For some Workers’ Compensation settlements, a Special Needs trust may be needed

A Special Needs Trust is a type of first-party trust that is often used to preserve a lump sum benefit for a low income disabled person under age 65, who needs the support of Medicaid and Supplemental Security income (SSI). Often one thinks of the these trusts in connection with someone who is on SSI because they are disabled and have not worked, such as a person with developmental disabilities or psychiatric disabilities which have prevented them from being fully engaged in the workforce over time. However, some workers who did pay into the Social Security system become disabled as a result of a workplace injury, but because they were very low earners or didn’t work very long, the amount of their Social Security Disability benefit is smaller than the SSI amount and they will therefore require the additional support from SSI. Medicaid eligibility for health insurance comes along with the SSI. The lump sum settlement which they receive upon resolution of the Workers Compensation claim would constitute “excess resources” which would make them ineligible for the SSI and Medicaid. Also, the monthly payment would be treated as Unearned Income which would reduce the SSI payment dollar-for-dollar. Note that the issue I am writing about is distinct from the issue concerning Social Security Disability offsets, in which up to 80% of an SSD payment can be offset by the concurrent receipt of Workers’ Compensation benefits. See EN-05-10018

This is where a Special Needs Trust (SNT) comes in. An SNT needs to be created by a parent, grandparent or court. See 42 USC 1396p(d)4(A), N.J.A.C. 10:71-4.11(g)1. If there’s no parent or grandparent to create the trust, the Court can create it at the request of the disabled person per N.J.S.A. 3B:11-36 and -37. A motion then needs to be made to the Comp judge to direct that the payment be made into the SNT. These steps should be taken before the payment is made by the carrier. The Trust is then established and handled by the Trustee, and the funds are utilized to supplement but not supplant the means-tested benefits.

It is more common for a Special Needs trust to be established to receive a personal injury (PI) settlement or an inheritance than in the workers compensation context. This is probably because most permanently disabled workers already paid enough into the Social Security system to be insured under the Social Security Disability system (SSD), which is not a means-tested program and has no asset or income limits.

The main point is that timing is critical, as it can take several months for this process to be accomplished. Just figuring out who should be the Trustee is often a bedeviling problem. So if it looks like your case will result in income below the SSI limit, so that the worker will end up receiving SSI and SSD, as well as Medicaid, the concept of a Special Needs trust should be explored early on.

For representation and co-counsel involving establishment of special needs trusts, call 732-382-6070

 

We prepare Special Needs Trusts and collaborate with other attorneys to prepare and establish the trusts when their cases are settled. For advice, call … 732-382-6070

Waiting time for Social Security appeal process is growing

If you are no longer able to work due to severe, medically-documented physical or mental conditions, you may be thinking about filing a claim for Title II Social Security Disability benefits. You need to be prepared for a long, slow process. It can easily take three years from start to finish.

First of all, you generally do not file your claim until after you have stopped working full time and you are “disabled.” Typically you would try to start out collecting state temporary disability insurance to cover you during the initial five-month waiting period. You then file your claim on-line through the www.ssa.gov website. You submit medical records and the initial process can take three months.

If the claim is denied — which is likely — you must file for Reconsideration on-line within 60 days. The case will be reviewed by different people, and you may be sent for medical exams. This process will typically take 3 to 5 months.

If the claim is still denied — which is likely — you must file on-line your Request for Hearing with a federal Administrative Law Judge. New Jersey has three hearing offices, called ODAR – Office of Disability Adjudication and Review. They are in Jersey City, Newark and South Jersey. You will then be waiting well over a year for a hearing. After the hearing, it can take several months before you receive the ALJ’s decision. This entire process at the ODAR is called “processing time.”  In its November issue of the NOSSCR Social Security Forum, the National Organization of Social Security Claims Representatives (NOSSCR) posted the National Ranking Report by average processing time for October, 2014 (information was provided to them by the Social Security Administration). The Newark office ranked 109 out of 163, with an average processing time of 463 days. The South Jersey office ranked141, with an average processing time of 508 days. What does this mean for you?

You may become desperate and try to find some work. Keep in mind that the critical issue in most SSD cases is whether there is some kind of work “generally available in the national economy” that someone with your limitations & conditions is theoretically capable of performing. So if you return to work during this time period, even out of sheer economic necessity, working will have an impact on the credibility of your case.  It may or may not be “fatal” to the claim.

As attorneys we are prepared to collect the evidence and the defenses which might help your claim even if you attempt to work while the case is pending. Talk to us if you are unrepresented.

call for appointment… 732-382-6070

Get help with your paperwork when you struggle with illness

I recently had the occasion to make a house call to meet with a client who had stopped working about 4 years ago in his early 50’s. He became gravely, permanently  ill and eventually needed to apply for Social Security Disability benefits, which were approved. He had to endure the two-year wait until he could receive Medicare. As he got caught up in the throes of his illness, with repeated hospitalizations and ongoing difficult treatments, there were things that he overlooked that could have been very beneficial. However he was usually so ill that he couldn’t see his way clear to realize what needed to be done.

For instance, it turned out that he could have applied to receive his pension early once he was approved for disability by the Social Security Administration. Since the pension can’t start paying until the application is made, several years of benefits were lost. Also, once the Affordable Care Act went online in 2013, perhaps he could have gotten himself some health insurance through an Exchange while he waited for his Medicare to begin. It was all just tragic.

The start of a period of debilitating illness is the time to make sure you have someone lined up as your power of attorney and paper-work helper, who can start investigating what you may be eligible for, make sure your bills are paid ontime, and help you get everything prepared and filed on time. Phone a friend – create a lifeline.

Call for advice on disability benefits & estate planning …

732-382-6070

 

Affordable Care Act (Obamacare) Coverage – Automatic Renewal Available

More than 5.4 million people enrolled in health insurance plans through the federally subsidized health insurance exchanges that were established by the Affordable Care Act (ACA), and 86% of them were eligible for subsidies, according to the NY Times on June 27th. The Department of Health and Human Services has issued regulations that enable most ACA enrollees to have their policies automatically renewed without a need to reapply. If there has been a material change in income or the person wants their premium and subsidy to be recalculated, they would need to re-apply through www.healthcare.gov.

The next open enrollment period begins November 15th, and anyone who isn’t presently insured should certainly make plans to enroll in either an ACA insurance plan or the expanded Medicaid plan if their state is participating. This is especially useful if you are awaiting a decision on your Social Security Disability claim or have been approved  but cannot yet receive Medicare benefits (because there is a 2-year waiting period from the start date of your disability benefit). ACA Subsidies are based on the Modified Adjusted Gross Income (MAGI) reported on the most recent federal income tax return, and are available if household income is up to 4x the poverty level — i.e., if your income is up to $45,960 in 2014 you may qualify for a subsidy to keep your premiums affordable. The Times reports that “The Congressional Budget Office estimates that subsidies this year will average $4,400 for each person who receives a subsidy.”  http://www.nytimes.com/2014/06/27/us/most-will-be-able-to-automatically-renew-coverage-under-health-law.html?_r=0 This may amount to 50% of the cost of the insurance, depending on where you live.

In keeping with my recent comments about the need to continue treatment or health care monitoring to maintain documentation of your ongoing disabling conditions, it is critically important to do whatever you can to maintain some kind of health insurance coverage.

For representation on Social Security Disability Appeals, contact us at 732-382-6070

Veterans Pursuing Social Security Disability Claims

Veterans Compensation pays a monthly stipend based on the severity of a service-connected disability. The recipient may not be totally disabled or unemployable. Social Security Disability insurance, on the other hand, is available to a person who is not engaged in Substantial Gainful Activity (“SGA”) and cannot perform SGA due to a severe, medically-determinable impairment that has lasted a year or will continue despite treatment, and which prevents him from engaging in any kind of full time work, even if that work is really different from what the claimant used to do. www.ssa.gov/disability.

You file your original claim online after you’ve stopped working due to your severe medical condition(s). There are special rules concerning Wounded Warriors who are still maintained in active duty status but who have been reassigned to the Warrior Transition Unit (WTU). Keep in mind that some medical conditions may be chronic, but by themselves won’t be a basis for SS Disability approval — an example is high blood pressure that is well-controlled by daily medication.

With your claim, you submit current relevant medical evidence. You’ll authorize the VA medical center to release specific treatment records and C&P reports. It will take about 6 months for your initial claim to be processed, and the SSA may send you to CME’s (Consultative Medical Examiners) to be examined. If you are denied, you only have 60 days to file your appeal.

Call us for representation on Social Security Disability appeals…

732-382-6070