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Caregivers Plan for the Future with Federation of Organizations’ Financial Management Program

What will happen when I am not around? How can I protect the future of my loved one? These are some of the questions that caregivers ask themselves as they search for reassuring answers. After years of work helping families to prepare for the future of their loved ones, there is one point we cannot emphasize enough: Start now! Learn about available resources and begin to utilize them while you are around to oversee the results so that you can modify your plans accordingly. There is much that can be done to plan for the future and the sooner you begin the better the outcome will be.

Federation of Organizations is a family-based advocacy group, incorporated in 1972, which has grown to a multi-million dollar social welfare agency operating programs in mental health and aging on Long Island and in New York City. Since1992 Federation of Organizations has assisted families to ensure long-term security for their loved ones by providing Financial Management Services and administering trusts that assure continuity of care and responsible use of financial resources.

The program originated to meet the need for Social Security Representative Payee services for individuals who, on the basis of a psychiatric evaluation, were found to be unable to manage their money, often because of problems with substance abuse in addition to serious mental illness. Serving Suffolk County, the program is designed to assure that client funds are spent to maintain basic necessities of life such as food, clothing, and shelter.

The Financial management Program receives Social Security (SSA) and Supplemental Security Income (SSI) payments and all other income on behalf of the client. The financial manager and the client work together to plan monthly expenses and identify spending goals. The program makes payments directly to vendors and distributes the client’s personal needs allowance on an agreed-upon schedule. The financial manager assists the client with budgeting, planning, and saving for the future. We report any changes in the client’s status to the Social Security Administration and ensure that the individual receives all entitlements. An annual expenditure report for each client is submitted to the Social Security Administration.

During the course of operating the Financial Management Program we learned that sometimes clients find themselves with large one-time payments that can be placed in a trust to preserve the money for long-term use without disrupting eligibility for benefits. In the past, without a trust, people were forced to spend down any windfall or inherited income and/or remain ineligible for benefits until the resources were exhausted.

Using a trust makes a big difference. For example, Patrick (not his real name) received a large retroactive SSI payment in the fall of 2008 which would have made him ineligible for Medicaid. He was referred to Federation and learned that he could create a trust that would enable him to use some of the money to achieve one of his long-term goals: owning a car. Although he had a valid driver’s license, he had not driven for some time. He was happy to learn that the Trust could pay for his driving lessons so that he could feel comfortable behind the wheel of a car once again. After careful research with his financial manager Patrick purchased his car in January, 2009.

Often people try their own solutions, leading to major problems. Michael’s (name changed) sole surviving parent died without the benefit of advanced planning. An inheritance made Michael ineligible for SSI benefits and Medicaid coverage. Following the advice of a family friend, Michael invested the money in the stock market. By law, the income was reported to the government, and Michael’s SSI income was eventually stopped. By that time, he owed an SSI overpayment of approximately $20,000. Fortunately, Michael learned of Federation’s Community Trust B which allows disabled individuals to fund a trust account on their own behalf. After repaying his overpayment to SSI and funding the Trust with the balance of his inheritance, Michael re-applied for SSI benefits and was approved. In the last 5 years, Michael been able to use funds in the Trust to purchase a car, pay for auto insurance, purchase furniture for his apartment as well as pay for medical expenses not covered by Medicaid. He remains eligible for SSI and Medicaid and resides in a Section 8 apartment. As Michael says, “I don’t really live any differently, but I feel better knowing the money is available.”

The establishment of a special needs trust is a serious legal matter that requires the assistance of an attorney with expertise in this area. There are several different options and rules change. Decisions are made on the basis of individual need. There is nothing that can replace the peace of mind that caregivers achieve when they know that the future of their loved one has been protected properly. Federation has become expert in administering trusts that ensure the long-term financial future of individuals with serous disabilities.

For more information, e-mail Suzanne McCarthy, Manager, Financial Management Program at: SMcCarthy@fedoforg.org. Barbara Faron, LMSW, CPRP, is Chief Executive Officer of Federation of Organizations.

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