People with special needs are often going to be unable to earn income on their own. There are a couple of different government programs that provide income for people who are in this position. One of them is Social Security Disability Insurance.
When you work and you pay those pesky FICA or self-employment taxes, you are earning credits that will ultimately lead to eligibility for Social Security benefits. This program is for the most part in place to provide income for senior citizens, but it also protects you if you become unable to work due to a disability.
If you have sufficient credits, you may be able to qualify for Social Security Disability Insurance benefits if a disability prevents you from earning much income on your own. Since this program is not specifically designed to provide for people with financial limitations, you could potentially qualify, even if you are in possession of resources.
Supplemental Security Income
The other government benefit program that provides income for people with special needs is called Supplemental Security Income or SSI. This program is only available to people who can demonstrate a significant level of financial need. As a result, you cannot qualify if you have significant assets in your own name.
Estate Planning Implications
There are some estate planning implications that you should take into consideration if you have a loved one in your family who is relying on the Supplemental Security Income program. If you were to leave a direct inheritance to this family member, eligibility for SSI could be lost.
This is not the only program that could enter the picture under these circumstances. A very significant percentage of people with special needs are enrolled in the Medicaid program. Clearly, people with special needs are going to require medical care and treatment, and it can be extraordinarily expensive.
Medicaid provides a source of health insurance, but once again, it is a need-based program. An improvement in financial status could trigger a loss of eligibility.
To address this dynamic, you could help out a loved one with special needs if you were to convey assets into a supplemental needs trust. The government benefits do not necessarily cover everything that the recipient may need. The trustee could use assets in a supplemental needs trust to satisfy these unmet needs.
As long as the expenditures are for approved purposes, eligibility for Medicaid and Supplemental Security Income would not be impacted.
Schedule a Consultation
Careful planning is required if you want to provide for a loved one with special needs who is relying on government benefit programs. If you would like to discuss the matter in detail with a licensed professional, our firm would be glad to help.
Feel free to send us a message through the following link to set up a consultation: Hartford CT Special Needs Planning.