Qualified income trust agreement form

Qualified Income Trusts (QITs) were established by the Omnibus Budget Reconciliation Act of 1993 and found in the Social Security Act at Section 1917 (d)(4)(B). (42 U.S.C. § 1396p(d)(4)(B)). The State of New Jersey adopted the use of QITs effective December 2014.

When an individual's monthly income above 300% of the Federal Benefit Rate (FBR) is placed in a QIT, it is not counted when determining Medicaid financial eligibility. Applicants that may consider using a QIT must be in need of an institutional level of care and can be living in a nursing facility, an assisted living facility or in their home. Costs of care vary according to these living arrangements.

QITs must meet certain conditions such as:

• They must contain only income of the individual;
• They must not contain resources such as income from the sale of real or personal property or money from a savings account;
• They must be irrevocable;
• They must have a trustee to manage administration of the Trust and expenditures from the Trust as set forth in federal and state law;
• New Jersey must be the first beneficiary of all remaining funds up to the amount paid for Medicaid benefits upon the death of the Medicaid recipient; and,
• Income deposited in the QIT can only be used for the specific Post-eligibility Treatment of Income and to pay for the approved cost of care.

The use of QITs will replace the Medically Needy eligibility program used for nursing facilities. Individuals receiving benefits through the Medically Needy program prior to the QIT effective date will be grandfathered. It is important to note that Medicaid eligibility resource limits will be $2,000 for an individual.

The Division of Medical Assistance and Health Services provides a QITdocument and Frequently Asked Questions (FAQs) that may be used by individuals to assist them with the establishment of a QIT.

All QITs established for Medicaid recipients must be initially approved by the eligibility determining agency and will be reviewed annually.

Any funds remaining, after payments are made under the Post-eligibility Treatment of Income, must stay in the QIT bank account and the individual may be subject to transfer penalties at redetermination. Estate recovery rules still apply.

For questions regarding QITs, contact:

DMAHS Office of Legal and Regulatory Affairs
Beneficiary Administrative Action Unit, QIT Unit
MC 5
PO Box 712
Trenton, NJ 08625
609-588-3075

Note that questions about PR forms must be directed to the County Welfare Agency.