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Question: I have several clients who have children with special needs. What government resources are available to help these families?
Answer: For the most part, government resources fall into one of two categories: (1) needs based or (2) non-needs based. We will discuss them both, but keep in mind that a major focus of special needs planning is making sure that eligibility for needs-based resources is maintained. The discussion that follows is not intended to include all of the available programs. There are a number of nonprofit organizations that provide significant funding that will not be discussed here. Also, programs that involve state funding will vary from state to state. Advisors and family members of a child with special needs must be familiar with the specific programs in their resident state in order to ensure that all benefits are received.
Disability under Social Security. The Social Security Administration (SSA) administers two programs that provide benefits based on disability: The Social Security Disability Insurance (SSDI) program (title II of the Social Security Act) and the Supplementary Security Income (SSI) program (title XVI of the Social Security Act).
SSDI Title II provides for payment of benefits to disabled individuals who are “insured” under the Act based on their contributions to Social Security made while working, as well as to certain disabled dependents of insured individuals. Title XVI provides Supplementary Security Income payments to individuals – including children under age 18 – who are disabled and have limited income and resources. We will look at this program first.
Supplemental Security Income (SSI) Title XVI. This needs-based Social Security program provides financial aid to the elderly, blind and disabled who are unable to obtain substantial gainful employment because of mental or physical impairments and have limited income and resources. The impairment must be medically proven and result in marked and severe functional limitations, and must be expected to result in death or have lasted, or can be expected to last, for a continuous period of at least 12 months. The maximum benefit for 2009 is $674 a month. There are a number of factors that are taken into consideration in arriving at the level of financial assistance given to an individual. They include the person’s marital status, living arrangements, and income.
Because SSI is needs based, it is reduced by income from other sources. Therefore, it is a very important financial asset and eligibility for the program needs to be protected through special needs planning.
For an unmarried child under age 18 living at home with parents who don’t receive SSI benefits, a portion of the parents’ income and resources may be considered as if they were available to the child. This is known as “deemed income.” Deductions from deemed income are made for the parents and for other children living at home. After those deductions are subtracted, the remaining amount is used to determine whether the child meets the SSI income and resource requirements to be eligible for a monthly benefit.
In addition to an income ceiling for qualifying for SSI, there is also an asset ceiling. Benefits are denied if the disabled person owns countable assets with a value in excess of $2,000. With some qualifications, the individual may own a home of any value as long as he/she resides in it. Household and personal effects, as well as an automobile, may be owned without a loss of benefits.
SSI is a federal benefit that applies to most states. Some states elected out of the federal SSI system and agreed to provide a greater benefit. These states are known as 209B states. Families and their advisors must look to the rules for those specific states. A list of those states can be found on the Social Security website.
Some states working under the federal SSI system provide an optional state supplement. These supplements also follow the qualifications for SSI. Qualifying for SSI automatically also entitles the person to Medicaid benefits.”