I administer a Pooled Special Needs Trust and I understand that last year the Social Security Administration made some changes to Supplemental Security Income (SSI) that affect Special Needs Trusts. What were the changes?

The Social Security Administration made three important changes to the SSI program rules. These revisions became effective on January 1, 2005 and affect all recipients of SSI, but are especially important for beneficiaries with Special Needs Trusts. The changes are:

• Clothing is no longer considered in-kind income. Formerly, if an SSI recipient received any clothing from a third party (including a Special Needs Trust), his SSI benefit might be reduced. This is because clothing (along with food and shelter) was considered in-kind income. Now the trust funds can be used to pay for the beneficiary's clothes without reducing the SSI benefit. (However, food and shelter are still considered in-kind income that can reduce the SSI benefit.)
• The $4,500 limit on the value of an automobile has been eliminated. Formerly, if an SSI recipient owned an automobile, it had to be worth $4,500 or less, unless it was specially adapted, required for medical transportation, or needed because of distance or geography. Now, Social Security disregards the entire value of the vehicle.
• The $2,000 limit on the value of personal items a recipient can own has been eliminated. Formerly, the value of a recipient's personal property (such as furniture, computer, jewelry, etc.) could not exceed $2,000. Now there is no monetary limit on that kind of property.
  Note: The new law affects only personal items. SSI's strict $2,000 limit on liquid resources (cash, bank account, savings bonds, etc.) remains unchanged.

For more answers to commonly asked questions by trustees, get the latest edition of The Special Needs Trust Administration Manual: A Guide for Trustees, 2005 Edition.

It is a valuable reference guide for anyone who is managing a special needs trust for a person with disabilities. In an uncomplicated, user-friendly way, it explains the rules that govern Special Needs Trusts and how those rules relate to the many complicated government benefit programs that assist people with disabilities.
The Manual is for laypersons, such as friends and family of a person with disabilities, and for professionals, including attorneys, financial planners, and social workers- anyone who is administering (or considering administering) a Special Needs Trust. It is concise, easy to use, and packed with helpful information.
In clear, easy to understand language, the authors (all attorneys experienced in guiding trustees through the complex rules of Special Needs Trusts) explain how a trustee can use trust funds to meet the medical, recreation, and transportation needs of a person with disabilities without risking the benefits of government programs such as SSI, SSDI, Medicaid, and Section 8 housing. The authors give useful advice and provide many concrete examples.
The Manual is a practical reference book that answers common questions such as:

• What are my responsibilities to the disabled beneficiary?
• Can I spend money for a car, trip, or gift?
• Can I buy a house or condominium, and if so, who should own the property?
• What expenses can I safely pay without risking SSI benefits?
• How do I open a bank account?
• Does the trust need its own taxpayer identification number?
• What happens if I need to resign?

The Manual also explains trustee bond, fees, record keeping, accounting requirements, and fiduciary and investment responsibilities. Although the Manual explains how federal laws and regulations are applied in Massachusetts, it can be useful throughout the United States. Massachusetts laws, especially in respect to Medicaid, may differ significantly from other state's laws. Trustees outside Massachusetts should work with a local attorney who can guide them through the standards and practices in their state.