Another Word About QITs – Part 5

In my last post on this topic (4/4/21) I told you about a case involving a qualified income trust (QIT) that was not used correctly causing the denial of a Medicaid application which we had filed.  I appealed and the judge reversed the denial excusing the technical mistakes made by the trustee.  

Instead of depositing the whole amount of Social Security into the trust, transferring back to the applicant the $50 personal needs allowance she was entitled to and sending the rest to the nursing home, the trustee subtracted the $50 before depositing the rest of the income into the QIT bank account.  Additionally, in one instance the trustee mistakenly deposited the Social Security into her own bank account. She realized her mistake when she wrote a check to the nursing home from the QIT account and the check was returned for insufficient funds.  She quickly corrected the mistake but only in the month after the check was received.

As I explained in my previous post, a decision by an administrative law judge can be accepted, rejected or modified by the State.  In our case that is exactly what the State did.  The judge found that the mistakes made were excusable because of the current pandemic.  The State objected.  The QIT was established right as the pandemic hit.  The trustee used the QIT correctly in the first 2 months, depositing the entire Social Security check.  Only in the 3rd month did she alter things by subtracting out the $50 before making the deposit to the QIT bank account.

When I first learned of the change I alerted the trustee and she corrected the mistake but 4 months had passed.  It is those months that the State maintained my client was not eligible for.

So back for another hearing we went.  The trustee explained and apologized for the mistake but this time the judge said the rule was clear and cannot be relaxed.  The State focused on the fact that the QIT was used correctly in the first 2 months despite the pandemic and the judge agreed.  The application was denied for those 4 months.

The lesson to be learned here is that the QIT rules are onerous but strictly enforced.  They must be followed exactly and cannot be altered in any way or Medicaid benefits may be lost.