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Finley v. City of Santa Monica, Case No. BS127077 (Special Needs Trusts and Income Calculation)

The decision in this case interprets HUD regulations defining annual income for rent setting purposes. The issue was the treatment of distributions from a Special Needs Trust, the corpus of which was a lump sum payment received for a personal injury settlement. (HUD rules generally provide that certain lump sum payments are considered assets and not included in annual income.) The Court found that distributions from a SNT created from a lump sum personal injury settlement are not to be considered as annual income. This treatment is in line with SSI and Medicaid treatment of SNTs and helps people with disabilities maintain their federally-assisted housing at rents they can afford.

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