To be eligible for Medicaid benefits in New Jersey (referred to as Long Term Services and Supports), a person’s income and resources cannot exceed a certain dollar amount annually. However, does this mean that a person must be impoverished before they can begin receiving LTSS? Not necessarily.
If a person’s gross monthly income exceeds the maximum limit allowed, then it may be possible to funnel the extra income into a qualified income trust, thus allowing them to apply for LTSS. A QIT is a trust that utilizes a dedicated bank account in which any excess income over the monetary limit is deposited. The funds in a person’s QIT account will not be included as income for the purposes of Medicaid eligibility. Social Security benefits and pension income can be placed in a QIT. A person can choose all or some income to be placed in their QIT, but at least all of one source of income (such as a pension) must be placed in the QIT.
However, any money in a QIT must be spent each month as determined by the New Jersey FamilyCare Eligibility Determining Agency. QITs cannot contain funds from the sale of property or funds from a savings account. QITs are irrevocable, and the QIT must be managed by a trustee.
As this shows, QITs can be an important part of Medicaid planning. This post provides a general overview of QITs in New Jersey, but it cannot form the basis of any legal documents a person may wish to execute. Those who want to learn more about how a QIT can help them can seek professional guidance on the matter, so they can make educated choices regarding their long-term care.