If an individual’s income is over the limit to qualify for Medicaid long-term care services (including nursing home care), a Qualified Income Trust (QIT) allows an individual to become eligible by placing income into an account each month that the individual needs Medicaid. The QIT involves a written agreement, establishing a special account, and making deposits into the account.

Who needs a Qualified Income Trust?

An individual needs a QIT if their income before any deductions (such as taxes, Medicare or health insurance premiums) is over the income limit to qualify for the ICP, Institutional Hospice, PACE, or the HCBS Waivers.

How do I set up a Qualified Income Trust agreement?

Professional help may be obtained to set up the QIT agreement, but is not required. A QIT agreement must meet specific requirements and be approved by the Department of Children and Families Regional Legal Counsel. A copy of the QIT agreement must be submitted to an eligibility specialist who will forward these documents for review.

What items must be included in the Qualified Income Trust agreement?

The QIT agreement must: (1) be irrevocable (cannot be cancelled), (2) require that the State receive all funds remaining in the trust at the time of the individual’s death (up to the amount of Medicaid benefits paid); (3) consist of the applicant’s income only (do not include or add assets); be signed and dated by the applicant, the applicant’s spouse, or a person who has legal authority to act on the applicant’s behalf.

How does the Qualified Income Trust account work?

After setting up the account, the individual must make deposits into the QIT account every month for as long as Medicaid is needed. This means deposits may be needed before a Medicaid application is approved. As long as income is deposited into the QIT account in the month it is received, it will not be counted. Deposits cannot be made for a past or future month. Any income received back from the trust will be counted as income. If a deposit is not made in any given month, or enough income is not deposited, the individual will be ineligible for Medicaid.

Note: The income placed into a Qualified Income Trust is excluded as income in the eligibility determination but counted in the calculation of the patient responsibility.

How much income must I deposit into the Qualified Income Trust account?

Enough income must be deposited into the QIT account each month so that remaining income is within program standards. It is better to deposit more income than take the chance of depositing too little to qualify for Medicaid.

What happens to the income deposited into the Qualified Income Trust account?

The income deposited and withdrawn is used to calculate an individual’s patient responsibility. If an individual has a patient responsibility, they are responsible for paying that amount. If funds are left in the QIT upon death, it is paid to the State, up to an amount equal to the total Medicaid benefits the State paid on behalf of the individual.

How to pay funds remaining in the QIT to the State?

The QIT trustee or other individual acting on behalf of the individual should contact the long-term care facility to see if any refund for the month of death is due back to the trust. The balance of the QIT as of the date of death, plus any refund from the long-term care facility, must be paid to the State.