If you are a parent of a special needs child, government benefits and legal options are often confusing – even to those who have worked with them before. You know that there are programs out there for your child, but you are not sure where to start. You may wonder what the government provides, what it will cost you and how you are going to sort through all the information. You may have heard of legal decisions you need to make, but you have no idea how to begin, let alone find an attorney who is qualified and who has the compassion to work side by side with you.
Your biggest resource for funding your child’s future may come from government assistance programs. Knowing what assistance your child qualifies for will make a difference in the type of care your child will receive now and in his/her adult years. It is also critical you understand the connection between all the programs and how they can help your child in ways you might not have imagined. We sometimes hear that a family feels they “have enough money” to not worry about the government assistance, so we will also talk about the “golden ticket.”
A special needs planner will serve as a guide, someone with an experienced perspective who can bring clarity to an area that can seem very cloudy to the uninitiated. He/she can also refer you to a benefits department, who will act as your liaison, utilizing their experience to effectively navigate these often choppy waters.
As a general rule, you will want to apply for these programs even if you do not think you will qualify or need them – I will explain why this is the case.
First, let’s break down the types of assistance into four general categories of government benefits that you may want to investigate:
Entitlements – Taxpayers are entitled to Supplemental Security Disability (SSDI) and Social Security Administration (SSA) and Medicare because we bought these benefits by having money taken out of our paychecks throughout our working years.
Needs-Based – Supplemental Security Income (SSI) and Medicaid are available regardless of whether or not you paid into the system. Because these benefits are not purchased, the eligibility requirements are based on your income level and your assets.
Cash – SSDI, SSA and SSI are all programs that provide cash to meet daily living expenses and to supplement any other needs. Each of these programs has its own eligibility requirements.
Goods and Services – These benefits come in the form of medical and residential assistance. These services are vital to your child’s future as an adult. The programs include Medicare and Medicaid.
Now, let’s take a look at each program individually:
Social Security Disability and
Social Security Administration
SSDI is a federal cash benefit that may be available if a person is disabled. It pays benefits to the individual and certain members of the individual’s family if you are “insured” meaning that you worked long enough and paid Social Security taxes. SSDI cash payments are based on how much has been paid into the system and if the individual is substantially and gainfully employed. This is called the “income rule.” SSA pay is your retirement income, which can be taken as early as age 62. It is important that you always save your social security statements for review. You can now obtain a statement on SSA’s website, www.ssa.gov.
Medicare
Medicare is a federal health insurance program for, among others, certain younger people with disabilities. Medicare begins two years after Social Security payments begin. Medicare does not cover everything, and it does not pay the total cost for most services or supplies that are covered. Medicare also does not pay for prescriptions. If you do not also have Medicaid, you might need to purchase a supplemental Medicare plan as well as a Medicare Part D plan for prescriptions.
Supplemental Security Income
Supplemental Security Income (SSI) is a federal income supplement program funded by general tax revenues (not Social Security taxes). Its purpose is to help, again, among others, the disabled who have little or no income. This program is for those who are not entitled to the benefit but need it. This benefit is subject to both the income rule and the asset rule. The current accepted assets that you can have are your house, a car, a prepaid funeral and $2,000. If the person receiving benefits exceeds this by any amount, they are disqualified from receiving benefits. A special needs planner will help you put strategies in place so that your child can qualify for these benefits. SSI currently provides a maximum of $710 per month to be used for basic needs such as food, clothing and shelter. It is generally for people who have little or no work history.
Medicaid
Medicaid provides medical assistance for certain individuals and families with low incomes and resources so it is subject to income and asset rules. It typically goes with SSI. Although the Federal government establishes general guidelines for the program, the Medicaid program requirements are actually established by each state. In addition to paying for some medical services and prescriptions, Medicaid may also pay for residential facilities, workshops and other programs. You can have both health insurance and Medicaid. Medicaid pays for deductibles and co-pays that your health insurance does not cover.
Many families who have high net worth do not think they need to apply for Medicaid benefits because they plan to self-fund any needs that their child may have or they just believe that their income is too high. This thinking is flawed. There are numerous valuable programs, such as residential, recreation and learning opportunities, that are directly tied to the Medicaid application. If you have not applied, and thus put yourself into the government system, your child will not be eligible for these programs. Thus, these government programs are your child’s “golden ticket” to a happier, safer and more fulfilling future no matter what your financial standing may be.
It is important to evaluate your child’s entire picture and take a few more things into consideration:
- Although you may be dealing with a child at this time, what do you see for him/her in the future? Supported employment? Workshop employment? Residential living?
- Does your existing health insurance remain in effect when your child turns 26 and is no longer a full time student? How does ObamaCare affect your child?
- What assets are presently in his/her name? Example: savings bonds, life insurance, stocks, mutual funds, homes, etc.
- Is there a possibility of inheriting any money or assets?
Once you have answered these questions, you can then look at what benefits may be eligible to receive and how to best position his/her assets and income.
Often parents ask, “Is there a way I can leave an inheritance to my child with disabilities without negatively impacting my child’s benefits?” Yes. An individual may set up a Special Needs Trust that will permit this. There are several types of special needs trusts and these trusts require very particular expertise. Remember, when thinking about trusts, it is imperative that you speak with an attorney who has extensive experience and knowledge in the Special Needs Trusts arena.
These issues are often confusing. The important thing is to be patient and do your homework so that you are better prepared for the future.
Let’s say that you think you have this all under control. You have educated yourself about government benefits and you have set up a stand-alone special needs trust. The next questions should be, “How do I fund the future? How much is going to be enough? Yes, government benefit programs are critical, but those pay for basic support. Life is much more than that. What about recreation, extraordinary medical care, the use of a cell phone, transportation costs, vacations, and other items that make life as wonderful as it can be? How much is enough? How much is really needed?”
The task of identifying that number can be time-consuming and feel daunting at times. Parents and family members should think about this just like they think about their own “retirement.” What do you want to see in the future? Build a cash flow that will fund that vision. That process will help you identify the financial need.
As we said in the beginning, it can sometimes feel daunting. But one step at a time is the key to success. Then the progress unfolds before you and peace of mind kind of creeps up on you. Starting with Step One is the most important. And that Step One is just deciding you want to plan for a safe and secure future for your loved one.
Mary Anne Ehlert is the founder and president of Protected Tomorrows, Inc., the leader in enhancing the lives of families with members who have special needs. By guiding families through its comprehensive, proprietary planning process, Protected Tomorrows helps ensure the well-being of a loved one by creating a Future Care PlanTM. For more information, visit www.protectedtomorrows.com, contact info@protectedtomorrows.com or call (847) 522-8086.
