The Settlement Alliance

What Types of Goods and Services are Eligible for SNT Distributions?

What Types of Goods and Services are Eligible for SNT Distributions?

Jul 29, 2016

For individuals who receive needs-based government benefits (e.g. SSI, Medicaid, etc.) and are currently deemed disabled, a Special Needs Trust (“SNT”) can help pay for vital goods and services. By placing settlement proceeds into an SNT, an individual can access their settlement funds without jeopardizing eligibility for needs-based benefits.

Generally speaking, funds within an SNT must be used to purchase goods and services for the sole benefit of the disabled individual. Eligible goods and services are intended to supplement those already covered by needs-based benefits.

Examples of goods and services eligible for distributions are:

  • Purchasing a home; paying off a mortgage on a home; modifying a home to accommodate an individual’s disabilities; home repairs, remodeling, or deferred maintenance expenses
  • Purchasing an automobile and/or paying for registration and insurance
  • Purchasing home furnishings or appliances
  • Medical expenses and/or bills not covered by Medicaid or Medicare (e.g. higher quality wheelchair than what is authorized by Medicaid/Medicare)
  • Dental expenses, eyeglasses, physical therapy, support services not covered by any benefit program
  • Education expenses (including computer, software, books, etc.)
  • Entertainment/recreation expenses
  • Paying off debts (e.g. existing credit card debt, loans with supporting paperwork)
  • Personal hygiene (e.g. haircuts, manicures)

Adhering to Federal and State Guidelines

There are federal and state guidelines that determine how a Trustee of a Special Needs Trust can distribute funds in the trust for the disabled person’s benefit. The guidelines can vary widely from state to state, so it is important for the trustee to be knowledgeable about which distributions are and are not eligible in the disabled person’s state of residence. Before making any decisions, the trustee should contact the caseworker and/or the local benefits agency.

Special Needs Trusts can greatly improve a disabled person’s quality of life by providing resources that are not currently available through their governmental programs. For more information, contact us online or at 800-464-2500.

We are proud to partner with the highest rated structured settlement providers in the industry:

  • American general Life Companies
  • Berkshire Hathaway Structured Settlements
  • MetLife
  • Mutual of Omaha
  • New York Life
  • Pacific Life
  • Prudential