by people very familiar with special needs planning, the changing rules and regulations, and local services. In contrast, an individual SNT is often overseen by a family member, trusted person, or entity who serves as trustee and may be managed differently. An SNT trustee may not have the same experience or access to resources.

Pooled trusts also share similarities with SNTs. Transfers into a pooled trust, like transfers into a first-party SNT, do not prevent a person with special needs from qualifying for some governmental benefits, like Medicaid. However, such a transfer may impact SSI benefits for up to three (3) years.

Both are irrevocable trusts, and both will have a Medicaid payback provision. “Irrevocable” means contributions can’t be reversed. The payback provision means that upon the beneficiary’s death, any funds remaining in the trust (up to the total lifetime medical assistance paid on behalf of the beneficiary) must be turned over to the Medicaid state(s) that provided benefits.

States often allow the nonprofit that established the pooled trust to retain a percentage of a deceased beneficiary’s account to support its mission. Any funds or assets remaining after this reimbursement may go to the remainder beneficiaries.

When to Consider a Pooled Trust

While each beneficiary’s situation is different, a person with only a small amount of money may prefer the low cost of a pooled trust. They may also appreciate working with a nonprofit that is finely attuned to the needs of those living with special needs.

If a person prefers to have a family member or trusted loved one manage their funds, then an SNT may be a better fit.

Speak with the qualified special needs planners at Kommer Bave & Ciccone LLP to learn more about what type of trust is best for your family.

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Pooled income trusts are a viable way to gain and maintain Medicaid eligibility for many seniors, people with disabilities, and others. But there are some misconceptions surrounding these trusts, which are valuable tools for those in need of long-term care when their income exceeds Medicaid’s limits.

Here are some common misconceptions and corresponding facts about the pooled trust to help you gain a better understanding of what it can do for you or a loved one.

#1 Misconception: Pooled trusts are only for rich people.
The pooled trust is not solely for use by wealthy people. Quite to the contrary, these trusts are designed to shelter monthly income that exceeds the exempt monthly income set by Medicaid programs your “spend down” amount), which can vary by state and does change annually. In 2025, the exempt amount of monthly income for an individual receiving Medicaid home care is $1,800 and for a couple receiving Medicaid home care is $2,433. By putting excess income in this type of trust, you avoid having to spend it down while being able to pay other approved living expenses.

#2 Misconception: Pooled trusts are solely for the elderly.
Seniors over 65 are not the only ones who can join a pooled trust. Those needing assistance with income management and eligibility for government assistance can include disabled adults and others with a disability as defined by Social Security law.

#3 Misconception: Pooled trusts are permanent.
A pooled trust can be canceled at any time; therefore, it is not permanent. Participation timelines can vary according to an individual’s needs. For example, joining the trust may be temporary when it is needed to qualify for Medicaid benefits due to income limits. If monthly income is reduced, the trust may no longer be needed and will serve as a temporary solution.

However, most times, a pooled trust is a long-term solution for many who join for medical and home care government assistance.

#4 Misconception: You lose control of income when joining a pooled trust.
This may be one of the biggest misconceptions and can stop many from pursuing this important financial tool. Individuals who participate can and do decide how to manage funds disbursement needs by working with the trust company to pay approved monthly living expenses, like rent, electricity, cable, etc.

#5 Misconception: Pooled trusts just write your checks.
The pooled trust does make payments on your behalf but also ensures that your spending follows Medicaid guidelines and regulations. The purpose of joining a pooled income trust is to qualify and maintain Medicaid home care benefits. Funds are deposited into the pooled trust monthly so that this trust can pay your living expenses you may not otherwise be able to afford due to your “spend down” amount required by Medicaid.

#6 Misconception: Pooled trusts are all the same.
Pooled trusts are NOT all the same. Quality of service and costs vary. Each trust account is created and designed to fit the specific needs of the member. Pooled trusts are managed by nonprofit organizations. Each trust beneficiary has a “trustee” assigned to his/her case, who will work with you through the enrollment process and the life of the trust membership to ensure your needs are met.

#7 Misconception: A pooled trust is expensive.
When considering the cost of any trust, it’s wise to consider the benefits that can be gained, such as valuable government benefits related to long-term home care needs. Costs associated with a pooled trust may include a one-time enrollment fee, monthly administrative fee (percentage of monthly Medicaid surplus deposit), and an annual renewal fee. These fees can vary depending on the pooled trust; minimum and maximum amounts may apply.

#8 Misconception: Everyone has the same plan.
Pooled trusts do NOT employ a one-size-fits-all method. Each trust is customized to tailor each member’s unique goals for a personalized approach aligning with health and financial regulations. For example, disbursements are made according to each individual’s specific needs, and contributions made to the trust vary from one member to the next.

#9 Misconception: Pooled trusts are too complex and complicated.
Although a pooled trust may seem confusing or complex, the nonprofit organizations that manage the trust have extensive experience in these types of trust and will handle all the details. They will ensure that you are following Medicaid requirements and guidelines, therefore eliminating the need for you to navigate these complicated regulations on your own.

Making informed decisions about what is best for you or a loved one requires transparency and a clear separation of facts from fiction. Securing Medicaid eligibility through a pooled trust can ensure you or a loved one receives needed long-term home care benefits.

In such cases, it is wise to select a professional and reputable trust organization that can do the heavy lifting for you. If you have any questions or want to learn more about how this type of trust can work for you, contact the elder law attorneys at Kommer Bave & Ciccone LLP for more information.

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