Pooled income trust vs spend-down in New York and NYC

A person needs Medicaid home care, whether through an agency aide or the Consumer Directed Personal Assistance Program, but their monthly income is above the Medicaid limit. Sometimes by a lot, sometimes by a small pension. New York does not simply say no. Its rules give two main paths, and the State Department of Health describes both.

The Department's page on the Medicaid Excess Income program explains it in one sentence: "The amount your income is over the Medicaid level is called excess income. It is like a deductible." If you are otherwise eligible for Medicaid and you can show medical bills equal to your excess income in a given month, Medicaid pays your covered bills beyond that for the rest of the month. The Department specifically includes "long-term care in the community such as home care" among the services this can cover.

Who can use it: the Department says you must be under 21, 65 or older, certified blind or certified disabled, pregnant, or a parent of a child under 21. That covers most people who need home care.

How the amount is set: your caseworker takes your gross monthly income, subtracts the deductions allowed for your category, and compares the result to the monthly Medicaid income limit. The difference is your excess income.

How you meet it each month: you bring, send, or fax paid or unpaid medical bills to the local district (in New York City, HRA) when they add up to at least your excess income. The Department says these can be doctor, dental, clinic, lab, and prescription bills, transportation to appointments, and more, and that past unpaid bills can be used "as long as they are still viable." If you have no bills but need coverage, the Department describes a Pay-In Program: "You can pay your monthly excess income amount for any month to your local department of social services."

What it costs you: in plain terms, the excess amount every month, either as bills you owe or as a pay-in. For someone whose home care is the main expense, the home care itself may be the bill that meets the excess. Ask the district how that works in your case.

The Department of Health's trusts page describes a second path for people who are certified disabled, which for Medicaid purposes includes many older adults once a disability determination is made. A "pooled trust" is one that is "established and managed by a non-profit association," keeps "separate accounts for each person whose assets are included," pools those accounts for investment, is set up by the person, a parent, grandparent, legal guardian, or a court, and includes language that on the person's death, "funds not retained by the non-profit organization will go to the state, up to the amount of Medicaid paid out on behalf of the individual." Pooled trusts, the Department notes, are "created for the benefit of a certified disabled person of any age."

The key sentence for the surplus income question: "Income directly diverted to one of these types of trusts or received and then placed into the trust is not counted as income. Verification that the income was placed into the trust is required."

So instead of owing the excess each month, the person deposits the excess into their pooled trust account, and the district rebudgets their income without it. The Department's page says how to ask for that: "You must provide a copy of the trust to your local social services district. You must include a written statement indicating the amount of monthly income that will be placed into the trust each month."

What the money can do afterward: "Money paid directly to someone for your benefit will not count as income (e.g., food, shelter, telephone bills, education, entertainment, etc.)." Money paid directly to you from the trust does count as income. The non-profit typically charges fees, which vary; this site does not compare them.

Neither path is free, and neither is right for everyone.

• Spend-down keeps your money but requires monthly paperwork and, in months without enough bills, a pay-in or no coverage. It works well for people whose excess is small or whose bills are predictable.
• A pooled trust removes the monthly bill juggling and lets the deposited income pay ordinary living expenses through the trust, but it requires a disability certification, an application to a non-profit, the non-profit's fees, and acceptance that whatever remains at death goes to the non-profit or the State, not to heirs. For people 65 or older, the Department has separate guidance on transfers to pooled trusts; ask the district or a counselor about it rather than assuming.
• Both require the district to rebudget your case. Nothing changes until HRA or the county district has the paperwork.

This site does not recommend a trust, a trustee, a non-profit, or an attorney, and receives nothing from any of them. The estimator on this page is educational: it applies the 2026 income levels and the standard deductions to the numbers you type, inside your own browser, and shows what each path would mean. It does not decide eligibility, it stores nothing, and it does not route you to anyone.