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New Social Security Rules Ease Trust Eligibility Process

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Social Security rules

How can you meet Social Security rules on asset and income eligibility? If you have resources, you might be able to transfer them to a special needs trust. The idea has been around for quite a while. Still, a lot of questions have lingered over details of the eligibility rules. A recent release of new Social Security rules last week cleared up a number of the uncertainties. Mostly, the new rules are favorable to Social Security recipients.

We’re going to explain some of the changes in the rules, but first a little background information. If you have a hard time with introductions, just jump down to the “so what changed” section below.

Program Operations Manual System — the POMS

But first, a word about how Social Security rules work. The Social Security law fills volumes, and almost no one actually reads the details. The Social Security Administration — the SSA — publishes reams of additional rules but few read those, either.

Most of the operational details about the Social Security rules come from a single source: the Program Operations Manual System. People in the know refer to the entire, complicated set of documents as the POMS. It is (they are?) not actual law or administrative regulations. The POMS are (we’re going to settle on the plural here) much more important. They tell SSA case workers how to understand, interpret and apply the law.

When, for instance, a POMS section instructs the worker to send every self-settled special needs trust to a regional office for review, that will happen in almost every case. That should help assure that trust rules are expertly and uniformly applied. Of course, the POMS are also complicated — so individual workers might not understand the instructions clearly. Still, the POMS help standardize the application of Social Security rules. They also help Social Security beneficiaries and their advocates to understand how the system should work.

One of the most important programs for people with limited means isn’t technically a Social Security program at all. Supplemental Security Income (SSI) is Social Security’s poorer cousin — it provides benefits to poor people who are disabled and have no substantial work history. Though it is not Social Security, the SSA administers it — and it has its own section of POMS provisions.

The new rules

On April 30, the SSA published a set of four new POMS provisions, to be effective immediately. The new rules had rumored, and even promised, for years. Most advocates have discussed the new rules for that entire time, so there is little surprising information in the new release. There are, however, a number of important points.

You can read the new Social Security rules for yourself. They are available online at either the SSA’s “POMS Recent Changes” site or by looking up the individual POMS sections. If you use the latter approach, start with POMS section SI 01120.200 and then read the three sections following that one. Or you can read our analysis here.

So what changed in the Social Security rules?

Here are some of the most significant changes in the new rules:

  1. A court order assigning some kinds of income to a trust may make the income non-countable. If, for instance, an SSI beneficiary has an award for child support or spousal maintenance (alimony) payments, the divorce court may be able to direct that those payments go into a special needs trust. If properly done, the payments may not be income for SSI purposes.
  2. Putting money on an SSI beneficiary’s pre-paid debit card is just liking giving cash. The key problem here arises when the debit card belongs to the SSI beneficiary. If the trust owns the card and controls its use, the answer may be different.
  3. In fact, one of largest changes involves a rule most people understood to be true before. If a prepaid debit card is controlled by the trustee, and is restricted to prevent use for food and shelter items, putting money on the card should be permissible. This is the True Link card model. We utilize True Link cards regularly, and it is reassuring that the new POMS provisions approve the program by name. The SSA refers to the category as “administrator-managed prepaid debit cards” and explicitly OKs their use.
  4. Travel issues have concerned advocates for a long time. The new POMS provisions make clear that a special needs trust can pay for travel expenses for the beneficiary and necessary companions. It even acknowledges that sometimes there might need to be more than one companion. It also approves, in limited circumstances, travel by another person to visit the SSI recipient / trust beneficiary.

Administrative changes also help trustees

In addition to the substantive rule changes above, a number of administrative changes look hopeful. In general terms, the new rules make it easier for trustees to work with the SSA to help trust beneficiaries. Some examples:

  1. A given trust might have existed for years, without questions from the SSA. Now, if the case worker brings up new concerns based on changes in SSA’s interpretation, the trustee will normally have 90 days to make changes to the trust. That latitude already existed for some kinds of necessary changes, but the scope has been expanded.
  2. The rules for court establishment of a special needs trust have been eased. Before, a lot of ambiguity existed, and many SSA workers thought the key was to look at the words used by the court. The new POMS provisions focus primarily on whether the trust was signed before the court ordered establishment of the trust.
  3. [Special note for Arizona residents] The new rules continue to clarify that a self-settled special needs trust must NOT name a particular state’s Medicaid program as a payback recipient. Unfortunately, Arizona law explicitly requires that a trust name Arizona’s Medicaid program (AHCCCS) as a recipient and a beneficiary. It is, of course, impossible to satisfy both state and federal rules — and that problem continues.

We’re still looking at the rules, and probably will have some additional observations later. For now, though, it looks like the new POMS provisions are mostly beneficial for special needs trusts and their beneficiaries.

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Robert B. Fleming


Robert Fleming is a Fellow of both the American College of Trust and Estate Counsel and the National Academy of Elder Law Attorneys. He has been certified as a Specialist in Estate and Trust Law by the State Bar of Arizona‘s Board of Legal Specialization, and he is also a Certified Elder Law Attorney by the National Elder Law Foundation. Robert has a long history of involvement in local, state and national organizations. He is most proud of his instrumental involvement in the Special Needs Alliance, the premier national organization for lawyers dealing with special needs trusts and planning.

Robert has two adult children, two young grandchildren and a wife of over fifty years. He is devoted to all of them. He is also very fond of Rosalind Franklin (his office companion corgi), and his homebound cat Muninn. He just likes people, their pets and their stories.

Elizabeth N.R. Friman


Elizabeth Noble Rollings Friman is a principal and licensed fiduciary at Fleming & Curti, PLC. Elizabeth enjoys estate planning and helping families navigate trust and probate administrations. She is passionate about the fiduciary work that she performs as a trustee, personal representative, guardian, and conservator. Elizabeth works with CPAs, financial professionals, case managers, and medical providers to tailor solutions to complex family challenges. Elizabeth is often called upon to serve as a neutral party so that families can avoid protracted legal conflict. Elizabeth relies on the expertise of her team at Fleming & Curti, and as the Firm approaches its third decade, she is proud of the culture of care and consideration that the Firm embodies. Finding workable solutions to sensitive and complex family challenges is something that Elizabeth and the Fleming & Curti team do well.

Amy F. Matheson


Amy Farrell Matheson has worked as an attorney at Fleming & Curti since 2006. A member of the Southern Arizona Estate Planning Council, she is primarily responsible for estate planning and probate matters.

Amy graduated from Wellesley College with a double major in political science and English. She is an honors graduate of Suffolk University Law School and has been admitted to practice in Arizona, Massachusetts, New York, and the District of Columbia.

Prior to joining Fleming & Curti, Amy worked for American Public Television in Boston, and with the international trade group at White & Case, LLP, in Washington, D.C.

Amy’s husband, Tom, is an astronomer at NOIRLab and the Head of Time Domain Services, whose main project is ANTARES. Sadly, this does not involve actual time travel. Amy’s twin daughters are high school students; Finn, her Irish Red and White Setter, remains a puppy at heart.

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Matthew M. Mansour


Matthew is a law clerk who recently earned his law degree from the University of Arizona James E. Rogers College of Law. His undergraduate degree is in psychology from the University of California, Santa Barbara. Matthew has had a passion for advocacy in the Tucson community since his time as a law student representative in the Workers’ Rights Clinic. He also has worked in both the Pima County Attorney’s Office and the Pima County Public Defender’s Office. He enjoys playing basketball, caring for his cat, and listening to audiobooks narrated by the authors.