What is a Qualified Income Trust (QIT), how does it work, and when is it needed to qualify for nursing home Medicaid/Choices in Tennessee?
A QIT is necessary for an individual who applies for nursing home Medicaid/Choices and has an individual gross income exceeding $2,022 dollars a month. The Department of Human Services (DHS) will not approve the Medicaid/Choices unless the needed QIT is established.
The ability to use a QIT for those that have too much monthly income to qualify for Long Term Care Benefits was established via a Colorado case called Miller v. Ibarra. In this case, a conservator for four elderly women, who were unable to qualify for Long Term Care Benefits due to monthly income that exceeded the program limits, sued the federal government. The lawsuit filed on behalf of the four ladies was successful and they won. The result of that case allowed what many now know as a “Miller Trust”. It is a common misconception that the Miller Trust and the QIT are separate entities. In fact, the Miller Trust is the same thing as a QIT. The Miller Trust became officially known as a Qualified Income Trust when it became coded as 42 U.S.C. § 1396p(d)(4)(B). It is under this coding that the assets put into a QIT account aren’t countable to an individual applying for benefits and needing a QIT.
A QIT is established by filing out a QIT trust document that can be collected from DHS. The document must have the correct language and stipulations required. A trustee must also be established to control the QIT account and make payments for the individual applying for Medicaid/Choices from that QIT account. Once the paperwork is filled out completely and correctly, the trustee and the individual applying for benefits (or the Power of Attorney for the individual) must sign the document in front of a Notary and have the notary notarize the document. The document must be taken to a bank and the account setup. It is important to note that the account is setup with the residents Social Security number and not the Trustee’s or an EIN number. DHS requires that you provide a copy of the paperwork that was taken to the bank to setup the QIT, a signature card from the new account that was setup, and a copy of a deposit slip for money deposited into the account, if the bank requires that be done at opening.
It is important to know that the QIT is an irrevocable account. The trustee of the account is only allowed to pay for certain items from the account. Currently, a resident that has a QIT is allowed to transfer their $50 Personal Needs Allowance (PRA) from a QIT back to their personal account as well as any monthly health insurance premiums for a supplemental insurance the resident may carry. If there is a spousal allocation to a community spouse not applying for benefits themselves, that amount of money can also be transferred back to the regular bank account from the QIT. It is also important to note that an applicant must leave $20 a month in the QIT account to pay for any fees, etc… that may be associated with the account. This $20 fee is accounted for by DHS and incorporated into the budget for the individual applying for benefits. Therefore, a resident should leave $20 a month (each month) in the QIT.
The QIT can be one of the most important aspects when applying for Medicaid/Choices. It is important to make sure that the account is setup correctly and timely so benefits can be approved. It is also very important to only pay for and make transfers from the trust for things that are acceptable under Medicaid rules. When in doubt always contact your local DHS caseworker with any questions concerning the setup or function of the QIT.
Bryson Eubanks—Public Benefits Specialist