Updated August 27, 2026. Quick answer: South Dakota’s Medicaid income trust runs the money in a full circle, and the rule caps the return leg: the trustee must pay the beneficiary the amount paid in, but “the amount paid to the beneficiary may not exceed 300 percent of the maximum SSI standard benefit amount when added to the beneficiary’s other monthly income not paid into the trust”. Whatever is left goes to the facility.
What South Dakota requires
| What the state sets out | What it says |
|---|---|
| South Dakota’s name for it | Medicaid income trust (ARSD 67:46:05:33.01) |
| What it is | A Medicaid income trust is a nontestamentary trust or a similar legal device established after August 10, 1993, for the sole benefit of the beneficiary. |
| What may fund it | It is composed only of the beneficiary’s own pension, social security, or other income |
| The cap on what comes back to you | “the amount paid to the beneficiary may not exceed 300 percent of the maximum SSI standard benefit amount when added to the beneficiary’s other monthly income not paid into the trust” |
| Where the remainder goes | “It requires the trustee to pay monthly to the nursing facility, HCBS, or HCBWS provider the amount of income remaining in the trust to reduce the payment amount needed from the department.” |
How it works in practice
- The 300% cap is on the payment back to you, not on eligibility. It is what stops the trust from simply recycling income and leaving the beneficiary above the limit again.
- The trustee has no discretion in the return leg. The rule requires payment “without option or discretion” each month, which is a drafting instruction as much as an administrative one.
- The remainder is directed, not left to judgment: it goes monthly to the nursing facility, HCBS or HCBWS provider “to reduce the payment amount needed from the department”.
The mechanism itself — why an income cap exists and what the trust must contain — is explained on the income-cap and Miller trust page. This page is the record for South Dakota.
What this page does not settle
- August 10, 1993 is the dividing line. The rule governs trusts established after it; anything older is analysed under different provisions.
- This page reads one source: Administrative Rules of South Dakota 67:46:05:33.01, Medicaid income trust. It is the state’s own publication on this rule, but no state puts its whole treatment of excess income in a single document, and a detail that decides your case may sit in one this page did not read.
- A trust fixes an income problem and nothing else. The asset test, the level-of-care test and the transfer-of-assets look-back are separate hurdles, each decided on your own file, and meeting this rule does not clear any of them.
- Every quotation here was read against the source on August 27, 2026. States revise these rules, and a figure or a section number can move without the page around it changing. Open the source before you rely on a detail.
Eligibility is decided by the state agency on the whole file, not by one rule on one page. Nothing here is legal advice, and no one should move, retitle or assign income on the strength of a web page.
Sources
The source above was retrieved and read against the state text on August 27, 2026. Every quotation on this page was checked against those bytes.
Related: South Dakota’s Medicaid Personal Needs Allowance; the amount a nursing-facility resident keeps from their own income each month.
Related: South Dakota’s Medicaid home equity limit for a single applicant with no spouse or dependent child at home.