If you are the caregiver, family member or friend of a loved one with special needs, chances are you will, or have considered, giving them a gift. Whether the gift is for a special occasion or “just because,” there are important guidelines that should be followed.
An individual with special needs may be eligible to receive of government benefits – either now or in the future. These benefits are a critical component to their care, providing supports such as food, housing and medical/dental care. Sadly, a well-meant gift to a person with special needs can have disastrous consequences on the eligibility requirements for these crucial government benefits.
Government benefits such as Medicaid, Supplemental Security Income (SSI), Supplemental Security Disability Income (SSDI) and Section 8 housing are all directly affected by additional monies that may be received by the individual with special needs. An individual receiving SSI should not receive money or the equivalent of money (i.e., personal or traveler’s checks, money orders or money via wire transfer) for items such as food, rent and utility bills.
Under current law, individuals receiving SSI should not be given more than $20 per month in cash gifts from any source, as this may reduce the beneficiary’s SSI benefit for that particular month. Individuals wishing to make cash gifts to beneficiaries should consult with a qualified professional knowledgeable in the area of special needs trusts if they are unsure as to how it will affect the beneficiary’s SSI benefit.
Despite the existence of limitations to cash gifts, there are many other creative ways for individuals to provide monetary gifts to a beneficiary without adversely affecting their governmental benefits.
For purposes of this article, we will refer to the individual with special needs as the “beneficiary.”
- Give the beneficiary movie passes, tickets to plays, musical and sporting events, amusement parks or other events. These items must be used by the individual and must not be resold. A companion who might need to assist or accompany the individual may also be included.
- Give a gift certificate to a beauty salon or barber shop or pay the facility directly for services provided to the individual.
- Directly pay for cleaning or maid services at the beneficiary’s home.
- Directly pay for travel expenses.
- Directly pay telephone bills and/or for the purchase of a phone.
- Directly pay for a magazine or newspaper subscription.
- Directly pay for cable or satellite television subscriptions.
- Directly pay for a club membership (not including food clubs).
- Directly pay for expenses relating to a pet, including the purchase of a pet, pet food, supplies and veterinary services.
- Give clothing accessories (such as belt, shoes, hat, scarf, purse, wallet, sunglasses, etc.)
- Give arts and crafts materials/supplies.
- Directly pay participation fees for park district events.
- Give gift certificates or gift cards, but only those which are non-transferable and are from stores that do not sell food.
THINGS NOT TO DO
- Do not give the beneficiary cash, coins, money orders, personal or traveler’s checks, a debit card, a prepaid credit card or a gift card or certificate to a store that sells food items (such as Sam’s Club or Wal-Mart). Do not deposit any money into the beneficiary’s personal accounts or wire transfer money.
- Do not give the beneficiary stocks, mutual funds, treasury bonds or savings bonds, as they can be sold and converted to cash.
THINGS TO REMEMBER
- The beneficiary should never sell an item (or cancel a membership to receive a cash refund) given to them by a loved one.
- Beneficiaries should not be taken to a casino where loved ones/trustees purchase chips or put money into a slot machine for the beneficiary, as this is considered a “cash equivalent,” similar to giving money to the beneficiary.
- Consult a qualified professional if you are unsure about the ramifications of any gift you are considering for a beneficiary. It is always better to ask first than to make a mistake that could negatively affect a beneficiary’s government benefits.
By utilizing a creative approach to giving gifts to individuals with special needs, it is possible to provide these individuals with an enriched quality of life that does not interfere with the important government benefits they receive on a monthly basis. Those who wish to make monetary gifts need to be mindful of the limitations that exist and should always seek professional advice when in doubt. As always, the professional and knowledgeable staff at Protected Tomorrows is available to assist in navigating this complex issue.