The Special Needs Trust Fairness Act was approved by the US Senate on September 9th and is now under consideration by the House of Representatives. The Act corrects an error in existing law that creates needless delay and legal expenses for many people with disabilities.
Disabled individuals who want to live active lives can face extraordinary costs to pay for what others are able to accomplish as a matter of course – from getting out of bed, taking a bath, or feeding or clothing oneself – to more complicated tasks – travel, reading and writing, or working productively. While Medicaid benefits may cover some medical and remedial costs there are many more expenses incurred during everyday living. And Medicaid has strict limits on the amount of assets that a beneficiary can own that can prevent an individual from saving for these non-covered expenses.
Congress recognized the limits of Medicaid in 1993, when it authorized two types of special needs trusts that allow funds to be set aside to pay for the supplemental care and non-medical needs of disabled individuals without jeopardizing their Medicaid eligibility. But that law requires that an individual special needs trust “must be established by a parent, grandparent, legal guardian of the individual, or a court.” 42 USC §(d)(4)(A). By leaving out the words “the individual” it fails to allow competent individuals from establishing their own special needs trust.
While this was likely just an error in drafting, it suggests that Congress believes that ALL persons with disabilities do not have the mental capacity to handle their own affairs. It results in unnecessary legal and court fees for those who wish to establish a special needs trust but do not have parents or grandparents to help them set up these trusts. In these instances, the individual is forced to petition the court to set up the trust.
H.R. 670, the Special Needs Trust Fairness Act is a commonsense fix. This bi-partisan legislation was introduced by Pennsylvania’s Glenn ‘GT’ Thompson (PA-5) and Frank Pallone, Jr. (D-NJ). A hearing was held on September 17th before the House Energy and Commerce Subcommittee on Health.
In a statement submitted to the Committee, Representative Thompson noted:
This simple, bipartisan, bicameral measure would eliminate a current prohibition on a disabled individual from creating his or her own Special Needs Trust, or SNT. These trusts enable assets to be saved on behalf of disabled individuals while protecting their eligibility for means- tested benefits.
Under current law, individuals who are or become disabled must have a parent, guardian, or the courts create their SNT. This places an undue monetary and logistical burden upon individuals who are seeking to secure their financial future, and runs counter to what has already been established by Congress. Individuals with disabilities have always been able to set up their own pooled trust accounts (created by Congress in 1993 and administered by non-profit organizations) and can create their own tax-free savings accounts under the recently passed ABLE Act. . . .
The perspectives of those directly impacted by this legal discrepancy coupled with my experience as a certified recreational therapist, a hospital manager and licensed nursing home administration has solidified my stance on this matter. I have had the honor of working with a number of individuals as they set out to rehabilitate their level of functioning and independence following an accident or illness. As a result, it is hard for me to find a palpable reason why we should continue to complicate their journey to self-sustainability.
As I previously mentioned, the Special Needs Trust Fairness Act of 2015 is a largely bipartisan initiative. For that I thank my colleague and ranking member, Representative Frank Pallone, who has continued to partner with me on this issue. He has consistently acknowledged that individuals facing life changing diseases or disabilities are not being treated fairly and has sought to correct this legal inequity.
In conjunction with Mr. Pallone, I respectfully ask for the support of the Committee of jurisdiction as we approach an opportunity to enable individuals living with a disability to stabilize their financial future, by advancing H.R. 670 through the legislative process, so these individuals facing disability can be treated equally under the law.
Credit to Representatives Thompson and Pallone for recognizing that after 22 years it is time for Congress to finally correct this demeaning and costly drafting error. Please contact your Congressional Representative and express your support for H.R. 670. Directions on how to contact your Representative can be found here.