(a) The Social Security Administration is a Federal government agency that administers two major benefit programs. The largest of these programs is the Retirement, Survivors, and Disability Insurance Program (social security). The other is the Supplemental Security Income (SSI) Program.

(b) The social security program protects employees and their families from a loss of earnings because of retirement, death, or disability. Social security benefits are based on the earnings of an employee who has paid into the system by paying Federal Insurance Contributions Act tax for a specified period of time. An employee, or his or her family, can receive social security benefits based on retirement, disability, or death.

(c) The SSI program is a Federal income maintenance program for aged, blind, and disabled persons with little or no income or resources. To receive SSI payments, a person must be age 65 or older, blind or disabled and must have limited income and resources.

(d) The Veterans Administration is a Federal government agency that administers benefit programs for veterans.

(e) The Social Security Administration Representative Payee Payment Program and the Veterans Administration provide assistance to persons who are unable to manage their Federal benefits, permitting payment of the benefits to designated fiduciaries, referred to as “representative payees” by the SSA and as “fiduciaries” by the Veterans Administration, who receive and manage payments on behalf of beneficiaries. Other State and Federal benefit programs may approve similar arrangements to assist beneficiaries who are not capable of handling their own benefits.

(f) In some cases, facility directors who serve as representative payees may receive lump sum retroactive benefits on behalf of a beneficiary; in other cases, facility directors may learn about a windfall payment due to an individual who is receiving services from the facility. In both situations, the payments may, in combination with other resources of the individual, render the individual ineligible for government benefits on which the individual relies or plans to rely upon discharge from the facility. In these cases, a Medicaid exception trust or similar device may provide a mechanism to preserve the assets for the benefit of the individual without rendering the individual ineligible for the needed benefits.

(g) The purpose of this regulation is to implement the provisions of Mental Hygiene Law section 33.07(e) regarding the management and protection of monthly benefits and retroactive awards received by facility directors in the capacity of representative payee; the use of Medicaid exception trusts, including special needs trusts and similar devices; notice to qualified persons as defined by Mental Hygiene Law section 33.16 regarding the intent of a facility director to apply to be an individual’s representative payee; and the appropriate establishment and maintenance of a discharge account for future needs of individuals for whom directors serve as fiduciaries.