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Highlights From the New POMS

New Clarification From Social Security Regarding Special Needs Trusts

Special Needs Planners are excited about the new POMS that the Social Security Administration (SSA) has issued regarding Special Needs Trusts (SNTs). We will be reviewing (and explaining) the changes in depth in the coming weeks.

What are the POMS and why are they important?

The POMS (shorthand for the Program Operations Manual System) is one of the primary sources of information used by Social Security employees to process claims for Social Security benefits. While there are Federal Regulations regarding Supplemental Security Income (SSI), there are no specific regulations regarding how Administration employees should evaluate and deal with trusts that benefit individuals receiving SSI.

Without a lot of caselaw or specific regulations on point, Social Security workers look for guidance from the POMS for how to interpret and apply the federal statutes to individual cases. The POMS are really the only detailed policy statement and interpretation of the law on the subject of SSI and trusts. SSA workers rely on the POMS, as do courts when cases go up on appeal.

What are some of the important changes / clarifications in the update?

There is a lot to process, but there are some exiting things at first glance. The new POMS:

  • Provide clarification regarding exceptions to the sole benefit rule for third party payments and providing detailed explanations for each exception. SI 01120.201 Subsection F

  • Provide clarification on how SSA treats trust disbursements to a trust beneficiary’s personal debit card -- the same as cash disbursements. SI 01120.201 Subsection I

  • Added subsections on how SSA treats assignment of Survivor Benefit Plans and direct deposits of SSI benefits to trusts. SI 01120.201 Subsection J

  • Added new subsection that discusses when and how SSA uses the 90-day amendment period. SI 01120.201 Subsection K

  • Added new policy to reflect statutory change effective December 13, 2016 (Special Needs Fairness Act), which allows individuals to establish their own special needs trusts and qualify for the exception to resource counting under Section 1917(d)(4)(A) of the Social Security Act. SI 01120.203 Subsection C

  • Created this new subsection discussing allowable and prohibited expenses for trusts established under Section 1917(d)(4)(A) and (C) of the Act. SI 01120.203 Subsection E

  • Clarifies that an Agent using a valid power of attorney (POA) may create a SNT. SI 01120.203 Subsection C

Where can I find the POMS?

The POMS can be found here and the specific subsections regarding SSI are found here. The transmittals to SSA regarding the particularly relevant POMS updates on Special Needs Trusts are found at the links below.

SI 01120 TN 51 - Information on Trusts, Including Trusts Established Prior to January 01, 2000, Trusts Established with the Assets of Third Parties, and Trusts Not Subject to Section 1613(e) of the Social Security Act

SI 01120 TN 52 - Trusts Established with the Assets of an Individual on or after 01/01/00

SI 01120 TN 54 - Development and Documentation of Trusts Established on or After 01/01/00

SI 01120 TN 53 - Exceptions to Counting Trusts Established on or after January 1, 2000

What if I have questions?

Call your Special Needs Planner if you have questions about how the changes may affect you or your loved one. Check back on the website for updates and consider signing up for our Special Needs Newsletter (on the home page here) for more news in the coming weeks.

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