From the Center on Budget and Policy Priorities:
Starting this month, families can open Trump Accounts for their children. Those welcoming new babies between 2025 and 2028 will qualify for a $1,000 federal contribution to seed the account. But for some families caring for disabled children — who will need savings the most as they come of age — the accounts could create big problems. That’s because once account holders reach adulthood, the money saved in their Trump Accounts will likely run afoul of the extraordinarily strict asset limits in the Supplemental Security Income (SSI) program for low-income disabled people. If those savings exceed the cap — just $2,000 — it will lead not only to the loss of needed monthly income support from SSI, but could also jeopardize their eligibility for health care and community-based services through Medicaid. …
This is another example of this administration not looking at the implications of the vulnerable population..
ReplyDeleteChildren with unstable living situations or low-income caregivers who do not file traditional tax returns may face hurdles or get left out of receiving the initial government allocation.
Sadly, I am not sure this was unintentional. They may see reducing the SSI rolls as a feature rather than a bug. And SSI in some ways is the least of the issue--at least with that, the young adult can spend down (it probably won't take too long) and then become eligible. As the report notes, Medicaid is a major hurdle too. If they live in a state with a Medicaid asset limit, they could lose health care, long-term supports and services, durable medical equipment, etc. It's not like someone with paralysis can wait for their ventilator to be cleared out, or someone who got an organ transplant can postpone anti-rejection meds.
ReplyDeleteOnce they use up the money over $2K they will be back on SSI and Medicaid.
ReplyDeleteWho knows, maybe there will be an exclusion for this type of asset.
Once they spend it down to under $2k they can get Medicaid the next month, if their state does everything right. But what happens when they have $4k of resources and need $8k of treatment per month? Getting Medicaid the next month doesn't help a paralyzed person who needs their trach suctioned now, or a transplant recipient who needs anti-rejection drugs every day. But you're right to say "who knows" if there will be a resource exclusion. Congress would have to do it, so probably not, or at least not until a rich and well-connected person's severely disabled 18 year old is cut off from care.
DeleteMaybe there is a way to put that entire account into a SNTF (Special Need Trust Fund)?
ReplyDeleteIRS guidance (not law) says they can be rolled into ABLE accounts before age 18. It's not clear if that can be done without a 10% penalty and income tax after age 18. And if you aren't savvy enough to do it and your kid loses Medicaid, it really sucks (especially if you're in a state with years-long waitlists for Medicaid waivers and other services and benefits).
DeleteI don't know from anything about these accounts but if they are in the kids name, would they be considered a resource at any age? Say a single mom and her 3 year old kid, kid has Trump account but has some issue and applies for SSI and is it a countable resource? Age 18 is one issue, but prior to that?
ReplyDeleteThese accounts are not mandatory.
ReplyDeleteBoo hoo hoo A government give-away that might provide someone with enough resources to not qualify for welfare. Boo hoo hoo
ReplyDelete