Many New York City residents who are in need of community Medicaid services such as home care, adult day care, or prescription drugs find that they exceed New York Medicaid’s 2025 income allowance, which is $1,800 a month for an individual and $2,433 a month for a couple (figures are for those aged 65+ or disabled). Many seniors receive social security, pension, and investment income which can easily surpass this allowance and disqualify them from receiving much-needed health services.
Although Medicaid does give an otherwise qualified person the option to “spend down” their income by paying the difference to their health care providers and still receiving benefits, that option, in 2025, leaves a single person with only $1,820 a month (the $1,800 income allowance plus a $20 income disregard) to pay for rent, groceries, clothing, and other essential expenses. The amount for married couples where both are applying for benefits, $2,453 a month (the $2,433 income allowance plus a $20 income disregard), while significantly higher than in the past, can still be very challenging, especially in New York City. Who among us, especially in New York City, can comfortably afford all living expenses on these amounts? The solution for many New York residents, regardless of whether they are under 65 or over (if disabled), is the use of Pooled Income Trusts, also known as Pooled Supplemental Needs Trusts, which are unique trusts permissible under both New York and Federal Law. In Queens and Brooklyn, the areas in which The Law Offices of Roman Aminov practices, these pooled income trusts are widely used.
Let us take an example to illustrate how a pooled income trust works in 2025: Harry is a single 72-year-old man living in Flushing, Queens, who recently suffered a stroke and needs assistance with his basic daily activities. He currently receives $1,500 a month from Social Security, $1,000 a month from his pension plan, and $500 a month from an annuity for a total of $3,000 a month. His basic living expenses are $1,800 a month. If Harry applied for Medicaid to assist him with home care, he would be allowed to keep $1,820 of his income, and the rest ($3,000 - $1,820 = $1,180) would need to be spent on his home health care service as part of his "spend-down." Medicaid would then pay the difference for his approved care. While he can cover his $1,800 basic expenses with the $1,820 he keeps, he has very little left over, and his excess income is going directly to offset care costs without providing additional flexibility. There is another option, described below, which many Medicaid recipients are using to help them maintain their lifestyles while receiving the care they so desperately need.
If Harry is determined by Medicaid to be disabled (which is a requirement for individuals under 65, and often a criterion for those over 65 needing this type of planning), he would be eligible to participate in a pooled income trust. Pooled income trusts are administered by not-for-profit organizations and are available to New York residents, including clients residing in Queens, Brooklyn, or Long Island. In Queens, estate lawyers routinely use pooled trusts to meet the needs of their clients. Instead of having to pay his "excess" income of $1,180 directly to his Medicaid Long Term Care Plan (MLTC) or other healthcare providers until he only has $1,820 left each month, Harry would send this "excess" income to the non-profit administering the pooled trust. The non-profit would then be able to pay for any services and expenses not covered by Medicaid but for Harry's benefit, including rent, mortgage payments, clothes, recreational activities, utilities, food, and more. Harry would simply send the bills to the organization, which would use the “excess” income in his trust sub-account to pay the bills on his behalf. The assets in Harry’s trust sub-account can carry over from month to month, but any money which is left after Harry passes away generally remains with the non-profit organization to continue their charitable work or may be used to reimburse Medicaid, depending on the specific trust and state rules. There are fees associated with setting up and continuously managing pooled income trusts, but they often pale in comparison to the amount which a client can save and the flexibility gained.
In addition to an income limit, Medicaid also has an asset limit. If Harry had assets over the allowable limit of $32,396 in 2025 for an individual, he would generally not be able to transfer excess assets into a pooled income trust to qualify because pooled income trusts are primarily for excess income. Asset protection typically requires different strategies, such as Medicaid Asset Protection Trusts, often implemented well in advance due to look-back periods.
Pooled trusts have certain drawbacks, although not nearly enough to avoid them in most income-related cases. There are initial setup and monthly fees. Also, Harry will not be able to directly withdraw the money from his pooled trust sub-account; instead, he must submit his bills to be paid by the trust. Additionally, if Harry does not fully use his excess funds deposited into the trust each month, and those funds accumulate, any funds remaining in the pooled trust sub-account upon his passing will generally be retained by the non-profit organization or used to reimburse Medicaid, and his heirs will not inherit them.
It is always recommended that a potential applicant, especially one with income over the $1,820 threshold (for individuals in 2025), consult an elder law attorney prior to applying for Medicaid. Working with an attorney can potentially save the client months of waiting for much-needed care and ensure all available options are explored. For a free consultation with a Queens and Brooklyn based elder law attorney, contact the Law Offices of Roman Aminov today at 347-766-2685.
