Special Needs Trusts (SNT’s) and Section 8 Housing Eligibility

By Melissa A. Levine-Piro, Esq.

As a law firm, Levine-Piro Law does extensive estate planning for our clients, including the drafting of Special Needs Trusts (SNT’s). A Special Needs Trusts is a carefully drafted trust that allows someone with special needs (the beneficiary) to receive disbursements from the trust without jeopardizing their public benefits, specifically Social Security and Medicaid. Many people with special needs are in Section 8 housing, which is short for Section 8 of the Housing Act of 1937. This Act provides rental housing assistance to landlords so that they can offer low-income housing. To qualify for Section 8 housing, applicants must disclose their income from all sources and meet eligibility requirements.

A recent case presented to the court challenged a housing authority’s decision taht income from a Special Needs Trust counted as income for purposes of Section 8 eligibility.

The Federal Court, in DeCambre v. Brookline Housing Authority (D. Mass., No. 14-13425-WGY, March 25, 2015) said YES and in doing so determined that the beneficiary of a Special Needs Trust in this case was no long eligible for her housing voucher.

Facts of the Case: Kimberly DeCambre was the beneficiary of a special needs trust that was funded with the proceeds from a $330,000 personal injury settlement. Due to extensive injuries, she received Social Security Income and Medicaid and she also received a Section 8 Housing Voucher. The Special Needs Trust was set up to distribute to Ms. DeCambre money for her care and maintence as necessary. Between 2012-2013 the SNT had disbursed over $60,000 to Ms. DeCambre. Because the SNT had disbursed her $60,000, the Brookline Housing Authority who administered the Voucher, informed Ms. DeCambre she was no longer eligible for Section 8. Ms. DeCambre filed suit claiming that the trust disbursements should not be counted as income. The U.S. District Court for Massachusetts ruled that the Brookline Housing Authority properly terminated Ms.DeCamre’s Section 8 Benefits.

If you have a Special Needs Trust drafted for the benefit of a family member or you’re thinking about doing so, make sure you employ the services of an experienced family attorney. Levine-Piro Law offers free 30 minute consultations by phone or in person at our Maynard or Quincy offices.