Special Needs Planning is one of the best decisions you can make as a parent. For a physically challenged child, planning plays an important role in the daily living of the person. Planning also comes in handy when primary care providers like the SSI survivor benefits can no longer meet their obligations adequately.
The future care of a child with special needs is an issue to discuss now. As the law stipulates, anyone above the age of 18 is no longer under the care of his or her parent. This poses a great challenge for children who may have special needs even after they legally become adults. Parents can remedy this through proper planning.
Challenges of Estate Planning
For parents with physically challenged children, estate planning involves various challenges. For instance, the parent has to decide between leaving funds for the benefit of a child with special needs and losing important public support such as the SSI survivor benefits.
It’s also difficult to ensure that the funds for the special needs child will be well managed. Importantly, one might not have enough money in the future to meet the needs of a physically challenged child. In most cases, parents of children with special needs simply leave their estates to their other children with no special needs. Many parents do this in the hope that the other children will take care of the sibling with special needs.
However, this approach should be discouraged for several reasons. For example, state programs such as the SSI survivor benefits are usually inadequate. They need other resources to boost them. Additionally, such programs and individual circumstances may change over time. What works today might not work tomorrow for the same person. Leaving a person with special needs under the care of siblings may also strain relations between them.
The Supplemental Security Income (SSI)
The Supplemental Security Income (SSI) is a federal program created in 1972 to provide monthly cash assistance to the elderly or physically challenged people with little income and few assets. The program operates under the Social Security Administration (SSA). In December 2020, 8 million people received SSI benefits.
The vast majority of SSI beneficiaries (86 percent) are people with a severe disability such as blindness. About 1.1 million of those recipients are children. The following are some of the basic facts about the program.
Recipients must be physically challenged with few assets
SSI beneficiaries must have no more than $2000 in assets for individuals and $3000 for couples. There may be certain exceptions. Since they typically have no other source of income, most beneficiaries get $794 for individuals and $1,191 for couples.
SSA reserves the right to reduce amounts
The SSA reserves the right to reduce the benefit amounts for recipients who have other sources of income or live in a Medicaid facility. The agency also deducts any amount from sources such as pensions, social security benefits, interest, or child support from SSI benefits. With such deductions, the average SSI monthly benefit was reduced to $580 in December 2020.
Strict eligibility
SSI has a strict eligibility process. All beneficiaries must meet the strict financial criteria required by SSI. For disability benefits, applicants must meet the same rigorous medical criteria that apply to Social Security Disability Insurance. SSI often rejects most of the applications for disability benefits.
Automatic eligibility for Medicaid
In most states, SSI beneficiaries are automatically eligible for Medicaid, which caters to long-term support and services. Medicaid supports home as well as community-based services including personal and attendant care services to help people with special needs live in their homes and communities.
SSA determines medically eligible applicants
SSA rejects applications of technically disqualified applicants, mainly because they have some assets or income above the limits for eligibility. SSA sends the rest of the qualified applicants to state disability services (DDS) for medical assessment. Among the US territories, only Northern Mariana Islands residents get SSI benefits.
A Better Way to Plan for Special Needs Children
Considering the challenges that come with individual planning and state programs, the better way to plan for special needs children is to set up a Special Needs Trust. This may help manage funds for someone who might not be able to do it himself or herself due to physical impairment or other special needs.
At Serenitas Special Needs Planning, we provide peace of mind through comprehensive planning for special needs and disabled children. Schedule your complimentary consultation today.
