Providing for our families financially is extremely challenging in today’s society. When we add caring for a family member with special needs to the mix, those challenges become even greater.
Fortunately there are various forms of financial and medical support available. However, understanding all the rules that pertain to subsidy programs can make seeking assistance seem so complex that families often forgo looking into any type of supplemental support at all. In addition, many have heard about the assistance programs and have incorrectly assumed they will not be eligible for such benefits.
Adding to the complexity is the issue of gifts and how they relate to benefits for an individual with special needs. Many assume that financial gifts, even those at the holiday season, will automatically jeopardize someone’s benefits. That is not necessarily true, but gifting does have some consequences that must be considered to ensure such benefits are protected.
Available government benefits for families vary from state to state. The two basic forms of assistance are Social Security and Medicaid. Both have specific financial thresholds and disability requirements that must be met to qualify for such benefits. Depending on your home state, other potential benefits include a possible cash supplement to a Supplemental Security Income (SSI) payment, food stamps and various forms of clinical services including respite care and therapeutic programming.
However, under Social Security and SSI, a person can work and still receive supplemental benefits. For more on the specifics of Social Security, SSI and respective thresholds, visit the Social Security website. Click on the disability link in the center of the page. There you will find a number of questions answered including information pertaining to different states.
Another critical aspect of the financial picture involves the concept of assets. Generally, to qualify for benefits, a single person must have no more than $2,000 in assets. For a married couple, the limit is $3,000.
The definition of assets can be complex, but three items are usually not considered assets: a person’s residence, car and a prepaid funeral. The one exception is that some states put a limit on the value of a person’s residence. For example, if a home is of a considerably high value, it may be considered an asset and therefore an individual would be ineligible for Medicaid. Technically, all other cash, whether it is in bonds, insurance policies, bank or checking accounts is subject to consideration under the threshold guidelines.
It is critical to manage assets according to those thresholds and the categories that are exempt so as to fully maximize benefit options. Some states have also moved to partial buy-in thresholds for Medicaid benefits, meaning that income or assets or both, above certain levels, are acceptable, but a small premium must be paid to qualify for the benefits.
The key to understanding gift giving and government assistance income rules is to remember that every financial gift is in essence an asset. Therefore, parents must plan for their family members’ finances to ensure that an individual with special needs is not disqualified from benefits should that person receive money as a gift. Even a small inheritance or larger cash gift can cause a disruption in benefits if it pushes a person over the asset thresholds.
According to Tracy Miller, a benefits expert at Protected Tomorrows, Inc., the general rule is that if a gift is easy to liquidate, it is an asset. “For example, grandparents may opt to give savings bonds to their grandchildren to commemorate important milestones in their lives,” Miller says. “Unless handled correctly, these might be counted as income or assets by Medicaid and Social Security.”
Gifts such as MP3 players, computers or stereo systems are safe gifts, however, because they are not easy to liquidate and are essentially considered personal possessions. Miller does have one note of caution about jewelry. “Jewelry is questionable, as it can be and has been used as a vehicle to hide assets,” she says.
To best keep track of an individual’s financial situation, a family should keep a journal of all income and expenses. Use a basic notebook to record weekly money that has been provided for spending or for an allowance, noting it in the journal as “spending money” or “allowance.” You may be asked to provide this verifying information at least once a year.
A person seeking additional information on this topic can turn to a variety of Internet resources. This site provides the latest information on rule changes and updates on all laws pertinent to families of individuals with special needs in addition to articles on related topics.
In addition, detailed Medicare information is available at www.medicare.gov. There you can find information regarding the federal Medicare program and an explanation of the complex Medicare Part D prescription coverage. However, Miller does advise investigating Medicaid programs by going to the Web site for your specific state.
One additional concern to note is that many states are moving to what is referred to as the Medicaid waiver model of services. Individuals with special needs may find services exceptionally limited if they are unable to maintain Medicaid eligibility. In such states, Protected Tomorrows Advocates can help ensure that a family is maximizing its options and adequately providing for all loved ones, including those with special needs.
Navigating government assistance rules without a guide can be extremely challenging. It is possible to protect assets and provide for your family without being disqualified from benefits, but doing so can take deep thought and thorough planning. Protected Tomorrows Advocates can work with you and discuss the various legal aspects and the options that are best for your specific situation.