Issues for Unmarried Partners

Sally lives with her adopted adult daughter, Kayla, and Sally’s partner, Pat, who is not the natural, adoptive or step-parent of Kayla.  Sally has always been a stay-at-home mom while Pat is the wage earner.  Kayla was diagnosed with autism at 3 years old.

While visiting the Social Security Administration to determine if Sally is eligible for Social Security Retirement, Sally learns that Kayla could have been eligible for Childhood Disability Benefits, which is calculated based on Sally’s work history.  The problem is that Sally and Pat decided that Sally would care for Kayla, which means Sally doesn’t have enough work credits to provide a benefit to Kayla.  And because Pat is not Kayla’s parent, Pat’s earnings history is not applicable to Kayla.  The only cash benefit Kayla is eligible to receive is Supplemental Security Income (“SSI”), which at its maximum provides $698 per month in Ohio, instead of the potentially higher benefit from a parent’s fully insured work history.

This scenario could be altered a little and apply to many households: single parents who are not employed, an unmarried partner, grandparents taking care of grandchildren, and stepparents who have not adopted the child.  (Note that it is possible for grandchildren and stepchildren to receive benefits on a grandparent’s or stepparent’s work record, but certain criteria must be met.)

An adult child may receive Social Security benefits on a parent’s work record if the adult child is 18 years old or older, is able to document a disabling impairment prior to the age of 22, and has a parent who receives Social Security Disability Insurance, Social Security Retirement, or is deceased, having contributed enough to the Social Security system.  This program is known as Childhood Disability Benefit (“CDB”).

CDB is based on the parent’s covered work history and is a percentage of the parent’s benefit.  Children with a deceased parent will receive a higher percentage of the parent’s benefit.  CDB is an attractive benefit because not only does it provide Medicare to the child just like Social Security Disability Insurance recipients, but CDB does not have an income or resource test, although the adult child’s earned income can cause him or her to lose eligibility if he or she earns too much to continue to be “disabled.”  Unlike Medicaid and SSI recipients, people receiving CDB and Medicare can accumulate income or receive an inheritance without a concern of being “over resources.”  In fact, if a child first receives SSI and later receives CDB because a parent begins to collect SSDI or retirement, or passes away, the child won’t be penalized under Medicaid for the increase in income that may result from transferring from the SSI to CDB program.

It is important for parents of special needs children to recognize that if they are not a wage earner, then they are depending on the child’s other parent to provide the covered employment for a child to be eligible for CDB.  And if it is a single-parent adoption, a same-sex couple that lives in a state that doesn’t recognize their marriage, an unknown father, or one of the many other situations that result in Social Security only recognizing one parent, or a parent who doesn’t contribute to the Social Security system, thought must be given to the impact on a child with a disability if the parent is not a covered wage earner.

– Posted by Attorney Amanda Buzo

Posted in Blog, Estate Planning.