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Issue Alert - 05-01-04

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Jan 03, 2005

Issue Summary:

Money deposited into a special Educational Savings Plan account (529 college savings plan) are not countable assets. PEM 400.

Persons Affected:

Individuals disqualified from receiving FIP, SDA or LIF Medicaid because of savings in a 529 college savings plan.

For More Information:

Michigan Poverty Law Program 611 Church Street, Suite 4A Ann Arbor, MI 48104-3000(734) 998-6100(734) 998-9125 Fax


FIP, State Disability, LIF Medicaid

What's Happening?

Effective January 1, 2005, disregard funds on deposit in a 529 college savings plan, interest earned on a 529 plan, and any matching funds deposited in a 529 plan.This new policy is found in Program Eligibility Manual (PEM) Item 400 (see section called "Education and Training Exclusion" and is discussed in program policy bulletin (PPB) 2005-001. ( FIA’s PPBs and Manuals are available online at ( or by using the “Quick Link” at and FAP do not have asset limits so that 529 funds should never have affected a recipient's eligibility for these programs. See PEM Item 400b - "Programs with no asset test"

What Should Advocates Do?

1. Be sure that individuals who were denied FIP, SDA or LIF Medicaid due to the old policy re-apply. 2. Share this information with organizations working with families trying to save money for their children’s college education.

What Should Clients Do?

Re-apply for FIP, SDA or LIF Medicaid if you were denied FIP, SDA or LIF Medicaid due to the old policy

Finding Help

Most legal aid and legal services offices handle these types of cases, and they do not charge a fee. You can locate the "free" legal services or legal aid office that serves your county on the Michigan LawHelp web site ( or look in the yellow pages under "attorneys" or call the toll-free lawyer referral number, (800) 968-0738.