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What
You Should Know About Government Benefits for People with Disabilities
by Dave Harmon, MSW, MBA
Parents of children with disabilities know that finances can sometimes be
stretched to pay for all that is needed for their childıs care. For those
families and individuals who qualify, government benefits are an important
source of help. Many people are unaware of what government benefits can provide
and whether or not they qualify to receive them. Eligibility for a child with
disabilities who is under 18 is based on the parentsı income, but thereafter,
it is based on the childıs own assets and income. The most important programs
for people with life-long disabilities are Medicaid and Supplemental Security
Income (SSI). Letıs take a look at how they work.
Medicaid is a state-administered, federally reimbursed program that pays for
needed medical care for eligible people. An applicantıs medical diagnosis,
finances, and age are used in determining eligibility. SSI is a federal program
that provides income from the federal government to those who are
"aged", "blind", or "disabled." Cash benefits are
paid each month, up to the 2001 SSI federal benefit rate of $530. Though this
amount is the same nationwide, many states add money to the basic rate.(For
children under age 18 who live for at least one month in certain institutions
paid for by private insurance, the monthly SSI payment is limited to $30. This
is a change to the previous regulation in which the payment limit applied only
when Medicaid paid more than half of the cost of the childıs care.)
SSI benefits can enable an individual with a disability, or family, in need
to pay for living expenses as well as for things that insurance may not cover,
such as co-payments and certain equipment. In addition to providing monthly
benefit payment, SSI eligibility also entitles an individual to other benefits
and services depending on the state in which he or she lives, such as: Medicaid;
food stamps, payment of Medicare premiums.
Defining "Disabled" Under SSI
For children to be defined as having a disability, the Social Security
Administration (the federal agency in charge of SSI) reviews how his or her
disability affects everyday life. The child must meet the following criteria:
have a proven physical or mental condition which results in "marked and
severe functional limitations" ; the condition must last at least 12 months
or be expected to result in death; the child must not be working at a job that
the SSA considers to be substantial work. The childıs condition must be
reviewed periodically by SSA to determine if it is still disabling, and evidence
must be provided that the child is being treated for his or her condition. At
age 18, the child must be requalified using the rules that apply to adults with
disabilities.
Eligibility for both SSI and Medicaid is based on need. A person is not
qualified to receive SSI if he or she has "countable resources" in
excess of $2,000 or "countable income" in excess of the Federal
Benefit Rate. The SSI payments are reduced by the amount of any "countable
income" received by the individual. Generally, government benefits are paid
to a child with a disability who is a dependent, based on family income. But
once a child turns 18, these benefits are awarded based on the childıs own
assets and income (even if the child is still living at home with his or her
parents). Once a child becomes eligible due to disability, SSA will look at the
parentsı income level.
According to the Social Security Administration some assets are considered
exemptnot countable such as:
- The house an individual lives in and the land it is on;
- Personal and household goods (depending on their value);
- Life insurance with a face value of $1,500 or less;
- Burial plots or spaces for the individual and immediate family; burial
funds for the individual;
- A car with a current fair market value up to $4,500. The car may be of any
value, however, if it has been modified to accommodate a personıs
disability or if it is needed for necessary activities.
Some of an individualıs income is also not counted toward SSI eligibility
such as: The first $20 of most income received in a month (from any source); the
first $65 a month earned from working and half the amount over $65; food stamps;
most food clothing and shelter from non-profit organizations; most home energy
assistance. If the individual with a disability works, any wages used to pay for
items needed for work related to the disability are not counted as income.
(Source: Social Security Administration.)
Since eligibility for government benefits is dependent on these financial
restrictions, a person with a disability would be in jeopardy of loosing those
benefits if he or she amasses any resources above the limit. This can cause a
dilemma for parentsor other relativeswho want to provide the child who has
a disability with an inheritance when they die. The inheritance can be used to
fund those things that make life enjoyable and bring additional comfort to the
person with a disability beyond the basic necessities of life like a CD player,
video games, tickets to the movies or for a trip. Fortunately, families can
leave an inheritance to a member who has a disability through a Supplemental
Needs Trust or Special Needs Trust. A trust is a legal arrangement in which
property is held by one party for the benefit of another. A Supplemental Needs
Trust or Special Needs Trust is one which is set up for the benefit of a person
with special needs. Since the government strictly regulates Special Needs
Trusts, certain rules must be carefully observed. Differences exist from state
to state as to when Medicaid liens or payback provisions are required on trust
assets. You should work with knowledgeable professionals who fully understand
these Medicaid requirements in your state. These issues will be examined more
closely in future installments.
Knowledge is key
For many people with disabilities, benefits provided by the government are
crucial. That is why a good understanding of what these benefit programs entail
and what criteria determine eligibility is essential in applying for and getting
coverage. However, new regulations have tightened eligibility criteria
considerably and have affected many aspects of setting up Special Needs Trusts.
They are complex and require a strong knowledge of the current legislation and
how it impacts people planning for their child with special needs. In order to
preserve eligibility for the benefits that they depend upon when planning for
the future of their child with a disability, parents should think about
consulting a qualified professional. One way to begin this process is to call
Met DESK, MetLifeıs Division of Estate Planning for Special Kids. MetDESK is
committed to helping families through the maze of legal and financial planning
for the future of a child or dependent with special needs. To contact a MetDESK
Specialist in your local community call 1-877-MetDESK (1-877-638-3375) or visit
the MetDESK web site located at www.metlife.com/desk to request a meeting by
filling out the on-line appointment maker. As a division of MetLife Financial
Services, MetDESK was established to extend MetLifeıs traditional commitment to
public service to families of children with special needs.
Dave Harmon, MBA, MSW, is the Manager of the MetDESK, Division on Estate
Planning for Special Kids, Metropolitan Life. Mr. Harmon is also a parent of a
child with special needs.
SOCIAL SECURITY a/k/a Old Age, Survivors and Disability Insurance (SSDI)
vs. SSI: Whatıs the difference?
Often, people can get both Social Security and SSI benefits. SSDI entitlement is
not based on economic need and can be paid as retirement benefits, disability
benefits, and survivor benefits. Retirement benefits are usually paid to those
62 or older and their families. For an applicant to receive Social Security he
or she must be "insured" as defined by the program or in some
instances, be a dependent or a survivor of an insured person in order to receive
benefits. Being insured requires that one have worked a certain amount of time
which is measured in quartersin most cases at least 20 quarters in the
40-quarter period immediately preceding the entitlement to benefits. Fewer
restriction apply to those who get a disabling condition before age 31 or due to
blindness. In addition to being insured, an adult individual who wants to
collect Social Security benefits for a disability must meet the same definition
of disability as used in the SSI program for adults.
Children over the age of 18 who have a disability that began prior to age 22
and who meet the definition of disability are eligible for SSDI benefits based
on their deceased, disabled, or retired parentıs Social Security entitlement.
The childıs entitlement is one-half of the parentıs primary benefit amount if
the parent is alive and three-quarters if deceased. There are no income (from
passive sources) or asset limitations for the child.
Another important difference in the two programs is that eligibility for SSDI
does not mean automatic eligibility for Medicaid. Rather, after receiving SSDI
for two years, the beneficiary is eligible for Medicare.
All Grown UpSSI changes for children over 18
When a child turns 18, he or she is no longer considered dependent--though he or
she may still live at home--and SSA no longer looks at the parentıs income to
determine eligibility. Individuals with disabilities who are over 18 who qualify
for SSI also gain access to Medical Assistance (MA), which helps pay medical
expenses. Individuals can work and receive SSI, though the payment will
decrease, and as long as earning do not exceed $28,000 annually, they can keep
MA benefits.
In addition, SSI allows that Impairment-related work expenses (IRWE) (the
costs of things a person needs because of his or her disability in order to
work) not be counted toward the personıs income and not affect the SSI check.
SSI also has a program called PASS (Plan for Achieving Self-Sufficiency) that
allows an individual with a disability to set aside income in order to fund
education, training or equipment for a job. Certain US residency requirements
apply as do restrictions on payments to individuals living in certain housing
situations.
Medicare VS. Medicaid
Confusion sometimes arises between the two government healthcare programs
Medicare and Medicaid. Here is a brief comparison which illustrates the
important differences.
MEDICARE
- A health insurance program; no income or asset limitations to eligibility.
- Available to individuals 65 and older and to some people who have a
disability before age 65.
- Benefits include: hospital; rehabilitative care in a nursing home for
limited periods of time; home health care; and hospice care.
- Of limited utility for people with disabilities living in the community
and for custodial care in a nursing home.
MEDICAID
- Medicaid eligibility is based on need and category: an applicant may only
have limited assets and income in most states; must be aged, blind or
disabled.
- Eligibility criteria vary by state based on waivers that states have
received from the federal government.
- Provides comprehensive in-patient and out patient coverage including
physical therapists, occupational therapists, medical equipment and devices,
recreational and social programs; and diverse rehabilitative services.
- Pays for custodial nursing home care.
- Pays for housing programs within context of rehabilitative services.
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