Can a SNT Pay for Housing?
We get this question a lot: Can a special needs trust pay for my loved one’s housing? Of course, the answer is: It depends. Special needs trusts provide financial support for those with disabilities without impacting their eligibility for public benefits like Supplemental Security Income (SSI) and Medicaid. Here are the guidelines and tips to keep in mind when using a special needs trust to pay for qualified expenses.
What Can a Special Needs Trust Pay For?
Generally speaking, a special needs trust allows the trustee to use the funds to benefit the special needs beneficiary. Specifically, funds can be used for
Caregiving services
Assistive technology
Education, including specialized training
Medical, dental, or other sorts of care not covered by Medicaid
Transportation, which includes primary vehicle maintenance
Recreation and entertainment
Travel expenses
Electronic equipment
Home furnishings
Insurance
Financial management
Legal counsel
Notice that “housing” is not included in the list above. Why? Because: It depends on what is meant by “housing.”
Housing Expenses and Special Needs Trusts
Generally speaking, the answer is yes. A special needs trust can pay for housing. But it’s important to keep in mind that payments for housing expenses can reduce SSI benefits. But: If the trust pays for rent, mortgage, utilities or property taxes, these payments are considered to be what is called “in-kind support and maintenance” (ISM). The Social Security Administration counts ISM as income, and reduces SSI benefits accordingly.
Paying Rent with a Special Needs Trust
If a trustee uses special needs trust funds to pay the beneficiary’s rent, SSI benefits can be reduced by up to one-third of the Federal Benefit Rate (FBR), plus $20. For 2026, the Federal Benefit Rate for SSI is $994 per month for an individual and $1,491 for a married couple. Receiving ISM can reduce an individual’s SSI payment by as much as $351.33 (($994 × 33%) + $20 = $351.33). Despite this reduction, some individuals choose to go this route because the trust supports housing that they couldn’t otherwise afford.
Owning a Home with a Special Needs Trust
In some cases, families will choose to title a home under a special needs trust. SSI and Medicaid recipients to own their own home, which does not qualify as an “asset” and jeopardize benefits eligibility. However, rules surrounding limits on the value of a home vary state by state.
If a trust or family purchases a home for an SSI recipient, this is considered to be ISM, but only for the month of the purchase. This means an individual would lose about $351.33 of their benefits for one month. However, if the beneficiary was earning less than $351.33 in SSI benefits prior to the home purchase, and an in-kind mortgage payment reduces that monthly benefit to zero, the loss of public benefits could be permanent.
Home Maintenance and Special Needs Trusts
As anyone knows, one of the joys of homeownership is maintenance. Paying for many household expenses with a special needs trust can count against an individual’s monthly benefit, whether they own the home they live in or not. Expenses like home furnishings or home improvements such as an elevator or ramp installation for the benefit of the beneficiary are not considered ISM. Using SNT funds to pay for condo association or HOA expenses, property taxes, and utilities is not permitted.
Working with an Attorney is Crucial
Families and individuals who have questions about what their special needs trust can and can’t pay for should consult a qualified special needs planning attorney. It’s important to review with them the purpose of the trust and what is permitted.
