The Income Tax Guide include the following topics and more;

Highlights of Tax Changes
Charitable Contributions
Deductions For Itemizers
Volunteer Activities
Convention Delegates
Clothing and Household Items
Medical Expense Deductions
Special Schools and Training For Children
Medicine, Drugs & Vitamins
Sheltered Workshop Costs
Transportation
Special Equipment
Lifetime Care
Payments for Visual Aids
Expenses For Patterning Exercises
Wages For Nursing Services
Special Telephone
Close-Captioned T.V.
Removing Lead-Based Paint
Disposable Diapers
Group Home Or Other Community Settings Expenses
Special Foods & Beverages
Legal Fees
Medical Conference Expenses
Supplemental Security Income (SSI)
Independent Living Services, or “Adult Home Help” or “Chore Services “
Family Support Subsidy
Disability-Related Tax Credits
Sheltered Workshop
School Income Deductions For “Impairment Related Work Expenses”
Adoption Expenses Credit
Appeal Rights

Who is Eligible?

The individual needing services must have MEDICAID eligibility, require home help personal care, and must be living in an unlicensed setting.

What Services are Available?

* (A copy of the “Definitions & Rankings” of each ADL and IADL and a more detailed explanation of the AHHS program is available by calling The Arc of Oakland County office at: 248-816-1900)

Activities of Daily Living (ADL) such as Eating and feeding, Toileting, Bathing, Grooming, Dressing, Transferring and Mobility. Exceptions to these seven ADL’s are possible only for those with “complex care needs.” The local DHS office is not allowed to grant any exceptions.  An appeal must be made through your local DHS Adult Services Worker to the Michigan Department of Community Health’s Long-Term Care Systems Development Section in Lansing, Michigan.

Instrumental Activities of Daily Living (IADL)

A. Taking medication.

B.  Meal preparation and clean-up [maximum 25 hours allowed each month].

C.  Shopping and for food and other necessities of daily living [maximum 5 hours allowed each month].

D.  Laundry [maximum 7 hours allowed each month].

E.  Housework [maximum 6 hours allowed each month].

What Adult Home Health Care does NOT Include

Supervision, teaching or therapy.

Medical services.

Professional contracting or repair services that require services be performed by a certified or licensed provider (i.e., an electrical wiring repair, which requires an electrician).

Public transportation (e.g., buses, cabs, subways, etc.).

Transporting for medical reasons (e.g., visits to doctors, pharmacies, hospitals).

Activities normally performed by other members of the residential unit or family without charge.

Services provided to persons other than the client. If a provider performs activities for other persons, AHHS may be authorized only for that portion of the service time and cost that is attributable to services rendered specifically to, or for, the client (e.g., meal preparation, shopping, and/or general household cleaning).

Who Provides These Services ?

Individuals choose their own providers from available persons, or public or private agencies. All providers must meet minimum qualification requirements and complete a monthly listing of services rendered to the client. Providers cannot be a ”Responsible Relative,” that is, a spouse or dependent child under the age of 18.

How Much is Paid for These Services ?

Based on an evaluation of specific services needed, time required, and special circumstances, payment is negotiated between the client and provider. The AHHS “maximum” benefit that a local DHS worker can agree to is $549 or less; the local office DHS supervisor can authorize $1299 or less; all amounts in excess of $1300 must be approved through the DHS main office in Lansing.

Home Help payment rates vary by county – Medical Services Administration Bulletin 09-59 dated, 12/31/2009.  The most recent rates are effective 11/1/2009.  (see download below for more information on rates)

The possibility exists to receive the higher payment level of AHHS, but only in very special cases. This benefit is called an “exception to home help services.” This occurs in all requests that exceed $549 per month. These “exceptions” are essentially for situations where the functional limitations of the person are “so severe” that $549 will not allow for the provision of the necessary assistance to maintain someone in his/her own home. In other words, the person’s care requirements far exceed the regular, normal levels. Again, this higher payment level is not for general nursing services or supervision. Such “exception” claims must be processed by a DHS worker within 45 days of the request. If an exception is denied, there is an administrative law appeals procedure.

How is Payment Made ?

AHHS payment is made jointly to the client and provider and mailed directly to the client. The payment is received the first week after the completion of the previous month following the provision of services.

Are These Benefits Taxable ?

Yes! This is taxable income to all providers of services, even parents. However, parents may not be liable for the FICA (“Social Security Tax”) payments.  Starting with calendar year 2010, IRS form-1099’s will be issued to all entities not receiving a W-2, which would include parents and some agency providers.  A parent may choose to have FICA withheld from the check by notifying their DHS Adult Services worker of this request; the system is not setup to automatically withhold FICA from a parent.How are Services Obtained ?

Application is made through the local county DHS office. A worker contacts the individual, [REMEMBER, the consumer must have already established MEDICAID eligibility], and conducts a thorough client needs assessment using the current 1-5 scale.

Next, the DHS worker develops a services plan jointly with the client, assists with locating providers, and authorizes services as appropriate. Next, the DHS worker develops a service plan jointly with the consumer, assists with locating providers, and authorizes services as appropriate.  A physician certification (form DHS-54A) is required documenting the consumer’s need for services.  Only in an “Expanded Home Help” case involving “complex care” or where the payment will exceed $1300 is there also a review by a registered nurse from the Department of Community Health.

Before applying for AHHS it is suggested that the client or client’s family thoroughly review the ADL/IADL definitions and ranks, along with the worksheet scale. Please note that rankings of “1″ or “2″ will most likely NOT result in any AHHS benefit, since a person in either of those two levels is fairly independent. Keep a diary of daily services provided and also list services that are provided on an irregular basis — as long as such services are covered under the Adult Home Help program.

This advanced planning can prove quite useful when the DHS services worker visits the home to do the “needs assessment.”   If asked, providers should indicate that they expect the minimum established rate in their county for the work they do – - – more if a special skill or task is involved short of a certification or license.

Finally, the DHS worker may ask a family if they would provide or continue to provide services if they were not paid. Families need to know that if they answer in the affirmative (i.e., “Yes”), the DHS probably will not pay for the AHHS even though the client is clearly eligible. So, families who wish to receive compensation for this valuable and important work should tell the DHS worker (if they are asked) that they cannot continue services without compensation.

Home Help Services for Minor Children

The same type of funding is available for children if the following conditions exist:

The child must not qualify for the Children’s Waiver Program.  If a child in need of services is a recipient of SSI or MEDICAID, there is no income test for the responsible relative(s). The child is automatically eligible.

Payment can only be authorized for personal care services, not for supervision.  The child’s condition must be such that care requirements exceed the “age-appropriate” demands that would normally be placed on the parent(s).  An example of this would be: changing diapers for an infant is considered an age-appropriate responsibility of parents, but changing diapers for a 10-year-old with a disability is personal care under this program.

Parents cannot be personal care providers.  Siblings, however, can be providers; also, grandparents, and so on.  If the need for specific Adult Home Help care services is based on the parent’s need to be away from the actual home (e.g., for education and training), then such services can only be authorized during the actual hours that the parent must be away.  Remember, AHHS only pays for hands-on care and NOT for supervision time! 5.There are also provisions covering parents who are physically disabled and unable to care for their child.  Again, only for hands-on care — supervision is NOT a covered service.

The following downloadable PowerPoint presentation is a good primer on this topic area:

 ADULT HOME HELP SERVICES 2010 FINAL

Guardianship

Article discussing Guardianship issues. Once a child reaches the age of majority the parents’ status as guardian terminates automatically by law. This is true for any child including those with mental retardation or other developmental disability. Only through appointment as guardian by a probate court, where a judge declares someone legally incompetent, can this formal legal relationship continue.

Ability to Pay

The privatization of our local mental health system a couple of years ago caused an increasingly stricter enforcement of the Michigan Mental Health Code. Namely, the “ability-to-pay” rules of Chapter 8 of that Code, especially against families with minor children using respite care, in-home staffing, supports coordination, or other mental health related services.

For a more detailed and expanded discussion, explore this website.

Supplemental Security Income

Many adults with a developmental disability are eligible to receive Supplemental Security Income (“SSI”). SSI is a financial assistance program administered by the Social Security Administration to provide monthly payments to the aged, blind, or persons with a disability who have little or no income or resources. It is designed for the provision of basic food, clothing, shelter and limited amounts for personal needs. Anyone who receives SSI is also generally eligible for Medicaid coverage, a joint federal and state health insurance program that provides for essential medical services.

The eligibility criterion for SSI and, correspondingly, Medicaid is quite rigid. For example, the financial eligibility guidelines for SSI benefits require that total financial resources be less that $2,000 for single persons and $3,000 for married recipients. The SSI program also imposes strict limitations on “earned” and “unearned” income that an individual eligible for benefits may receive during any given month.

If someone with a developmental disability has financial assets in excess of the maximum amount allowed, then that person is not eligible to receive the governmental benefits that provide the resources for basic needs. Any income, which includes interest generated from the principal of a trust, as well as in-kind services, that comes directly to the individual or is legally accessible by the person with the disability, will have the effect of reducing the amount of governmental benefits that the individual may be otherwise eligible. Therefore, great care must be taken by the legal professional in drafting estate plan documents for the family with a member who is disabled.

Without a will, SSI eligibility can be terminated

A Last Will and Testament is most definitely a necessity! A will is a legal declaration of how property is to be divided after a person’s death. Clauses within a will may include the appointment of someone to manage such distribution, for naming a guardian of a minor child, or for creating a trust. If a parent(s) dies without a will, property may go directly to a son or daughter with a disability under the “law of intestacy” applicable to the state in which the deceased lived. If a surviving child with a disability is receiving services from a public mental health agency, then such directly-inherited property may be subject to any reimbursement claims made by that entity for the full cost-of-care on an ability-to-pay basis. Additionally, if the person with a disability is receiving SSI, the eligibility may be terminated until the resources have been exhausted below the asset limit. What all of this means is that without a will there is little chance that the true intent of the parents will be carried out.

Disinheritance is not the Answer

Disinheritance, although an unnecessary and emotionally unappealing estate planning alternative, can exclude the person with a developmental disability. The total disinheritance of a loved one with a disability is generally not advisable, because there is always the potential for a legal action in probate known as a “will contest.” Someone acting on behalf of the person with the disability could dispute the validity of the will instrument or the intent of the testator in front of a judge.

A Special Needs Trust is the Key

The use of a well-written Special Needs Trust is the key to proper estate planning. The specific use of this trust technique is to supplement not to supplant governmental benefits. A trust is a legal instrument made by a grantor who places a source of funds at the control of a trustee for the benefit of the individual with a disability (the beneficiary). Under this special arrangement, the beneficiary has not legal right to the principal or to the income that it generates. Hence, this resource is beyond the reach of creditors. A final part to a trust instrument, is the remainderperson, or the individual – (or a fine charity like The Arc of Oakland County!) – who receives what is left of the trust after the beneficiary’s death.

A “Living Trust” has advantages over a “Testamentary Trust”.

A major consideration involves deciding upon what type of trust instrument to use. The “living trust” has certain advantages over the “testamentary trust.” A living trust is a private document that does not require a court to activate or supervise. There is no probate court supervision, which should reduce the necessity for large attorney fees, possible court costs, time and effort by the survivors away from home or employment. The living trust is a flexible instrument where the grantors, while alive, can transfer assets into the trust or take some out. A “testamentary trust,” on the other hand, is written into the text of a will and it comes into existence only after the death of the maker (testator). A will, and its testamentary trust, is probatable and therefore a public document. This method does require court supervision to activate, perhaps the services of an attorney, and an investment of time and effort by the heirs.

A Spendthrift Discretionary Provision in the Trust

The special needs trust technique involves using spendthrift discretionary language. “Spendthrift” because it is for the benefit of someone who cannot handle money due to a disability, and “discretionary” for the special power conferred upon the trustee as to the use of the trust funds. The strongest possible spendthrift provision needs to be written into the trust, which makes it clear that no one (the person with the disability, creditors, the federal, state, county or local government, or anyone else) has any right to, or claim against, the income or principal of the trust fund. Another “must” provision in the trust is that of granting the trustee sole and absolute discretion over expenditures from principal to make it clear that the beneficiary cannot individually access the funds, otherwise compromising governmental benefits.

Legal Title to the parents’ assets should go to the Trust

Generally, an estate plan should almost never be developed where a person with a developmental disability inherits outright assets other than personal property of nominal value. Most persons with a disability should not receive legal title to the parents’ assets primarily for the following reasons: under most state laws, government agencies may take all or most of the assets owned by a person with a disabling condition for the cost of services provided to that person; if a person with a disability owns assets in excess of a very limited amount, there will be a disqualification from receiving SSI and/or Medicaid until the assets have been nearly exhausted; and, many people with mental impairments may not be capable nor have ever received the requisite training for handling personal resources and may be vulnerable to exploitation by opportunists.

Selecting the Trustee

As should be quite evident from the foregoing, selecting an appropriate trustee to implement the trust is of critical importance. The explicit expression of the trustee’s powers, duties and instructions is also essential to the success of this special type of estate plan. The trust language must clearly and accurately reflect parental intent. Under some circumstances a bank may serve as a trustee, however, such institutions typically lack that “personal touch,” and will not handle small-to-modest individual trusts because the administrative fees become prohibitive. Since the use of a corporate trustee for many families is financially out of the question or inappropriate, what or who is left? The choice is to find an individual trustee, a concerned family member, or perhaps a nonprofit organization to fulfill this role.

An obvious conclusion at this point is that a trustee for an individual with a developmental disability has a unique and vital role to play. The primary responsibility will be to act as an able assistant, protector and advocate, for the beneficiary. The trustee must first know that individual well and consequently recognize all wants and desires, and then make certain that those needs are being met. If personal needs can be obtained by or through a public program (e.g., education, vocational rehabilitation and training, sheltered or supportive employment, counseling, or residential placement options), then the trustee should advocate to secure such programs. The trustee must commit to “doing the right thing.”

Funding a Trust

Trusts may be funded in a variety of ways. This may be a big concern, especially if parents have not accumulated a great deal of wealth over their lifetimes. Some examples of possible assets to fund trusts are: cash, life insurance, annuities, proceeds from the sale of the family homestead, or any other financial mechanism that will secure a better future for their child.

The Importance of Planning

In the end, is the development of an appropriate estate plan enough to answer the question of what happens to a son or daughter after the death of the parents? The answer to this question is “no, not by itself.” A trust instrument has certain limitations. However, the quality of life for a person with mental retardation and/or other developmental disability is greatly dependent upon many variables beyond the control of any one individual. The list includes: the quality of special education, available and appropriate adult education classes, sheltered or vocational positions, “regular” employment, appropriate living alternatives, adequate resources provided by the state legislature through local public mental health agencies, availability of social and leisure opportunities, or access to advocacy services. No legal document could be developed to guarantee that these or any other resources would be available to the beneficiary with a disability. So, proper planning is always of paramount importance.

* The payment of the state supplement to SSI is sent on a QUARTERLY basis by the Michigan government to recipients at the “Household of Another” rates. Benefit payment checks are mailed during the months of: March, June, September and December. Also note that for persons receiving ONLY an SSI supplement amount due to the presence of Social Security Disability benefits and/or earned income, the state supplement will NOT be paid! Affected individuals must now apply separately for Medicaid at a local Department of Human Services (“DHS”) office.

** ATTENTION!  Governor Granholm released an Executive Order during May 0f 2009 terminating the $14.00 per month (paid quarterly) State of Michigan SSI stipend to those living independently.  This became effective on July 1, 2009.  Relatedly, Medicaid cuts within her Executive Order also include: dental, vision, hearing aids, podiatric, and chiropractic services. 

• The “personal needs income” or “incidental needs allowance” for 2010 remains at $44.00 per month for Adult Foster Care recipients (Personal Care).
• The AFC payment for 2010 remains at $787.50 per month.
• Please note there is an additional State Medicaid Personal Care Supplement check that is paid directly to providers of Adult Foster Care. The amount for 2010 (effective: 10/1/2007) remains at $184.38 per month per resident.
• For concurrent recipients of SSI and SSDI (old age, survivors, widows, disability, disabled adult child) benefits, the total of the two checks will be $20.00 more than SSI alone for the specific living situation.
• The premium for Medicare “Part B” is $110.50 per month for 2010. The SSDI Substantial Gainful Activity (SGA) work earnings ceiling for 2010 increases to $1,000.00 (remains at $1,640.00 if blind). The Trial Work Period threshold for 2010 increases to $720.00.
• The 2010 SSI asset limit remains $2,000.00 for an individual and $3,000.00 for a couple.

SSI 2010 rates PDF Download

All forms listed below added as of:  11/20/2009:

Affidavit

Background Check

Direct Deposit

Respite (and Shared Parenting) Invoice form APR272010 (NEW on 4/27/10)

Respite Provider Agreement 2

W-9

DHS CLearance form 27APR10  (NEW 4/27/10)

NEW!  NEW!  PAY PERIOD SCHEDULE FOR

JANUARY 16, 2010 – NOVEMBER 6, 2010:

2010 PAYROLL Pay Period Schedule