On April 30, 2018, SSA updated its employee policy manual to permit special needs trusts to pay travel expenses of people other than trust beneficiaries, when the trust beneficiary is unable to travel by him- or herself. This change is a major loosening of restrictions on special needs trusts serving persons receiving Supplemental Security Income (SSI), a monthly cash stipend recipients use to pay food and shelter expenses.
Under prior guidelines, travel expenses for non-beneficiaries only were allowed: 1) when necessary in order for the trust beneficiary to travel for the purpose of obtaining medical treatment; or 2) when the trust beneficiary was living in a long-term care facility, and the travel was for the purpose of ensuring the beneficiary’s safety or medical well-being. Payments made in violation of the policy were considered transfers of resources by the trust beneficiary, which resulted in the beneficiary’s being temporarily ineligible for SSI. This restrictive policy often limited the ability of trust beneficiaries to travel at all. Beneficiaries who were unable to travel independently had to ask their caregivers to pay their own travel expenses; if a caregiver couldn’t afford to pay his or her own travel costs, the trust beneficiary often couldn’t go, since the beneficiary needed the caregiver’s help.
SSA’s new guidelines adopt a more common-sense approach, allowing payment of non-beneficiary travel costs when a caregiver’s assistance is necessary for the beneficiary to travel. This applies regardless of whether the trust beneficiary is traveling to obtain medical care or for another reason, such as recreation. During travel, the caregiver must provide the trust beneficiary services or assistance necessary due to the beneficiary’s medical condition, disability, or minority. The trust is permitted to pay caregiver travel costs for transportation, lodging, and food. In situations where more than one caregiver may be required in order to provide adequate support, SSA field offices are instructed to use a reasonableness test when evaluating the number of people accompanying the beneficiary.
Does this change mean that special needs trust trustees should rubber-stamp disbursement requests including non-beneficiary travel costs? No. Trustees of special needs trusts have a duty to ensure that trust funds are used appropriately and for the benefit of the trust beneficiary. Before approving a travel request, a trustee should satisfy itself that:
• Travel is reasonable considering the beneficiary’s circumstances. For example, if the beneficiary depends upon the trust for day-to-day living expenses and trust funds are running out, conserving trust funds might be a higher priority than recreational travel.
• The trip is appropriate for the beneficiary. Planned travel and accommodations should suit the beneficiary’s physical condition, abilities, and interests.
• Parents are meeting their duty of support. In cases where there is no special needs trust, parents of minors routinely pay the costs of their own and their child’s travel. Parents should offer a compelling reason if they are asking a child’s special needs trust to assume these costs.
• The companion’s services and assistance are necessary due to the trust beneficiary’s medical condition, disability, or minority.
Trustees also probably will more readily approve trips with destinations and amenities that typical Americans could afford. Movies stars and tycoons might fly first-class to Paris to for a weekend getaway, but that lifestyle is out of reach for the rest of us. It likely would be inappropriate for a person receiving public benefits to use special needs trust funds in order to live (or travel) like the ultra-rich. However, some amenities might be appropriate because of a beneficiary’s special needs. Trustees should evaluate each request on a case-by-case basis.
SSA’s new guidelines benefit special needs trust beneficiaries receiving SSI who couldn’t travel without help. Trustees now are able to pay a caregiver’s travel costs when the caregiver’s help is necessary to allow the trust beneficiary to travel. What great news, just in time for summer travel plans!