Public support for children with disabilities are provided by four government benefits programs for children with disabilities before the age of majority and after the age of majority. Children do grow up.  It is possible for a special needs child to receive all four benefits at the same time.  There a both means based tests and non-means based programs.

Supplemental Security Income (SSI) and Medicaid are means based programs. Income is considered.

Social Security Disability Insurance (SSD) and Medicare are non-means based programs which means a family’s income is NOT considered.

SSI Benefits

SSI benfits include food stamps and Medicaid.

Medicaid pays for:

Medical services

Mental health services

Drug therapy

Home services

Institutional services

SSD Benefits

A special needs child who is under age 22 and who is not working can obtain SSDI benefits based on his or her parents’ prior earnings.  Medicare is a form of sponsored health insurance available for the disabled.  SSDI is available to special needs children of an individual who has died, retired or become disabled.

Means Based Aid and Eligibility

Means-based aid is based on financial need.  Financial need can be impacted by multiple factors such as divorce, parties contributing to the support of the child and all sources of income.

Divorce and Means Based: Divorce impacts eligibility and in-kind contributions as opposed to cash support will impact a child’s eligibility for means-based programs.  For children under the age of 18, income and assets held in the parent’s name are relevant to determining whether a child is eligible to receive means-based benefits.

Cash and certain in-kind payments to a custodial parent can reduce a child’s SSI benefit.  Once a child is over the age of 18, assets held in the parents’ name no longer affect the child’s eligibility for means-based benefits.  Assets held by the adult child in excess of $2,000 will disqualify him or her from SSI.

Cash child support paid to the custodial parent will result in a dollar for dollar loss of SSI.  Cash child support paid to the custodial parent has the potential to disqualify the adult child from Medicaid at age 18.  Cash child support paid to the custodial parent has the potential to disqualify the adult child from Medicare at age 20.

Special Educational Services

Special educational services may be mandated by federal or state law and provided to a family at no cost.  If a school system does not pay for all costs in connection with special education, parents must address how such out-of-pocket educational expenses will be paid for in the divorce agreement or parenting plan.

Tuition, evaluations, tutoring, consultation fees and other expenses must be contemplated.  The need for vocational, social, and adult living skills training, as well as the potential need for custodial care or guardianship, should also be discussed by divorcing parents in anticipation of the child’s needs as he or she transitions from school age into adulthood and ages out of the educational system.

Special Needs Trusts

Twenty-nine states have enacted legislation that requires parental support for special needs children to continue past the age of majority.1  Special needs trusts enable disabled persons to have an unlimited amount of assets set aside for their needs without disqualifying them from government benefits.

Retirement plans, life insurance or other financial accounts, as well as lifetime gifts, can be directed to a special needs trust. Assets that flow directly to a disabled individual, e.g., if a parent dies intestate, could put eligibility for government benefits at risk.  A trust for a special needs child created during the divorce process or in estate plans can be crucial in protecting assets and providing for public benefits for the special needs child.

Funding and managing the trust so that the child’s eligibility for public benefits is not impaired can be a crucial focus on component of the trust.