Ask the Expert: Who gets injury award?

My father received Medicaid at-home care until September, when he was accidentally injured. He's now awaiting Medicaid assistance in a long-term-care facility. He has just won a $26,000 personal injury award. We've had conflicting legal advice about what to do with this money. Everyone says Medicaid must be reimbursed for $2,000 of accident-related medical expenses. Two lawyers said we should reactivate a NYSARC special-needs trust we used while he was getting at-home care, and deposit the $24,000 balance there. One lawyer said $13,500 can go into his personal account, and $10,500 must go into the special-needs trust. Another said the $24,000 can be given to his children. Who's right? 

Let's start by explaining your situation to other readers.

NYSARC is a nonprofit organization offering trust services for people with developmental disabilities. When a disabled person's money is in a special-needs trust, it doesn't disqualify him for government assistance.

Too much income would have disqualified your father for Medicaid at-home care, for example, so you put his excess income into a NYSARC trust. When he entered a nursing home, that trust became unnecessary, because almost all his income must go to the nursing home.

His award is an asset, not income. Medicaid must indeed be reimbursed for the $2,000 injury-related expenses. You can deposit $13,500 in your father's personal account without affecting his Medicaid nursing home benefits, says Donald Hecht, a Garden City elder-law attorney. (Make sure someone holds your father's power of attorney for that account.) The remaining $10,500 can either go into the NYSARC trust or be spent on anything your father wants or needs -- but he can't give it away without delaying his Medicaid eligibility.

The bottom line Giving away assets delays eligibility for Medicaid nursing home benefits. Spending assets does not.

A website with more information Click here to find information on NYSARC.