Except as provided in SI 01120.203A, this section applies to trusts “established with the assets of an individual.” A trust is considered to have been established with the assets of an individual if any assets of the individual (or spouse), regardless of how little, were transferred into the trust other than by a will. For the definition of an asset, see SI 01120.201B.1. in this section.

These provisions apply to trusts without regard to:

• •

  the purpose for which the trust was established;

• •

  whether the trustees have or exercise any discretion under the trust;

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  any restrictions on when or whether distributions may be made from the trust; or

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  any restrictions on the use of distributions from the trust.

Therefore, any trust established with the assets of an individual on or after 01/01/00 will be subject to these provisions and may count in determining SSI eligibility.

No clause or requirement in the trust, no matter how specifically it applies to SSI or another Federal or State program, can preclude a trust from being considered under the rules in this section. An exculpatory clause is one that attempts to exempt the trust from the applicability of these rules. For example, an exculpatory clause might state, “Section 1613(e) of the Social Security Act does not apply to this trust.” Such a statement has no effect on whether these rules apply to the trust.

In the case of an irrevocable trust into which the assets of the individual (or the individual’s spouse), along with the assets of another individual(s), are transferred, these provisions apply to the portion of the trust attributable to the assets of the individual (or spouse). Thus, in determining countable resources in the trust, you must prorate any amounts of resources, based on the proportion of the individual's assets in the trust.

EXAMPLE: Jimmy is an adult with cerebral palsy. Their grandparents left $75,000 in trust for them in their wills (third-party testamentary trust). Recently (after 01/01/00), Jimmy won an employment discrimination lawsuit and received a $1,500 judgment, which they deposited into the trust that their grandparents established. The $1,500 award is countable income in the month Jimmy receives the judgment because it is not irrevocably assigned to the trust. The $1,500 of Jimmy's funds are subject to these provisions and could be a resource if payment could be made to Jimmy or for their benefit (see SI 01120.201D.2. in this section). The $75,000 with which Jimmy’s grandparents established the trust, by will, for Jimmy’s benefit is not subject to these provisions but must be evaluated under the instructions for third-party trusts in SI 01120.200.

The following are examples of trusts to which the trust provisions in this section apply:

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  An individual who was the plaintiff in a medical malpractice lawsuit becomes the beneficiary of a trust under a settlement agreement. The agreement states that the defendant's insurance company established the trust instead of paying the settlement funds directly to the plaintiff. The settlement funds meet the definition of assets under SI 01120.201B.1. in this section because they are payments that the individual is entitled to but did not receive because they were made by an entity acting on behalf of or at the direction of the individual. Therefore, the trust was established with the assets of the individual.

• •

  The same result would occur if a court had ordered placement of the settlement in a trust, or if the individual was a child, regardless of whether State law requires placement of the settlement in a trust for the child.

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  A disabled SSI recipient over age 18 receives a settlement, which is deposited directly into a trust. In this example, the settlement is the recipient's income. Because the settlement is the SSI recipient’s income, the recipient is the grantor of the trust and the trust is a resource, unless it meets an exception in SI 01120.203.

If the trust meets an exception and is not a resource, the settlement would still be considered income unless it is irrevocably assigned to the trust or trustee. So, for instance, if a court had ordered the settlement to be paid directly into an excepted trust, we would consider the settlement to be irrevocably assigned to the trust/trustee, and we would not count it as income. Refer to SI 01120.201J.1.d. in this section regarding irrevocable assignment. 

The following are examples of trusts where the trust provisions in SI 01120.201 do not apply:

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  Lombardozi, age 67, has a settlement agreement due to an automobile accident that left them paralyzed in 1994. Under the agreement, they receive a lump-sum payment in March of each year. Since 1995, the annual lump-sum payments have been deposited into an irrevocable trust. We do not consider the payments received in 03/00 and years thereafter as establishing a trust for purposes of these provisions. They are additions to a trust established prior to 01/01/00 and are evaluated under SI 01120.200.

• •

  Same situation as the bullet above except that Lombardozi receives an inheritance of $3,000 that they deposit into the trust. We evaluate the trust under the rules in SI 01120.200 and the deposit of the inheritance as a transfer of resources under SI 01150.100.

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  Gates is a disabled child. Their grandparent established an irrevocable trust with $2,000, of which Gates is the beneficiary, in 12/97. Gates won a lawsuit in 02/00 and placed the money from the judgment ($50,000) in the trust that their grandparent established. Since Gates transferred money into the third-party trust after 01/01/00, the deposit of the judgment funds ($50,000) on or after 01/01/00 means that the individual’s portion is evaluated under the provisions in this section. The funds deposited by their grandparent are not evaluated under these provisions since they are funds of a third party subject to evaluation under SI 01120.200.

In the case of a revocable trust established with the assets of the individual, the entire corpus of the trust is a resource to the individual. However, certain exceptions may apply. For exceptions to counting trusts established on or after 01/01/00, see SI 01120.203. For instructions on revocability, see SI 01120.200D.1.b. and SI 01120.200D.3.

Any disbursements from a trust that is a resource that are not “to or for the benefit of” the individual are a transfer of resources. For information on payments for the benefit of or on behalf of the individual, see SI 01120.201F.1. in this section. For transfer of resource provisions, see SI 01150.100.

Jones is a young adult with intellectual disabilities. Jones had a revocable trust established after 01/01/00. Their guardian spent all but $5,000 of funds in the trust on Jones' behalf. Their parent files for SSI for Jones, but Jones is not eligible because of the money in the trust. Their parent takes a $4,500 disbursement from the trust and makes a down payment on a new car that the parent says they will use to transport Jones. However, the parent registers the car in their own name. Even though the parent will use the car to transport Jones, the purchase of the car is a transfer of resources since the car does not belong to Jones. For policy on purchases for the benefit of the individual and titling of property, see SI 01120.201F.1. in this section.

In determining whether an irrevocable trust established with the assets of an individual is a resource, we must consider how the trust can make payments. If the trustee can make any payments to or for the benefit of the individual or individual's spouse, the portion of the trust from which the trustee can make payments and that is attributable to the individual is a resource. However, certain exceptions may apply. For possible exceptions, see SI 01120.203. For information on payments for the benefit of or on behalf of the individual, see SI 01120.201F.1. in this section. For information on revocability, see SI 01120.200D.1.b.

Take into consideration any restrictions on payments to determine whether the trustee can make payments to or for the benefit of the individual. Restrictions included in the trust may include use restrictions, exculpatory clauses, or limits on the trustee's discretion. However, if the trust can make a payment to or for the benefit of the individual under any circumstance, no matter how unlikely or distant in the future, the general rule in SI 01120.201D.2.a. in this section applies: the portion of the trust from which payment can be made to or for the benefit of the individual and that is attributable to the individual is a resource, provided that no exception from SI 01120.203 applies. For information on payments for the benefit of or on behalf of the individual, see SI 01120.201F.1. in this section.

The following are examples of irrevocable trusts and their resource treatment:

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  An irrevocable trust provides that the trustee can make a one-time disbursement that totals $2,000 to, or for the benefit of, the individual out of a trust with $20,000 in assets. Only $2,000 is considered a resource under SI 01120.201D.2.a. in this section. The other $18,000 is considered to be an amount that cannot, under any circumstances, be paid to the individual and may be subject to the transfer of resources provisions in SI 01120.201E in this section, SI 01150.100, and SI 01150.121.

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  A trust contains $50,000 that the trustee can pay to the beneficiary only in the event that they need a heart transplant or on their 100^th birthday. The entire $50,000 could be paid to the individual under these specific circumstances and therefore is considered a resource.

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  An individual establishes an irrevocable trust with $10,000 of their assets. Their parents contribute another $10,000 to the trust. The trust permits distributions to, or for the benefit of, the individual only from the portion of the trust contributed by their parents. The portion of the trust contributed by the individual is not a resource under the provisions in this section because it is not available to them, but it is subject to evaluation under the transfer of resources provisions in SI 01150.100 (see also SI 01120.201E in this section). The portion of the trust contributed by the individual's parents is subject to evaluation under SI 01120.200.

We consider payments to be made to the individual when any amount from the trust, including amounts from the corpus or income produced by the trust, are paid directly to the individual or someone acting on their behalf, such as a guardian or legal representative.

For payments on behalf of or for the benefit of an individual, see SI 01120.201F.1. in this section. Also, for more instructions on disbursements from trusts, see SI 01120.201I in this section.

When all or a portion of the corpus of a trust, established with the individual’s or spouse’s resources, cannot be paid to or for the benefit of the individual, the portion that cannot be paid is considered a transfer of resources for less than fair market value.

Consider the date of the transfer to be:

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  the date the trust was established; or, if later,

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  the date payment to the individual was foreclosed (i.e., an action was taken that precludes current or future payments from the trust).

In determining the value of the transfer, do not subtract the value of any disbursements made after the date of the transfer, as determined according to the instructions in SI 01120.201E.1. in this section. Additions to the foreclosed portion of the trust after the date of the transfer may be new transfers that you must develop separately.

For instructions related to transfer of resources, see SI 01150.001.

When all or a portion of the corpus of a trust, established with the individual's or spouse's resources, is a resource to the individual and payment is made from that portion of the trust to or for the benefit of another, such a payment is a transfer of resources.

The following are examples of trusts where the transfer penalty applies.

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  Russell is an adult SSI recipient. Upon the death of their parent, Russell receives the proceeds of a life insurance policy in the amount of $30,000. They use the proceeds to establish an irrevocable trust solely to pay for the college expenses of their younger sibling, in accordance with their parent's wishes. Receipt of the insurance proceeds is income to Russell. Establishment of the trust is a transfer of resources by Russell since the terms of the trust foreclose payment to Russell or for their benefit. Even though establishing the trust was their parent's wish, they were not legally obligated to do so. Their parent could have established a trust in their will or named the younger sibling as beneficiary of the insurance policy.

• •

  Same scenario as in the first example, except that Russell establishes an irrevocable trust for the benefit of their sibling and themselves. The trust is a resource to Russell and makes them ineligible. The trust makes a $5,000 tuition payment to State College on behalf of their sibling. The $5,000 payment is a transfer of resources for Russell. Although counting the trust as a resource would make them ineligible, if the trust principal were spent down to the point where it would allow resource eligibility, we would still have to consider any tuition payments or other payments to or on behalf of their sibling made within the 36-month transfer look-back period. For more information on the transfer penalty, see SI 01150.110.

A non-resource asset is an asset that meets the definition in SI 01120.201B.1. in this section but does not meet the definition of a resource in SI 01110.100B.1. and SI 01110.115.

When we consider as a resource all or a portion of the corpus of a trust established by an individual or spouse with the individual's or spouse's non-resource assets, the transfer of resources penalty may apply in the following circumstances.

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  If an event occurs that forecloses payment from the portion of the trust that is a resource, then such foreclosure is a transfer of resources as of the date when payment is foreclosed. For the definition of foreclosure, see SI 01120.201B.8. in this section.

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  If payment to or for the benefit of another individual is made from the portion of the trust that is a resource, then such payment is a transfer of resources.

In determining the value of the transfer, do not subtract the value of any disbursements made after the date of foreclosure. Additions made by the individual to the foreclosed portion of the trust after the foreclosure date may be new transfers that you must develop separately.

For instructions related to transfers of resources, see SI 01150.100.

• •

  The key to evaluating this provision is that, when the trust makes a payment to a third party for goods or services, the goods or services must be for the primary benefit of the trust beneficiary. You should not read this so strictly as to prevent any collateral benefit to anyone else. For example, if the trust buys a house for the beneficiary to live in, that does not mean that no one else can live there, or if the trust purchases a television, that no one else can watch it. On the other hand, it would violate the sole benefit rule if the trust purchased a car for the beneficiary’s grandchild to take the beneficiary to their doctor’s appointments twice a month, but the grandchild was also driving it to work every day.

• •

  Purchased goods that require registration or titling, for example a car or real property, must be titled or registered in the name of the beneficiary or the trust(ee) unless State law does not permit it. For example, State law may not allow a car to be registered to the beneficiary, or may require a co-owner, if the beneficiary is a minor or an individual without a valid driver’s license. Some State Medicaid agencies may permit a car to be titled in a third party’s name if the trustee holds a lien on the car. A lien guarantees that the trust receives the value of the car if it is sold and prevents the purchase from being considered a transfer of resources.

  NOTE: 

  Even if a person or entity other than the beneficiary or the trust(ee) is listed on the title of the purchased good, it must still be used for the sole benefit of the trust beneficiary.

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  A third-party service provider can be a family member, a non-family member, or a professional services company. The policy is the same for all.

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  Payment for companion services can be a valid expense. For example, perhaps an Alzheimer’s patient cannot be left alone and requires a sitter, or the beneficiary needs someone to drive them to the store and assist them with grocery shopping. Family members may normally do some of these things without compensation, but that does not prohibit the trust from paying for these services. Additionally, some incidental expenses for the companion can be payable. For example, if the trust pays a companion to take the beneficiary to a museum, the trust can pay for the admission of the companion to the museum, as this cost is part of providing the service. For payment of travel expenses for a companion, see SI 01120.201F.3.b. in this section.

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  You should not request evidence of medical training or certification for family members who receive payment to provide care.

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  Do not request income tax information or similar evidence from a service provider to establish a business relationship. If a family member service provider’s income is relevant to the beneficiary’s SSI eligibility or payment amount (for example, their income is part of the beneficiary’s deeming computation as a deemor or ineligible child), request normal evidence of wages per SI 00820.130.

Apply the following instructions in evaluating whether travel expenses are allowable and do not violate the sole-benefit rule:

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  Travel expenses are transportation, lodging, and food.

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  Providing services or assistance necessary due to the trust beneficiary’s age means that the beneficiary is a minor and cannot travel unaccompanied.

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  Absent evidence to the contrary, accept a statement from the trustee that the service or assistance provided is necessary to permit the trust beneficiary to travel. Do not request a physician statement concerning medical necessity. You should not request evidence of medical training or certification for the person accompanying the trust beneficiary.

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  Use a reasonableness test in evaluating the number of people the trust is paying to accompany the beneficiary. For example, it is reasonable for a trust to pay for other individuals, such as parents or caretakers, to accompany a disabled minor child on vacation to provide supervision and assistance. Travel without this support would not be possible. However, it would violate the sole benefit rule if the trust paid for other individuals who are not providing services or assistance necessary for the beneficiary to travel.

The following travel expenses to ensure the safety or medical well-being of the trust beneficiary are allowable and do not violate the sole-benefit rule:

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  Travel for a service provider to oversee the trust beneficiary’s living arrangements when the beneficiary resides in an institution, nursing home, other long-term care facility (for example, group homes and assisted living facilities), or other supported living arrangements.

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  Travel for a trustee, trust advisor named in the trust, or successor to exercise their fiduciary duties or to ensure the well-being of the beneficiary when the beneficiary does not reside in an institution.

These provisions do not apply to a burial trust where:

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  an individual irrevocably contracts with a provider of funeral goods and services for a funeral; and

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  the individual funds the contract by prepaying for the goods and services; and either

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  the funeral provider subsequently places the funds in a trust; or

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  the individual establishes an irrevocable trust, naming the funeral provider as the beneficiary.

These provisions do not apply to a burial trust where:

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  an individual revocably contracts with a provider of funeral goods and services; and

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  the individual subsequently funds the contract by irrevocably assigning ownership of a life insurance policy to the provider; and

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  State law does not prohibit the individual from irrevocably assigning ownership of a life insurance policy to the funeral provider; and

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  the funeral provider subsequently places the life insurance policy in an irrevocable trust.

These transactions constitute a purchase of goods and services by the individual and the establishment of a trust with the funeral provider's funds, not with the funds of the individual.

Evaluate these arrangements under regular resource rules. Specifically, see the burial contract instructions in SI 01130.420 through SI 01130.425. However, if the individual who purchased the funeral was named as the beneficiary of the burial trust that the funeral provider established, and thus retains an equitable interest, see the instructions applicable to third-party trusts in SI 01120.200.

Cash paid directly from the trust to the individual is unearned income. We treat disbursements from the trust to the trust beneficiary’s personal debit card the same as cash disbursements. We count the disbursement as unearned income for the month the disbursement is received or added to the debit card.

If disbursements from the trust to third parties result in the beneficiary’s receiving non-cash items (other than food or shelter), the non-cash items are in-kind income if the items would not be a partially or totally excluded non-liquid resource if retained into the month after the month of receipt. For instructions on receipt of certain non-cash items, see SI 00815.550.

For example, if a trust buys a car for the beneficiary and the beneficiary's spouse already has a car that is excluded for SSI purposes, the second car is income in the month of receipt, since it would not be an excluded resource in the following month.

Food or shelter received as a result of disbursements from a trust to a third party is income in the form of in-kind support and maintenance (ISM) and is valued under the presumed maximum value (PMV) rule. For instructions pertaining to the PMV rule, see SI 00835.300. For rules pertaining to a home, see SI 01120.200F.

Disbursements from the trust that are not cash to the individual or are third-party payments that do not result in the receipt of support and maintenance are not income. Such disbursements may include, but are not limited to, those made for educational expenses, some travel expenses, therapy, medical services not covered by Medicaid, phone bills, recreation, and entertainment (see SI 00815.400).

Disbursements made from the trust to a third party that result in the beneficiary’s receipt of a non-cash item (other than food or shelter) are not income if the non-cash item would become a totally or partially excluded non-liquid resource if retained into the month after the month of receipt. For instructions on receipt of certain non-cash items, see SI 00815.550.

For example, a trust purchases a computer for the beneficiary. Since we would exclude the computer from resources as a household good in the following month, the computer is not income. For instructions on household goods, personal effects, and other personal property, see SI 01130.430.

If a trust pays a credit card bill for the trust beneficiary, whether the individual receives income depends on the list of itemized charges on the bill. If the trust pays for food or shelter items on the bill, we will generally charge the individual with ISM for those items up to the PMV. If the bill includes non-food, non-shelter items, the individual does not receive income as a result of the payment, unless the items received would not be totally or partially excluded non-liquid resources the following month.

EXAMPLE: If the credit card bill includes restaurant charges, payment of those charges results in ISM. If the bill also includes the purchase of clothing, payment for the clothing is not income.

Administrator-managed prepaid cards, such as True Link cards, are a type of restricted debit card that can be customized to block the cardholder’s access to cash, specific merchants, or entire categories of spending. Typically, the trustee is the account owner and administrator, and the trust beneficiary is the cardholder. To evaluate the income and resource implications of trust disbursements to administrator-managed prepaid cards, we must determine who owns the prepaid card account.

If the trustee is the owner of the prepaid card account:

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  Whether the trust beneficiary receives income from trust disbursements depends on the type of purchase reflected in the card statement. Treat purchases in the following manner:

  • •

    If the administrator-managed prepaid card is used to obtain cash, such as at an ATM, the withdrawal counts as unearned income.

  • •

    If the administrator-managed prepaid card pays for food or shelter items, such as charges at a restaurant, the individual will generally be charged with ISM up to the PMV. 

  • •

    If the administrator-managed prepaid card pays for non-food, non-shelter items, such as for clothing at a department store, the individual usually does not receive income unless the item received would not be a totally or partially excluded non-liquid resource the following month.

• •

  The administrator-managed prepaid card is not the trust beneficiary’s resource.

If the trust beneficiary is the owner of the prepaid card account:  

• •

  Count all disbursements from the trust onto the card as unearned income; and

• •

  Count any unspent balance on the card as a resource as of the beginning of the month after funds are loaded onto the card.

Consider gift cards and gift certificates purchased by the trust for the individual’s use to be cash equivalents. If the individual can use a gift card or certificate to buy food or shelter (such as a restaurant, grocery store, or VISA gift card), it is unearned income in the month of receipt. Any unspent balance on the gift card or certificate is a resource beginning the month after the month of receipt. If the store does not sell food or shelter items (such as a flower shop or electronics store), but the card does not have a legally enforceable prohibition on the individual’s selling the card for cash, then it is still unearned income. For general policy on gift cards and gift certificates, see SI 00830.522.

Reimbursements made from the trust to a third party for funds expended on behalf of the trust beneficiary are not income. In addition, reimbursements from the trust to pay a credit card belonging to a third party for purchases made for the trust beneficiary are not income.

Existing income and resource rules apply to items that a trust beneficiary receives from a third party. If a trust beneficiary receives a non-cash item (other than food or shelter), it is in-kind income if the item would not be a partially or totally excluded non-liquid resource if retained into the month after the month of receipt. If a trust beneficiary receives food or shelter, it is income in the form of ISM.

Funds transferred from the trust into an account established by the trust beneficiary under the Achieving a Better Life Experience (ABLE) Act are excluded from income to the trust beneficiary. For treatment of deposits into an ABLE account, see SI 01130.740.

If the trust principal (or a portion of the trust principal) is a resource to the individual, disbursements from the trust principal (or that portion of the principal) to or for the benefit of the individual are not income but conversion of a resource. However, we exclude from income any interest that the countable trust principal earns, per SI 00830.500.

For instructions pertaining to conversion of resources from one form to another, see SI 01110.100.

For instructions on treatment of earnings or additions when the trust principal is a resource, see SI 01120.201J.2. and SI 01120.201J.3. in this section.

In the case of a trust established with the assets of an individual (or their spouse), with respect to the trust (or portion of the trust) that is a resource:

• •

  If a disbursement is made other than to or for the benefit of the individual, consider such a disbursement a transfer of resources as of the date of the payment. For instructions on transfer of resources, see SI 01150.110.

• •

  If no disbursement could be made to the individual under any circumstances, consider the foreclosure of payment a transfer of resources as of the date of the foreclosure.

For a definition of “to or for the benefit of,” see SI 01120.201F.2. in this section.

Trust earnings are not income to an SSI applicant or recipient who is a trust beneficiary unless the trust directs, or the trustee makes, payment to the beneficiary.

Trust earnings are not income to the trustee or grantor unless designated as belonging to the trustee or grantor under the terms of the trust, for instance, as fees payable to the trustee or interest payable to the grantor.

Additions to the trust principal made directly to the trust are not income to the grantor, trustee, or beneficiary. Exceptions to this rule are noted in SI 01120.201J.1.c. and SI 01120.201J.1.d. in this section.

Certain payments are not assignable by law and, therefore, are income to the individual entitled or eligible to receive the payments under regular SSI income rules, unless an exclusion applies (e.g., SSI payments do not count as unearned income). Although a trust may be structured such that it appears that non-assignable payments are made directly into the trust, non-assignable payments may not be made directly into a trust to avoid income counting or for any other reason.

Important examples of non-assignable payments include:

• •

  Temporary Assistance for Needy Families (TANF);

• •

  Railroad Retirement Board-administered pensions;

• •

  Veterans' pensions and assistance;

• •

  Federal employee retirement payments (CSRS, FERS) administered by the Office of Personnel Management;

• •

  Social Security Title II and SSI payments; and

• •

  Private pensions under the Employee Retirement Income Security Act (ERISA) (29 U.S.C.A. § 1056(d)).

A legally assignable payment that is assigned to a trust or trustee is income for SSI purposes, to the individual entitled or eligible to receive the payment, unless an SSI income exclusion applies or the assignment is irrevocable. We consider assignment of payment by court orders to be irrevocable. For example, child support or alimony payments paid directly to a trust or trustee because of a court order are considered irrevocably assigned and thus not income. Also, U.S. Military Survivor Benefit Plan (SBP) payments assigned to a special needs trust are not income because the assignment of an SPB annuity is irrevocable. For more information on SPB annuities, see SI 01120.201J.1.e.

For non-assignable payments, see SI 01120.201J.1.c. in this section.

The Howard P. “Buck” McKeon National Defense Authorization Act for Fiscal Year 2015 gives military members and retirees the option to irrevocably direct payment of a Survivor Benefit Plan (SBP) annuity for a dependent child to a special needs trust for the benefit of a disabled child. Since the SBP annuity is irrevocably assigned to the special needs trust, the monthly annuity payments are not income to the trust beneficiary. Accept an assignment made in accordance with the applicable policies of the Department of Defense. For more information on special needs trusts, see SI 01120.203, and for more information on assignment of income, see SI 01120.201J.1.d. in this section.

Any earnings on and additions to a revocable trust are unearned income to the individual if:

• •

  the trust was established with the assets of the individual;

• •

  the individual is a beneficiary of the trust; and

• •

  the trust is a resource under this section.

For instructions on exclusion of interest income on earnings, see SI 00830.500.

EXCEPTION: If the source of any additions is the individual's resources, the additions are not income but conversion of a resource.

Any earnings on an irrevocable trust are unearned income to the individual in the percentage that they provided the assets that constitute the corpus of the trust.

This is the case if:

• •

  the trust was established with the assets of the individual;

• •

  the individual is a beneficiary of the trust;

• •

  the trust is a resource under this section; and

• •

  circumstances exist under which the trust can make payment from the trust earnings to or for the benefit of the individual.

For example, if the individual's assets constitute 75% of the trust corpus and the trust earns $100 interest in April, $75 of interest is income to the individual if the trust can pay the interest to or for the benefit of the individual. For instructions on exclusion of interest income, see SI 00830.500.

Any additions to an irrevocable trust are unearned income to the individual if:

• •

  the trust was established with the assets of the individual;

• •

  the individual is a beneficiary of the trust;

• •

  the trust is a resource under this section; and

• •

  circumstances exist under which the trust can make payment from the trust additions to or for the benefit of the individual.

EXCEPTION: If the source of the additions to the trust is the individual's other resource, then the additions are not income but conversion of a resource.

Prior to 04/27/18, there were only four instances where you could offer a 90-day amendment period:

• •

  Early Termination Provisions and Trusts (SI 01120.199);

• •

  Sole Benefit Requirement and Third-Party Travel Expenses (SI 01120.201F.2. and SI 01120.201F.3. in this section);

• •

  Pooled Trusts Management Provisions (SI 01120.225); and

• •

  Null and Void Clauses in Trusts Documents (SI 01120.227).

Continue to apply these policies, where applicable.

Effective 04/27/18: If, due to a change in policy, a policy clarification, or the reopening of a prior erroneous trust determination, a trust that was previously determined to be exempt from resource counting under Section 1917(d)(4)(A) or (C) is now determined to be a resource, offer a 90-day amendment period.

Tickle the case for follow up in 90 days. Do not count a previously excepted trust as a resource, and do not impose an overpayment, pending possible amendment within the 90-day period.

We permit each previously excepted trust only one 90-day amendment period. However, you may grant an extension request to the 90-day amendment period for good cause if the recipient requests it and provides evidence that the disqualifying issue cannot be resolved within the 90-day period (for example, if a court must amend the trust and there is a wait to get on the court docket). Document in the file the grant of an extension, the time allowed, and the reason. Tickle the case for follow-up.

If the trust is amended to be policy-compliant within the 90-day period (plus any extension), the trust continues to be excepted from resource counting.

If the trust still fails to meet the policy requirements after the expiration of the 90-day amendment period (plus any extension), begin counting the trust as a resource under normal resource counting rules. The trust principal becomes a countable resource beginning with the later of (1) the date when the policy change or clarification first affects the resource determination or (2) the earliest date as of which the prior determination or decision is reopened and revised.