Updated August 7, 2026. Quick answer: in an income-cap state, being one dollar over the limit can disqualify you from Medicaid long-term care entirely — and a qualified income trust, often called a Miller trust, is the federal fix. 🔴 It has a condition most people are not told about until later: the state is repaid from whatever remains when you die.
Why the trust exists at all
States run two different systems. Some let you spend down — high medical costs offset income until you qualify. Others apply a hard ceiling: an applicant may be covered only with income “up to 300 percent of the SSI benefit rate”. 🔴 In a hard-cap state there is no partial credit. A dollar over is a denial, no matter how large the care bill is.
Honest gap: we could not verify the current dollar value of that 300% figure from a primary source we are able to reach, so we are not printing one. The rule is 300% of the SSI benefit rate; ask your state Medicaid agency for this year’s number rather than trusting a figure copied around the internet.
What the trust must look like
The federal exception is narrow and specific. The trust qualifies only if:
the trust is composed only of pension, Social Security, and other income to the individual (and accumulated income in the trust)
⚠️ “Composed only of” is doing real work. Income goes in. Assets do not. A state administering these puts it plainly: the trust “will not be funded with the beneficiary’s resources, nor income or resources of other people.” Putting a savings account into it does not make it a bigger Miller trust — it makes it not a Miller trust.
🔴 The condition that outlives you
The exception is granted in exchange for a payback. As a state administering the programme describes it:
Upon the death of the beneficiary, the State will receive all remaining funds in the trust up to the amount of Medicaid expenditures paid on the individual’s behalf.
This is not estate recovery arriving later. It is written into the trust as the price of using it, and it is why a Miller trust is a qualification tool rather than a planning tool. How the payback interacts with Medicaid estate recovery is the part families most often meet unprepared.
Who can actually help you
⚠️ We should say this plainly: this is elder-law attorney work, and Clear Money Guide does not match people with attorneys. A qualified income trust has to be drafted to a state’s specifications and funded correctly every month; a mistake is a denial in the month it happens. We can tell you what the rule is. We are not the route to getting it done.
Sources
The qualified income trust exception and its funding limitation: 42 U.S.C. §1396p(d)(4)(B). The payback as administered: Indiana FSSA/OMPP provider manual, citing §1396p(d)(4)(B)(ii). The income-cap and spend-down pathways: MACPAC. All read 7 August 2026. General information about how these rules work, not legal advice on your document or your state. Probate law is state law and the details differ; confirm anything decision-critical with a lawyer in your state.