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What to Do When Your Special Needs Child Turns 18 | Financial Support

Special Needs Trust

The financial planning steps you take when your special needs child turns 18 will establish the foundation for your child’s support and well being for the rest of his or her life.

If you make the wrong decision during this transition, it could affect your child well into the future – often when we’re no longer here to care for him or her.

Therefore, as parents of special needs children, it’s important for us to understand our options when planning for our children’s financial future.

Most special needs planning begins with a look into whether a child needs and qualifies for Supplemental Security Income (SSI) for support. SSI is a means-based program for people with disabilities and provides a limited monthly cash benefit of about $733 a month, the exact amount depending on the state and whether the beneficiary receives housing or income from other sources.

In and of itself, this payment may or may not mean much for a child’s financial future, but SSI eligibility also comes with a much more important benefit — access to Medicaid. For this reason alone many families, especially those with children who have major medical expenses, pursue SSI benefits despite the program’s severe income and asset limits. SSI can also be the ticket into vocational training and group housing services.

Once a child reaches age 18, she qualifies for SSI based on her own income and assets. In order to receive benefits, the child must meet the government’s disability standard, have less than $2,000 in assets and receive minimal income. Each dollar of unearned income (including any direct payments of cash to a beneficiary, along with additional reductions for in-kind payment for food and shelter) and every two dollars of earned income reduces a beneficiary’s base SSI award by one dollar.

If the SSI benefit reaches zero because of this reduction, SSI coverage ends. Despite these restrictions, an SSI beneficiary needs only a $1 award in order to retain her Medicaid benefits, so careful planning in this realm carries great rewards.

A child who became disabled before reaching 22 years of age can also collect Social Security Disability Insurance (SSDI) based on a parent’s work record if either of his parents has worked enough quarters to collect Social Security and is already receiving Social Security benefits or has died. Under SSDI, the “adult disabled child” of the Social Security beneficiary receives a monthly benefit check, as long as he doesn’t perform substantial work, defined as earning more than $1,090 a month. After receiving SSDI for two years, the adult disabled child also begins to receive Medicare, a substantial benefit.

Often, adults who became disabled as children receive SSI benefits until their parents retire, at which point they transition to SSDI, which is usually preferred both because it may offer a higher monthly benefit and because the beneficiary no longer needs to be concerned about SSI’s strict rules on other sources of income and savings. On the other hand, the switch to SSDI can be problematic if it means that the adult child loses eligibility for Medicaid or other programs.

If a child has more than $2,000 in assets when he reaches age 18, rendering him ineligible for SSI, a parent, grandparent or court has the power to create a special trust, known as a “(d)(4)(A) ” or “first-party supplemental needs” trust to hold his savings. Any assets held by the trust do not count against the $2,000 asset limit for SSI, allowing him to qualify.

One requirement of such trusts is that when the beneficiary dies, any funds remaining in the trust must be used to reimburse the state for medical care the trust beneficiary received during his life. Because of this payback provision, planners often encourage trustees to pay for a child’s supplemental needs from a (d)(4)(A) trust before using other assets, in order to limit the state’s collection later on.

Finally, many families create trusts known as “third-party” supplemental needs trusts in addition to (d)(4)(A) trusts.  As long as families fund these trusts with their own assets (never with their child’s funds) and give the trustee complete discretion to distribute the funds for a beneficiary’s care, the funds held in the trust will not count as the child’s assets. Furthermore, these trusts do not have to contain a payback provision, allowing families to place significant amounts of money into the trust without worrying that the government will receive a large portion later on. The trusts can then provide a child with special needs with services and care he may not receive from other sources throughout his life.

You don’t want to wait to plan for your child’s transition out of childhood. We can help you start planning for the future today. Contact DJ@Jeylaw.com or 678-325-3872.

What To Do When Your Special Needs Child Completes High School

ClassroomPictPart I: The Path To Employment

As our children begin to enter into early adolescence, many of us begin to realize that many – if not all – of the services and programs that our child relies on for care will soon disappear and be replaced by radically different benefits.

Most of these new benefits abruptly come into play once our children leave the public education system. This may happen at any time between the ages of 18 and 23, depending on the state you live in and your child’s particular needs.

One of the most important aspects of this transition is securing employment services for our children. According to the National Collaborative on Workforce and Disability, one-quarter of all adults with disabilities work at either a full- or part-time job.

Some of the remaining three-quarters are unable to work at all due to their disability; but a large number of disabled adults who aren’t employed don’t have a job because they lack the skills necessary for gainful employment. Several federal laws address this situation with the goal of providing vocational education to a wider segment of the population with disabilities.

The Individuals with Disabilities Education Act (IDEA) mandates that special education plans begin transition planning when a child turns 14. At this point, a written transition plan must be incorporated into a child’s Individual Education Plan (IEP), outlining the steps a school will take to help a child with special needs acquire skills necessary for an eventual move into the workforce.

By the time the child turns 16, the special education team must steer the child towards development programs keyed towards the child’s individual vocational preferences. The law also mandates periodic measurement of the child’s progress to ensure that he receives attention from the proper vocational advocates.

Once your child reaches 18 and receives either Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI) payments, the Social Security Administration (SSA) offers several programs to encourage your child to work. The best-known program, Ticket to Work, is a somewhat complicated program designed to offer beneficiaries a way to begin a career without having to worry about losing their SSI or SSDI benefits.

SSI beneficiaries, on the other hand, must conform to very strict income and asset limits. Often, beneficiaries who could hold a job do not pursue one because they are worried that they will lose their SSI benefits once they earn too much. While this is certainly a concern, the benefits of employment may outweigh the loss of SSI. Furthermore, the government provides specific incentives for SSI beneficiaries to work. For instance, if a person with disabilities is under 22 and at school or in a vocational training program, $1,780 of his monthly income does not count against his SSI benefit, up to a yearly limit of $7,180.

The Social Security Administration also offers the PASS (Plan for Achieving Self Support) program for SSI beneficiaries who would like to work. Under this program, a beneficiary presents the SSA with a detailed plan for obtaining a specific type of employment. Once the SSA approves the plan, a beneficiary sets aside income and assets towards achieving her goal without having those funds count against her benefit. Funds can be used for things like childcare, transportation, books and supplies, and additional education and training.

Many programs are available for people with special needs to seek employment if they would like to do so. Unfortunately, the rules for most of these programs are complicated and the SSA is often not very good at explaining them.

Beginning to plan well before your child completes high school – with the assistance of local vocational agencies and qualified special needs planners – is your best chance for successfully navigating the maze of educational opportunities for your child.

 

 

Special Needs Trusts & Estate Plans – When’s The Right Time?

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As a parent or guardian of a child or adult with special needs, one of our main concerns is what will happen to our loved ones when we pass? Who will take care of them? Will they have enough money? Will they be OK?

And while most of us try NOT think about dying, it’s an important step in ensuring that our loved ones will be protected and cared for upon our passing. Putting into place a special needs trust is something we can do to help ensure that our child or adult ward will be well cared for and have a high quality of life.

Too many times we’ve seen families devastated by the sudden loss of parents or guardians. Now is the time to plan and put into place a legal plan that will help protect your loved ones and their government benefits.

Eligibility for many government benefits are determined based on the resources your child or adult ward holds in their name. If they have too many resources, even by just one dollar, they may not qualify for, or may even lose, benefits such as Supplemental Security Income (SSI) and Medicaid.

Even if your child or ward does not currently receive government assistance, he or she may need it in the future. A special needs trust is a way to protect their current resources and future benefits. Through a special needs trust you can leave assets to your child or ward without negatively impacting his or her government benefits.

Government benefits only cover basics such as food, clothing and shelter. Through a special needs trust, a designated trustee for your loved one will be able to provide your child or adult ward with access to things such as:

  • a personal care attendant
  • out of pocket medical and dental expenses
  • vacations
  • home furnishings
  • vehicles
  • hobbies
  • and education.

Jeyaram & Associates has extensive personal and legal experience with setting up special needs trusts and estate plans. Please contact DJ Jeyaram at DJ@Jeylaw.com or 678.325.3872

Georgia False Medicaid Claims Act Does Not Meet Social Security Act Requirements

Georgia False Medicaid Claims ActIn response to a request to review the amended Georgia False Medicaid Claims Act, the U.S. Inspector General wrote to Toni Prine, interim Inspector General for the State of Georgia. In a letter dated April 3, 2013, the U.S. Inspector General determined that the amended Georgia False Medicaid Claims Act does not meet the requirements of section 1909(b) of the Social Security Act.

Some key differences between the Federal False Claims Act and the Georgia Act include the following:

1. The Federal Act “establishes liability for knowingly presenting, or causing to be presented, a false or fraudulent claim for payment or approval.” The Georgia Act requires that the claim be submitted to the Georgia Medicaid Program.

2. The Federal Act establishes liability for “conspiring to commit a violation of another subsection” of the Act, but the Georgia Act does not establish liability for this conduct.

3. The Federal Act states that a qui tam action shall be dismissed “if substantially the same allegations or transactions as alleged in the action or claim were publicly disclosed in a congressional; Government Accountability Offic[e]; or other Federal report, hearing, audit, or investigation.” However, the Georgia Act does not set forth a provision that is as effective at facilitating qui tam actions.

Section 1909 of the Social Security Act provides a financial incentive to states that enact a law regarding submission of false or fraudulent claims to the state’s Medicaid program. Georgia must resubmit an amended Act by August 31, 2013.