Fees For Services
by
Herbert D. Hinkle, Esq.
Hinkle & Fingles, Attorneys at Law
2651 Main Street
Lawrenceville, New Jersey 08648
(609) 896-4200 or (215) 860-2100
The New Jersey Division of Developmental Disabilities currently
requires residential clients to contribute a minimum of 50% of their
Social Security benefits and other unearned income, and 30% of their
wages starting January 1, 2005. Now, DDD proposes a number of changes,
the most significant of which will increase the minimum percentage of
Social Security payments and other unearned income collected from 50%
to 75%.
Another important change is that DDD will allow clients to retain more
than 25% of unearned income to pay for guardianship and “extraordinary
needs.” Such needs must relate to excess shelter costs, “unavoidable”
medical costs, replacement costs of personal items destroyed if a
client has destructive behavior, an irrevocable funeral trust and
costs related to moving to an independent living arrangement. It is
unclear if other expenses can constitute “extraordinary need.”
The new program is more favorable regarding the collection of earned
income than the old one. The 30% rate is unchanged and earnings at
rates below minimum wages are exempted. However, the first $85
of wages are exempted along with the next 50% of wages and a second
50% reduction. Only after these deductions occur is the 30%
contribution rate applied. Thus, the real contribution is well below
30% of total wages.
By law, parental income is not subject to collection unless the client
is in a residential program and under age 18 and the parents are under
age 55. After certain set-offs related to family size, 20% of parent
income will be collected. Bear in mind that usually a school district
and not DDD will pay for the residential placement of people under age
22. Provisions related to collections from parents are essentially
unchanged.
Also bear in mind that the resources of the clients residentially
placed are, as before, still subject to collection. Thus, for example,
an inheritance received outside of a special needs trust is subject to
collection. The new program explicitly recognizes that assets within
and income received from a special needs trust are exempt. A companion
article will discuss new rules encouraging special needs trusts.
Overall, the new program will take a larger percentage of social
security benefits, but will allow clients to retain a larger share of
earned income. On its face, it would seem to discriminate against
those whose disabilities are so severe that they are unable to work.
How the program will actually affect clients, and whether it leads to
an overall increase in services, as DDD hopes, remains to be seen.
______
Herbert D.
Hinkle, his partner, Ira M. Fingles and their colleague, S. Paul
Prior, maintain a statewide
law practice with offices in Lawrenceville, Marlton, and Florham Park,
New Jersey, and Yardley, Pennsylvania. They lecture and write frequently
on topics of law, aging, disability and estate planning and are available
to speak to groups in New Jersey and Pennsylvania
at no charge.
Comments and suggestions
for future articles should be mailed to: Hinkle & Fingles, 2651 Main Street, Suite A, Lawrenceville, New Jersey 08648-1012.
Copyright 2004
Herbert D. Hinkle. All rights reserved.
