Funding Sources for Children with Special Needs: A Preview

By Attorney Amanda M. Buzo

I have the pleasure and honor of co-presenting with Frank Hickman at the Milestones Annual Autism Spectrum Disorder Conference in June. Our first of two sessions will be an overview of funding sources for children with special needs. I thought it might be of interest to our readers for me to provide a sneak peek.

Cash Benefits. The cash programs administered by the Social Security Administration that are also most relevant to our younger clients are Supplemental Security Income, Social Security Disability Insurance, and Childhood Disability Benefits.

Supplemental Security Income (SSI) is a Federal income supplement program funded by general tax revenues, not Social Security taxes. It is designed to help the aged, blind, and adults with disabilities that have little or no income, as well as low-income parents raising minor children with disabilities. SSI benefits, sometimes called Title XVI benefits after the section of the Social Security Act, are designed to provide money to meet basic needs for food, shelter, and clothing, plus ease the financial burdens sometimes associated with special-needs children.

Approved individual applicants receive a maximum of $710 per month in 2013; couples receive $1,066 per month.

Individuals who are age 65 or older, blind, or disabled and who have limited income, limited resources (less than $2,000), and are U.S. citizens or nationals, or are in certain categories of aliens, are eligible for SSI benefits. Disabled minor children under 18 may qualify for Child’s SSI if their parents have limited income and assets according to “deeming” rules, under which a parent’s income and assets are deemed to be available to the child. Deeming rules also apply to couples when one spouse is disabled. Unlike SSD, no SSI benefits are available to the minor children of a disabled parent who qualifies only for SSI.

Social Security Disability Insurance (“SSD” or “SSDI”), sometimes called Title II benefits after the section of the Social Security Act, provides monetary benefits for people who are found to be totally and permanently disabled and who have also met the non-disability requirements of contributing to the Social Security Trust Fund through tax on their earnings. Social Security does not give benefits to individuals with partial or short-term disabilities.

SSD provides approved individuals, and in some cases a member of their family, monthly payments based upon their average lifetime earnings. Unlike SSI, there is no fixed amount for SSD payments. The average Social Security disability payment to a disabled worker is anticipated to be $1,132 in 2013; the maximum disability benefit in 2013 is $2,533. SSD payments are usually adjusted for inflation and should be received after a 5-month waiting period from the onset date of disability. Claimants who have under $2,000 in resources may be eligible for SSI during this 5-month waiting period. Those who are found to be disabled are eligible for Medicare 24 months after their first SSD benefit month.

In order to be eligible for SSD benefits, an individual must meet the Social Security Administration’s definition of disability. Disabled adult means an individual who is age 18 or older and has a medically determinable physical or mental impairment which either meets a “listed impairment” or functionally results in the inability to do any substantial gainful activity, and has lasted or can be expected to last for a continuous period of not less than 12 months or can be expected to result in death.

Also, the individual must have worked long enough and recently enough to receive the benefits. This is determined by the number of work credits an individual has accumulated during their work history. Currently, one Social Security work credit is earned for each $1,160 in earned wages, but that dollar amount changes yearly. A maximum of four work credits can be earned annually. Generally, an individual must have accumulated 40 work credits, 20 of those earned in the last 10 years, to qualify for SSDI. Younger workers may qualify even if they have not accumulated the necessary 40 credits. A worker younger than 24 may qualify if they have earned six credits in the three years before they became disabled. Individuals aged 24-31 may qualify if they have work credit from half the time between when they turned 21 to the time they became disabled. A worker over the age of 31 must have earned at least 20 of his or her credits in the last 10 years before the onset of disability in order to qualify for SSDI.

Minor children of a disabled wage-earner may, depending on how long and how much the worker contributed to the Social Security system (“family maximum”), receive auxiliary benefits equal to up to 50% of the wage-earner’s benefit amount.   

An adult who was disabled before the age of 22 may be eligible to collect Title II “child’s benefits,” formerly called DAC (Disabled Adult Child) benefits, now known as Childhood Disability Benefits (CDB), if a parent is deceased or begins receiving retirement or disability benefits. These benefits are considered “child’s benefits” because they are based on their parent’s Social Security work record. The “adult child” must be unmarried at the time of application, must qualify as “disabled” under the Social Security Administration’s definition before age 22, regardless of when the Social Security Administration actually makes that determination, and must not have substantial earnings ($1,040 gross per month as of 2013). The adult child’s monthly benefit is 50% of the parent’s primary insurance amount (amount due under Social Security rules) if the parent is alive; the benefit is 75% of the primary insurance amount if the parent is deceased.

Many adult disabled children with limited resources will qualify for SSI from age 18 until the time their parent retires, becomes disabled, or dies, at which time they become eligible for CDB on their parent’s earnings record, and can draw an amount equal to half the parent’s benefit amount (not deducted from the parent’s benefit). Therefore, documenting an adult child’s disability before age 22 is important, even if they are not receiving SSI in the interim. And it is important for a retiring or disabled parent, or the surviving spouse, to file a claim for benefits for a disabled adult child, even if that child is not living at home by then. Medicare becomes available to CDB beneficiaries after two years, and new CDB beneficiaries still on Medicaid are not subject to an increased Medicaid spend-down.

It is important to note that the type of Social Security benefit awarded can evolve as the recipient’s situation changes. The first approval could be for SSI, but later changes to a combination of SSI and SSD (because the Social Security recipient has accumulated some covered work quarters but is unable to be substantially and gainfully employed). And possibly, even further down the road, the Social Security recipient’s parent is entitled to receive SSD, Social Security retirement, or dies, and the Social Security recipient is then entitled to CDB on his or her parent’s work record. The recipient’s Social Security benefits could continue without change for the beneficiary’s lifetime or could experience several permutations. Therefore, it is important to be aware of the current benefits received and understand the basic eligibility rules to anticipate changes.

Health Insurance. Medicaid encompasses many different programs administered by the Ohio Department of Job and Family Services (“ODJFS”) which provide health insurance. All of the programs have income and/or resource eligibility criteria, and for the most part are intended to provide health insurance to families with minor children, people with disabilities, or individuals over 65.

Medicaid for the Aged, Blind, and People with Disabilities (“ABD Medicaid”) is for individuals living in the community; this is not “nursing home Medicaid”. To be eligible, you must be 65 or older, legally blind, or disabled, a U.S. Citizen or meet Medicaid citizenship requirements, an Ohio resident, and can provide your Social Security Number. Your countable income must be less than 64 percent of the Federal Poverty Limit, which means no more than $622 per month for single individuals or $1,066 per month for married couples. Additionally, an ABD Medicaid recipient cannot have resources of more than $1,500, or $2,250 if married.

Medicaid Buy-In for Workers with Disabilities (“MBIWD”) is Medicaid for working individuals. To be eligible, you must be between 16 and 64 years old, disabled as determined by the Social Security Administration or ODJFS or be eligible under the MBIWD medically improved category, and employed in paid work (includes part-time work).

You also must be a U.S. Citizen or meet Medicaid citizenship requirements, live in Ohio, and can provide your Social Security Number.

Your income cannot exceed 250% of the Federal Poverty Limit, which is $2,394 for a single person in 2013, and your countable resources cannot exceed $11,148. You will pay a premium, which is determined by your income.

Medicaid Home and Community Based Services (“HCBS”) Waivers allow participants with disabilities to have more control of their lives and remain active members of the community by providing alternatives to institutional long term care.

The Ohio Department of Job and Family Services provides funding for all waiver programs within Ohio Medicaid and administers the Ohio Home Care Waiver and Transitions Carve-Out Waiver. The county Departments also determine financial eligibility for all Waivers.

The Ohio Department of Developmental Disabilities manages the Level One Waiver, Individual Options Waiver, Transitions DD Waiver and Self Empowered Life Funding (“SELF”) Waiver.

Parent income is not counted for minor children who qualify for the waivers. The Waiver recipient’s assets cannot exceed $1,500. The “special income level” is used to compute income for HCBS Waiver recipients.   The special income level is equal to 300% of the current SSI payment standard for an individual.   The SSI payment standard for an individual in 2013 is $710.00. Therefore, in 2013, the special income level is $2,130.

If income exceeds the Special Income Level, there are certain exemptions and disregards which may apply. Individuals found eligible under spenddown provisions are not eligible for HCBS waiver programs. Individuals with income between $1,385 and $2,130 will be subject to Patient Liability.

Many children with disabilities apply for Medicaid even if covered as a dependent on his or her family’s insurance plan. Before the Affordable Care Act’s ban on lifetime coverage caps and preexisting conditions exclusions, and the Act’s requirement to cover most young adults on a parent’s plan up to the age of 26, Medicaid was a disabled child’s best option for ensuring health coverage. Now it is still important as a provider of in-home nursing care, as a supplement to private health insurance, or as an access to community resources such as group homes or developmental disability board services.

Medicare is the federal health insurance program for individuals 65 years of age or older, certain individuals with disabilities, and people with End-Stage Renal Disease. It is administered by the Centers for Medicare and Medicaid Services, under the direction of the Secretary of the United States Department of Health and Human Services.

Medicare is not a means-tested program, meaning that eligibility for Medicare is not dependent on a person’s income or resources. Medicaid and SSI are examples of means-tested government programs.

To be eligible, the applicant must be 65 years or older, have an end-stage renal disease diagnosis, or receive SSD or CDB, and be a citizen of the United States or legal alien resident for at least five years. Most Medicare recipients pay a premium for Medicare.

If an individual is eligible for Medicare because he or she is a recipient of SSD or CDB, or under a work-incentive program, they may be able to retain their Medicare coverage for years even if they lose their SSD or CDB benefits, if, despite their disabilities, they become able to engage in substantial gainful activities (“SGA”). SGA in 2013 is $1,040 per month, or $1,740 if blind.

My next newsletter article will discuss our second session on the topic of legal issues as a special needs child ages. This includes applying for government benefits, guardianship, and eligibility for community resources. My thoughts go out to all of those affected by the events in Boston and in West, Texas. Best wishes as both cities emerge from their devastating losses with hope and courage.

For more information on the Milestones Annual Autism Spectrum Disorder Conference, visit our firm calendar or Milestones’ website.

Posted in Articles, Articles: Children with Special Needs.