Can an injured party living in California still be eligible for Medi-Cal and Supplemental Security Income (SSI) benefits while receiving structured settlement payments?

Yes.

Federal law permits a first party Special Needs Trusts (SNTs) to hold assets (such as structured settlements) of injured parties under age 65 while preserving their needs-based public benefits such as California’s Medi-Cal, Medicare and SSI. However, under federal law, individual Special Needs Trusts cannot be used by individuals over age 64 and over without disqualifying the injured parties from receiving public benefits. A plaintiff who, for example, is eligible for Medi-Cal and receives a litigation recovery will lose Medi-Cal benefits until the litigation recovery is spent below $2,000 for an individual or $3,000 for a couple (the resource limits for Medi-Cal). Fortunately, a first party Pooled SNTs can overcome these disqualifying hurdles.

However within days an injured party of any age or settlement amount can combine a Pooled SNT with structured settlement assets to preserve government benefits while receiving income for nonmedical needs. Pooled SNTs are a state approved master trust that is established and managed by a charity. Because they are created through a nonprofit entity, support a “pool” of individuals, not a single individual, and the settlement money remains in the trust and is not owned by the plaintiff until distributed, the income from these trusts is not counted against needs-based public benefits.

When the trust is terminated and the state lien has been paid, the remainder passes to heirs just as it would with an individual SNT. There is no minimum funding requirement and the trust documents are provided to Plaintiff firm within three business days.

Pooled SNTs can be used for an individual of any age, but this is the only type of special needs trust available to people age 65 or older.

Much like the SNT used to preserve a plaintiff’s eligibility for Medi-Cal, a Medicare Set Aside Arrangement (MSA) is used to preserve a plaintiff’s future eligibility for Medicare. When the plaintiff is receiving (or soon will receive) both Medi-Cal and Medicare, an MSA is placed inside a Pooled SNT but must be professionally administered.

Currently, only one California Pooled SNT has the ability to provide plaintiffs’ protection of their settlement recovery from both Medi-Cal and Medicare: the California Charities Pooled Trust (CPT).