Raising a family is challenging, even under the best circumstances. For those with special needs children, however, the emotional -- and financial -- stakes are raised dramatically. Very often, their medical bills and specialized care they require far outweigh routine costs. Plus, many parents see their income drastically reduced because they either have to cut back on work or pay someone else for their child's care.
Fortunately, many government programs and community resources are available to help relieve the financial burden of parenting special needs children. But eligibility criteria can be complicated and the application process time-consuming. Here are a few helpful resources:
Through the Social Security Administration, the government provides two types of disability coverage: Supplemental Security Income (SSI) and Social Security Disability Income (SSDI). Rules and eligibility requirements differ between the two programs -- and benefits differ for children and adults.
In a nutshell, SSI is a needs-based, cash-assistance program (similar to welfare) for disabled people of any age in low-income families that have limited resources. Children under 18 (under 22 if they attend school) qualify for SSI benefits if their disability meets these criteria:
They have physical or mental conditions severe enough to result in marked and severe functional limitations; and
Which can be expected to result in death; or
Which has lasted or can be expected to last for at least 12 continuous months.
Under age 18, income and resources for both the child and other family members living in the same household are considered when determining whether or not the child is eligible for SSI; however, after age 18 only the child's resources are considered. Also after age 18, the adult definition of disability applies, which means that it must result in the person being unable to do any substantial gainful activity, such as work for pay.
SSI payment amounts vary by state, since some states supplement federal payments. And, in most states, children receiving SSI also qualify for Medicaid to help pay medical bills.
SSDI is a separate program funded by payroll deductions (part of FICA). Although children sometimes receive SSDI payments if their parents are disabled, in those cases their eligibility is based on their parents' disability status, not on their own. However, after turning 22, children who were already disabled may qualify for SSDI on their own if at least one parent:
Is already receiving Social Security retirement or disability benefits; or
Died and worked long enough to qualify for Social Security (i.e., paid into the system during their working years -- usually at least 10 years).
Eligibility rules and definitions for SSI and SSDI are very complex. To find out if your child qualifies, call Social Security directly at 1-800-772-1213, or visit the Social Security website and search under the Disability and SSI tabs. One particularly helpful resource is "Benefits for Children with Disabilities," SSA Publication No. 05-10026. Click HERE to learn more about Medicaid.
Fortunately, most diseases and genetic disorders have robust support groups and research organizations that can help. A good place to start your search for the appropriate group is the Alliance of Genetic Support Groups.
One last consideration: When planning for their disabled child's long-term financial security, many people leave money directly to their child or name him or her as a beneficiary of an insurance policy or retirement plan. This sometimes backfires, since it may disqualify the child from receiving future government benefits and services, which often impose strict personal asset limits.
Always consult an attorney or estate-planning professional to ensure that you have set up the proper legal documents to protect your child's financial future. If you need help finding a financial planner in your area, the Financial Planning Association has a good search engine.
This article is intended to provide general information and should not be considered tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how tax laws apply to your situation and about your individual financial situation.
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