It comes as no surprise that raising a child with special needs comes with its own unique set of financial burdens. To families at the start of this journey, overwhelming is an understatement for the pressure they are under to ensure their loved ones are taken care of. All too often, we speak with families who are engaged with financial advisors who know nothing about what they are going through.

On this journey, more than basic financial planning is required. Instead, a life plan should be created that includes financial planning and considerations and directions regarding all of the benefits that may be available to your loved ones throughout their lifetime. Here are some of those benefits:

Supplemental Security Income

Supplemental Security Income (SSI) is a means-tested benefit that provides a monthly income stream to any qualifying individual. For many of the families we work with, SSI is the most critical benefit to their loved ones with special needs. To qualify for SSI, an individual must be elderly, blind, or disabled. Additionally, SSI recipients must follow strict guidelines surrounding their other types of income earned and assets owned, or else they risk losing their benefits. SSI is a crucial benefit to individuals with special needs, as they will often lack the work experience required to be eligible for Social Security Disability Insurance (SSDI).

The federal maximum monthly benefit that an individual can receive from SSI is $914. On top of this, many states provide SSI recipients with an additional benefit that can increase the monthly payment received to more than the federal maximum. To remain eligible for SSI, recipients are tested for income and assets. For SSI purposes, all types of income are counted, including:

• Earned Income: Wages and earnings from employment
• Unearned Income: Any income received not from wages, some of which are pensions, state disability payments, interest income, and cash gifted from family and friends
• In-Kind Income: Food/shelter provided for free or under market value
• Deemed Income: Earned by parents (for individuals under 18) or a spouse

After considering income from all these sources, a calculation is performed using the income and certain allowable exclusions/deductions, resulting in countable income. Countable income is then subtracted from the maximum monthly benefit to determine the amount of benefit entitled to a recipient.

On the asset side of things, eligible recipients can have up to $2,000 in assets. Certain assets can be excluded from this calculation, most notably a primary home and vehicle.

Disabled Adult Child Benefits

Disabled Adult Child (DAC) benefits are another way for an individual with special needs or a disability to receive monthly income payments. In essence, these are benefits that a disabled adult child can receive based on the work history of their parents. A qualifying individual can receive DAC benefits if a parent collects Social Security or SSDI.

To be eligible, the disabled adult child must have a qualifying disability that began before age 22. Additionally, to qualify in 2023, they must not have more than $1,470 monthly earnings. This is a far cry from the strict testing rules associated with SSI. The recipients of DAC benefits do not have to worry about Unearned Income, In-Kind Income, or asset limits. The monthly benefit for an individual receiving DAC benefits is based on the benefit being received by their parent. The recipient will receive ½ of the monthly benefit while the parent is still living and ¾ of the monthly benefit once the parent has passed away. Although each situation is different, the benefit received under DAC is typically greater than what an individual would receive on SSI.

Health Care Benefits

Unsurprisingly, individuals with special needs or disabilities have greater health care costs and usage than the average person. According to the U.S. Department of Agriculture, the average cost of raising a child until age 18 is $240,000. For an individual with autism, those costs are astronomically higher. Autism Speaks estimates the average lifetime cost of care for an individual with autism to be anywhere from $1.4 million to $2.4 million. For individuals with disabilities, their experience can often be categorized by the need for ongoing and regular care. According to the National Disability Navigator Resource Collaborative, 38% of individuals with disabilities have ten or more yearly doctor visits, compared to only 6% for individuals without disabilities.

With elevated costs comes elevated emphasis that should be placed on health care benefits. For individuals with special needs or disabilities, there are three primary options for health care coverage. However, there are additional programs and benefits available on a case-by-case basis.

Medicaid

This is a medical program jointly funded by federal and state governments. It primarily covers individuals who cannot pay for health care independently. This group includes children, older adults, the blind, and anyone eligible to receive federally assisted income maintenance payments.

Each state also administers its own program, so benefits and eligibility can vary, though all states must follow broad federal guidelines. In many states, individuals receiving SSI automatically receive Medicaid. In states that do not have automatic eligibility, those receiving SSI must apply before receiving Medicaid.

Medicare

This is a medical program funded by the federal government. It primarily covers individuals over the age of 65, but it also covers individuals who are under 65 and receiving SSDI benefits. In this instance, individuals must complete a 24-month qualifying period on SSDI before becoming eligible for Medicare. Then, after the twenty-fourth month, qualifying individuals are automatically enrolled in Medicare Parts A & B. The part B premium will be automatically deducted from an individual’s SSDI benefit.

Individuals eligible for Medicare can also apply for “Medicare Advantage” plans. These plans, known as Special Needs Plans, are specifically geared to cover special needs individuals and provide additional coverage. Further, their membership is limited to only qualifying individuals.

Coverage for Adult Children Incapable of Self-Support

Most people can stay on their parent's health care coverage until age 26. But for adult children incapable of self-support due to a physical/mental disability that existed before turning 26, they can continue to receive coverage under their parent’s health care plan after age 26.

This is a valid option for families who are happy with their medical coverage under an employer plan. While it is not permanent, as the parent will stop working at some point, there are numerous benefits in continuing coverage that have already proven effective.

Waivers

Waivers are one of the lesser-known benefits available to families or individuals with disabilities or special needs. Although they may be lesser known, these programs can potentially provide more significant benefits. Known formally as Section 1115 Medicaid Demonstration Waivers, this is another program run by the Social Security Administration (SSA) to provide further benefits to those in the Medicaid ecosystem. The stated purpose of these waiver programs is to give states the flexibility to design programs that can better serve their Medicaid populations. In particular, many states have at least one waiver program solely targeted toward individuals with developmental disabilities or other special needs.

At its core, the waiver program provides financial benefits for a stated group of individuals. For individuals with special needs, waiver benefits can range from paying additional health care costs to providing services that promote community living. For example, in Pennsylvania, individuals with an intellectual disability, autism, or developmental disability are eligible for the Consolidated Waiver. The consolidated waiver can provide up to $70,000 per year in payments for eligible services. Individuals who may be eligible can search online for any waivers available to them in their specific state.

If you are just learning about the waiver program and believe that a loved one is eligible to receive benefits under a similar program, then time is of the essence. Unlike Medicaid, simply meeting eligibility requirements is insufficient to receive waiver funding. These programs need more funding and capacity, which sometimes leads to substantial waiting lists. Across the U.S., over 268,000 individuals are currently on waiting lists for various waivers, with an average wait time of three years. With so many families trying to gain access to these programs, it’s essential to apply and begin the waiting period as soon as you are able.

How You Can Take Advantage of These Benefits

If you or a loved one has a disability or special needs, you know that simply getting through the day can be a struggle. You already have a whole host of concerns without worrying about how you’re going to pay for living expenses or medical care.

At Wealth Enhancement Group, we're caregivers, too. We know what it's like to have children with special needs or disabilities. We see the uncertainty that comes with ensuring they're taken care of. And because we've been in your shoes, we know how to help.

We have advisors from across the country with decades of experience specializing in various financial planning disciplines, including special needs planning. Reach out today to learn more about the planning options available to you and find out how we may be able to help ease your financial burdens.

This article is written by Thomas Flynn with contributions from William Mullin.