What Is a QIT?

woman pushing husband in wheelchair

A person must have a gross monthly income of no more than $2,382 in order to qualify for Medicaid assistance to pay for long-term care in New Jersey.  If a person has a gross monthly income that is greater than $2,382 then he or she will not be eligible for Medicaid.

The only legal method available in New Jersey to reduce a person’s income below this income cap is through a Qualified Income Trust, also known as a QIT.  Although Congress authorized the use of a QIT through federal legislation passed in 1993, the State of New Jersey prohibited the use of a QIT during the period of 1996 through December 2014.  Since December 1, 2014, residents in New Jersey can use a QIT in order to reduce their income below the income cap to acquire Medicaid assistance.

The first step in establishing the QIT is the trust agreement.  After the trust agreement is signed, an account is then opened at a bank to allow the income to be deposited into the account.  Only income can be deposited into the QIT and the income that is deposited into the QIT will be disregarded for purposes of determining whether that individual satisfies the income requirement for Medicaid.

The QIT must be irrevocable.  The QIT must also indicate that upon the person’s death, any money remaining in the account will be paid to New Jersey first in order to reimburse the government for Medicaid benefits.