It’s not new, but I really like this video: in which young adults with Down syndrome question whether or not they really have “special” needs. (Spoiler alert: The answer is “No.”) The video concludes with the narrator listing the very typical needs that people with Down syndrome and other disabilities have: education, employment, and friends. To this list, many of my clients would add: a safe and comfortable place and reliable and efficient transportation, both integrated in the larger community.
The goal of creating a comprehensive financial, legal and logistical plan for a person with a disability is to ensure that the person will have access to sufficient resources throughout her or his lifetime in order to sustain these very typical needs. In most cases, the resources come from three sources: 1) the person’s own income from employment; 2) government or public benefits and 3) the person’s family. The amount of resources coming from one “pot” may influence how much can come from another. There is a fourth source for some people, when the disability is the result of an accident or malpractice that has generated a settlement. There is also a fifth source of employer-sponsored or private disability insurance for those whose disability develops after a period of employment. For the purposes of this blog, we will consider only the first three, which are relevant regardless of both the time of onset and the cause of the disability.
Personal and professional experience has shown me that many people with disabilities want to work and have the capacity to work, so we should treat employment as a viable source of financial support. In the planning process, we need to be both ambitious and realistic in factoring in work income. On the side of ambition, we need to consider how the person with a disability, like any of us, may be able to progress in her/his workplace, whether that means gradually increasing hours or taking on new responsibilities that result in a higher wage or salary. The person may also have plans to obtain further education or technical/vocational skills that will allow her/him to move into a job with either higher pay, a more regular schedule or more opportunities for advancement. It is reasonable, therefore, to consider the person’s employment income rising over time. On the other hand, the nature of the disability may also limit the person’s capacity to work full time and/or increase the likelihood of early retirement. The person and her/his planning team also need to factor in any additional costs that come with either beginning to work or working more. For example, if the person does not drive and public transportation is insufficient, s/he may need to budget for a ride-sharing service or a taxi to commute to work. Or, the person may want to drive, but that may require initial investment in a modified vehicle. Finally, the person may require certain supports such as job-coaching, coaching to find or increase work; and these supports will need to be funded either by government benefits (such as a Medicaid waiver) or family contributions, both to be discussed below.
Whether and how much the person works will influence how much support is available from government (public) benefits. I have discussed this at length in other blogs, so this will be a summary. First of all, at the time of application for benefits, the person’s disability must limit her/him, such that s/he cannot earn over the level of “substantial gainful activity”, (SGA) which, in 2019, is $1,220 for someone who is not blind, and is $2,040 for someone who is blind. If the person can or does earn over that level then, barring special circumstances, s/he will not be eligible for any public disability benefits at all. Any income from work will reduce Supplemental Security Income (SSI, a means-tested public benefit) by 50 cents for every dollar earned over $85. Social Security Disability Insurance (SSDI) on the other hand, is an entitlement and is not reduced for work income as long as the earner remains below the SGA threshold. In addition, there is a long and gradual process that allows a worker to remain on benefits for some time, even while earnings from work increase. If, as we discussed above, the worker with a disability either has the capacity to advance in her/his field or change to a more lucrative field, then the planning team needs to understand the complex interaction between earning and eligibility for public benefits, and understand the circumstances under which benefits will be reduced or even cease due to work.
In most cases, income from work and income from government benefits will not be sufficient to cover all life expenses for the person with a disability and family. Money, where available, is required to fill the gap. Again, within a comprehensive future plan, there is an interdependency among work income, income from government benefits, and the expected family contribution. Clearly, the more the person earns from her/his own work, the less the family will need to subsidize. On the other hand, certain types of family support may have a negative impact on eligibility for government benefits. For example, if the family of a person with a disability pays for food and shelter for that person, this kind of contribution will likely be considered as being In-kind Support and Maintenance (ISM) by Social Security and result in a reduction in SSI benefits of up to $257. If the family provides cash directly to the person with a disability, that is unearned income and will result in a dollar-for-dollar reduction in SSI. Making food-and-shelter or direct-cash disbursements from a Special Needs Trust will not circumvent the reductions. Making disbursements from an ABLE account will. So the planning team needs to be well-versed in what is income and what is not both for Social Security purposes and for the purpose of Medicaid, through which most adult support services are funded.
While it is common to say that people with disabilities have “special” needs and even to call our field “special needs” planning, it would be more accurate to say that people with disabilities have typical needs but also some special rules on how they can or cannot pay for them. The job of a good planning team is to understand the rules—even the offbeat ones—and thus to understand the best way to make employment income, public benefit, and family contributions come together to pay for the really very un-special needs for home, meaning, relationship and community.