Financial Trusts, SSI & ABLE Accounts
Can I get Social Security for my child with a disability?
Social Security (SSI) for children under age 18 is a needs based program. Your child is able to receive Social Security Income (SSI) if they have a “medically determinable physical or mental impairment” AND parents meet financial criteria. After age 18, if there is persistent illness and they are on Social Security for 2 years, they are also put on Medicare.
Another form of Social Security (RSDI) is available to children who have a parent that retires, becomes disabled, or passes away. A child with a disability, may continue on this form of Social Security after the age of 16.
What is an ABLE Account?
The ABLE Act of 2014 (Achieving a Better Life Expectancy) is a tax-advantaged savings account for individuals with disabilities and their families. An ABLE Account recognizes the significant cost of living with a disability and allows individuals to save money, without counting it as assets that would disqualify someone from receiving their benefits such as SSI, SNAP, Medicaid and other public benefits. Money in an ABLE account must be spent on “qualified expenses” such as: education, housing, transportation, health care and more.
What is a Special Needs Trust?
This is a trust set up for an individual with special needs, where contributions do not count as assets against Social Security or Medical Assistance benefits. It is similar to an ABLE account, but there are no annual limits on the contributions, and no total limit. Individuals who are employed can contribute to their special needs trust, and use it as a savings account. At the end of an individual’s life, remaining funds go back to the state to pay back any medical expenditures that occurred during the individual’s lifetime.
What is a supplemental needs trust?
A supplemental needs trust is another way to protect assets and allow individuals with disabilities to receive funds from others, such as an inheritance, into the trust, without impacting benefits such as SSI or MA. The main difference between this and a Special Needs Trust, is that at the end of the life of the individual receiving the money, the funds go to the beneficiaries set up at the time of the trust creation and NOT back to the state.