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Many people with disabilities are eligible to receive some form of financial assistance. Below are examples of benefits that may assist your family while helping plan for your child's future. The key to success is planning ahead and having a "backup plan" as you look toward your child's future and approach each milestone in his or her transition.
See also LEGAL CONSIDERATIONS
An ABLE Account is designed for individuals with disabilities to have a tax-free savings account similar to a 529 College Savings Plan (ABLE accounts are considered 529A accounts).
- Money cannot accumulate over $2000 in their own name (under SSI and "traditional" Medicaid rules), but one can place up to $15,000 a year into an ABLE Account
- Limit of one ABLE account per individual
- The total value of an ABLE account cannot exceed $100,000 or the individual will have their SSI eligibility suspended until the account balance returns below that level
- Account funds are to be used solely to cover disability-related expenses or the individual will face a penalty
- ABLE account is capped at the College Savings 529 Plan maximum in the state in which the ABLE account is open; the Illinois limit is $400,000.
- Opportunity for an individual with a disability to save excess work earnings or Social Security money to be used in the future
- Individual with a disability has full and complete control over this account (unless there is a Guardianship established, or the individual is a minor)
- Useful when a relative has left an inheritance of less than $15,000 directly to the child who is on "traditional" Medicaid and/or SSI (and mistakenly did not leave it to a 3rd party Special Needs Trust)
- Can deposit "adult" child support ordered by a court, in order not to impact SSI or Medicaid.
- Useful vehicle for small litigation settlements.
- An ABLE account requires strict reporting and record keeping
- Payback to the state is required upon the individual's death for the cost of all Medicaid services, which were provided to them after the establishment of the ABLE account
- Not appropriate vehicle for gifts or inheritances from others for the benefit of the individual with disabilities, unless there is the strong belief that all funds gifted will be spent for disability-related expenses before the individual with disabilities dies
In that situation, a Third Party Special Needs Trust is the most appropriate option. With a Third Party Special Needs Trust's favorable income tax rules (that is being taxed as a Qualified Disability Trust), the Trust can shelter potentially more than $15,000 in annual investment income.
Health Benefits for Workers with Disabilities (HBWD)
HBWD allows individuals who are working to save up to $25,000 in their own name, and allows them to save unlimited amounts in IRAs, 401ks, or pension plans. Individuals pay a small premium that's usually less than $100 a month and obtain full Medicaid services, including Medicaid Waiver programs. The only program it does not pay for is Community Integrated Living Arrangements (CILAs, commonly called Group Homes) or Intermediate Care Facilities for Individuals withI/DD (ICFDDs, such as Lambs Farm and Misericordia). Therefore, HBWD can be an easy substitute to opening an ABLE account in many cases.
Before considering an ABLE account, you may consider consulting with an experienced special needs planning attorney.
To find such an attorney, contact:
Arc of Illinois at (815) 464-1832, and/or visit Special Needs Alliance, a national not-for-profit association of experienced special needs planning attorneys (attorney membership by invitation only) or Special Needs Answers.
For More Information:
- ABLE National Resource Center
- ABLE Information by State
- ABLE Act: 10 Things to Know
- National ABLE Alliance
- Illinois ABLE
Download a free guide to navigating the Illinois Disability System: http://www.farley1.com/The_Book_Robert_H_Farley_Esq.pdf
More resources can be found at: http://www.rubinlaw.com/category/resources/
Legal/Financial Planning Resources
Spain, Spain, and Varnet Rubin Law
Theresa Varnet, Richard & Nancy Spain Brian Rubin and Benjamin Rubin
33 North Dearborn Street, Suite 2220 1110 West Lake Cook Road
Chicago, IL 60602 Buffalo Grove, IL 60089
(312) 220-9112 (847) 279-7999
Rivkin & Rivkin, LLC Estate Planning L. Mark Russell
440 Milwaukee Avenue, Suite 200 401 E. Prospect Avenue, Suite 106
Lincolnshire, IL 60069 Mt. Prospect, IL 60056
(847) 793-2484 (847) 991-7451
The Dignity Group Amy Handler Kasallis
Thomas J. Reilly Amy@kasallislaw.com
1163 Ogden, Suite 705-354 500 Lake Cook Road, Suite 350
Naperville, IL 60363 Deerfield, IL 60015
(630) 681-1119 (773) 370-1856
National Alliance to help locate attorneys for special needs
WORK INCENTIVES PLANNING AND ASSISTANCE (WIPA) COUNSELING
217-522-7985 (V/TTY) or 800-852-5110
Service Area Includes: Boone, Bond, Bureau, Carroll, Champaign, Christian, Clark, Clay, Clinton, Coles, North Suburban Cook, Crawford, Cumberland, DeKalb, Dewitt, Douglas, DuPage, Edgar, Edwards, Effingham, Fayette, Ford, Franklin, Gallatin, Hamilton, Hardin, Iroquois, Jackson, Jasper, Jefferson, JoDaviess, Lake, LaSalle, Lawrence, Lee, Livingston, Logan, Macon, Marion, Marshall, Mclean, Montgomery, McHenry, Ogle, Kane, Peoria, Perry, Piatt, Pope, Putnam, Richland, Rock Island, Saline, Sangamon, Shelby, Stark, Stephenson, Tazewell, Vermillion, Wabash, Washington, Wayne, White, Whiteside, Williamson, Winnebago and Woodford
Mayor’s Office for People with Disabilities
312-746-5743 or 312-744-7833
Service Area Includes: City of Chicago
Department of Human Services, Division of Mental Health
866-390-6771 or 312-814-5050
Service Area Includes: Adams, Alexander, Brown, Calhoun, Cass, South and West Suburban Cook, Fulton, Greene, Grundy, Hancock, Henderson, Henry, Jersey, Johnson, Kankakee, Kendall, Knox, Macoupin, Madison, Mason, Massac, McDonough, Menard, Mercer, Monroe, Morgan, Moultrie, Pike, Pulaski, Randolph, Schuyler, Scott, St. Clair, Union, Warren and Will
SOCIAL SECURITY RED BOOK - 60 page booklet (available in English and Spanish)
A summary guide to Employment Supports for Persons with Disabilities under the Social Security Disability Insurance (SSDI) and Supplemental Security Insurance (SSI) programs.
PLAN FOR ACHIEVING SELF SUPPORT (PASS)
Social Security Administration work incentive which supports an SSI recipient's vocational goal by allowing the set aside of resources, SSDI, income from either wage or self-employment to pay for pre-approved expenses in order to meet the occupational goal. To utilize PASS for a goal of self-employment, a business plan needs to accompany the PASS application.
PROPERTY ESSENTIAL TO SELF SUPPORT (PESS)
When growing your business please know that SSA does not count some resources that are essential to your means of self-support when we decide your continuing eligibility for SSI. PESS allows for this growth while continuing eligibility.
SSA does not count your property if you use it in a trade or business (for example, inventory or goods) or personal property you use for work as an employee (for example, tools or equipment). Other use of the item(s) does not matter.
SSA does not count up to $6,000 of equity value of non-business property that you use to produce goods or services essential to daily activities. An example is land you use to produce vegetables or livestock solely for consumption by your household.
The IATP ATLOAN$ Program provides loans to Illinois residents with disabilities and/or their families or other authorized representatives on behalf of the person with a disability to purchase assistive technology devices and services and limited home modifications. The program also provides loans to Illinois residents with disabilities, 18 years and older to purchase equipment, services, and limited home modifications for self-employment and telework.
THE K-FUND MICROLOAN INITIATIVE A PROJECT OF THE CENTER FOR SOCIAL CAPITAL
LIFE'S PLAN INC. - Scott Nixon 630-628-7189
As of November 2013, Life's Plan Inc. has offered grant funding for micro enterprise business opportunities to individuals with disabilities in the past. They may be issuing mini grants for micro enterprise business startups in the future. Stay in touch by visiting their website or check them out on Facebook.
They would accept applications for any person who met the SSA SSI criteria for disability, DD, Ml included as well as physical disability, medically determined disability and aged disabled. Any client that the trust could serve in setting up a Special Needs Trust account, they would be open to accepting grant applications.
SMALL BUSINESS DEVELOPMENT CENTER
Many students with significant disabilities will eventually be eligible for the income and health programs under the Social Security Administration (SSA) -(SSI, SSDI, Medicaid and/or Medicare). Specific eligibility criteria should be discussed with your PAS agent or agency with whom you are working.
SSI - Supplemental Security Income
SSI pays monthly cash benefits to people who are age 65 or older, but also to those who are 18 years of age or older and meet the criteria of having a disability. It also pays benefits to those who are blind and/or under 18 with limited assets.
There are two main factors that are considered in determining an individual with a disability's eligibility:
- The individual must meet SSA's definition of being disabled
- The individual must have less than $2,000 in assets. There is a look-back window of up to 5 years. CLICK HERE for more info on what are considered assets and what is exempt from the look-back.
**Because of ongoing systematic changes, it is encouraged that you research the websites of each agency you are considering for financial assistance to access the most up-to-date information.
SSDI - Social Security Disability Income
SSDI is a payroll tax-funded, federal insurance program. SSDI, managed by SSA, is designed to provide income to people who are unable to work because of a disability. SSDI is not necessarily a long-term income solution. It is intended to provide income until an individual's condition improves. The SSA regularly requests proof of disability through an auditing process. Under this program, there are three main factors the state considers in determining an individual's eligibility:
- The individual must meet the SSA definition of having a disability
- The individual must have paid into social security over their lifetime / must have earned enough credits
- An individual with a disability may qualify under their parents, if the parents have paid into social security and are deceased, retired, or have a disability of their own
How This Works:
Social Security Disability Insurance (SSDI) provides benefits to disabled or blind individuals who are "insured" by workers' contributions to Social Security through paid employment with contributions to FICA. The worker must have worked and paid Social Security taxes for enough quarters/years to be covered under Social Security insurance; some of the taxes must have been paid in recent years. If the individual is working and paying into the FICA system before age 24, 6 quarters are required to qualify for SSDI, and then one is eligible for Medicare after 24 months.
Earning a Credit
In 2023, you must earn $1,650 to earn one Social Security work credit. This amount changes annually. An individual must earn six work credits before age 24 to receive SSDI. One credit can be made anywhere from 3 months - 12 months. After age 24, the amount of required credits increases.
Questions to consider:
- What proof of my financial situation or disabling condition is required?
- What happens to financial/medical benefits if I get a job?
- How often is my eligibility for benefits reviewed?
- What do I need to do to continue receiving the financial benefits?
- What records need to be turned in regularly?
- What changes in my situation need to be reported?
*Check out the 2020 Red Book, which is a summary guide to SSI and SSDI
In 2023, the Substantial Gainful Activity (SGA) amount for non-blind individuals is $1,470 per month and $2,460 for blind individuals. The monthly earnings amount that we use to determine if a month counts as a Trial Work Period is $1,050.
In 2023, the Supplemental Security Income (SSI) Federal Benefit Rate (FBR) is $914 per month for an eligible individual.
Individuals receiving Social Security Disability Insurance (SSDI) and their representative payees may use “my Social Security” to report wages online. Social Security plans to make this functionality available to SSI recipients in a future release. In the meantime, SSI recipients can still use the automated toll-free SSI Telephone Wage Reporting system on the free SSI Mobile Wage Reporting smartphone app to report wages.
A Special Needs Trust is a specialized legal document designed to benefit an individual who has a disability. A Special Needs Trust is most often a "stand-alone" document, but it can form part of a Last Will and Testament.
A Special Needs Trust enables a person with a physical or mental disability, or an individual with a chronic or acquired illness, to have an unlimited amount of assets in Trust for his or her benefit. In a properly drafted Special Needs Trust, those assets are not considered countable assets for purposes of qualification for certain governmental benefits. You will need a special needs attorney to draft and set up a Special Needs Trust.
Such benefits may include Supplemental Security Income (SSI), Medicaid, vocational rehabilitation, subsidized housing, and other benefits based upon need. For purposes of a Special Needs Trust, an individual is considered impoverished if his or her personal assets are less than $2,000.00.
A Special Needs Trust provides for supplemental and extra care over and above that which the government provides, such as medical and dental expenses, special equipment (such as vans for the disabled), training and education, insurance, transportation, special dietary needs, spending money, electronic equipment, computers, vacations, movies, and for a companion/respite worker.
By creating a Special Needs Trust now, a relative or friend can either gift money to your child's Special Needs Trust or leave a portion of their inheritance directly to the Special Needs Trust. The relative or friend does not need to create a Special Needs Trust if you have already created one. All that the relative or friend needs to do is name the Special Needs Trust as a beneficiary or designate that a specific sum of money or a portion of their estate is distributed to the Special Needs Trust. You do not want the relative or friend to distribute money directly to your child in his or her name, as it would impact government benefits and services. Accordingly, your Will would not give money directly to your disabled child, but would give the money to the "Special Needs Trust." Likewise, the beneficiary for life insurance policies and retirement funds would not be the disabled child, but the "Special Needs Trust," so the money would flow to the Special Needs Trust.
You may consider meeting with an attorney about the various ways to fund your Special Needs Trust. This could include having a life insurance policy where the beneficiary is the trust.
What is a will?
A will or testament is a legal declaration by which a person names one or more persons to manage their estate and provides for the transfer of property at death.
In the strictest sense, a "will" has historically been limited to real property while "testament" applies only to dispositions of personal property, thus giving rise to the popular title of the document as "Last Will and Testament," although this distinction is seldom observed today. A will may also create a testamentary trust that is effective only after the death of a person. Remember, any assets given to your son or daughter with a disability may disqualify them from any Social Security or state benefits. Any time there is a child with disabilities involved, it is even more important to take the time to plan for the future of that child.
Living wills are instructions given by individuals specifying what actions should be taken for their health in the event that they are no longer able to make decisions due to illness or incapacity. In these cases, a person is appointed to make such decisions on their behalf. A living will is one form of advance directive, leaving instructions for treatment. Another form authorizes a specific type of power of attorney where someone is appointed by the individual to make decisions on their behalf when they are incapacitated. People may also have a combination of both. It is often encouraged that people complete both documents to provide the most comprehensive guidance regarding their care.
Working With Benefits (Working While Disabled)
Trial work period-The trial work period allows an individual to test their ability to work for at least nine months while receiving SSDI benefits. During the trial work period, one receives the full Social Security benefits, regardless of earnings, as long as work activity is reported and one continues to have a disabling impairment.
In 2023, a trial work month is any month in which total earnings are over $1,050, or if self-employed, earnings are greater than $1,050 (after expenses) or one works more than 80 hours in one's own business. The trial work period continues until one has worked nine months within a 60-month period. Extended period of eligibility-After the trial work period, one has 36 months during which one can continue working and receive benefits for any month of earnings that are not "substantial."
In 2023, earnings over $1,470 are considered to be substantial. No new application or disability decision is needed to receive a Social Security disability benefit during this period. Expedited reinstatement-After benefits stop because earnings are substantial, an individual has five years during which to start benefits immediately if one finds themself unable to continue working because of one's condition. An individual will not have to file a new disability application and will not have to wait for benefits to start while one's medical condition is being reviewed to make sure one is still disabled.
Continuation of Medicare-If an individual's Social Security disability benefits stop because of earnings, but one is still disabled, free Medicare Part A coverage will continue for at least 93 months after the nine-month trial work period. After that, one can buy Medicare Part A coverage by paying a monthly premium. If one has Medicare Part B coverage, one must continue to pay the premium. If an individual wants to end your Part B coverage, it must be requested in writing.
Work expenses related to disability-If an individual works, one may have to pay for certain items and services that people without disabilities do not pay for. For example, because of one's medical condition, one may need to take a taxi to work, instead of public transportation or pay for counseling services. An individual may be able to deduct these expenses from monthly earnings before it is determined if one are still eligible for benefits.
How Your Earnings Affect Your Social Security Benefits
During the trial work period, there are no limits on earnings. During the 36-month extended period of eligibility, one usually can earn no more than $1,470 a month or benefits will stop. But, the work expenses you have as a result of one's disability are deducted when earnings are counted. If one has extra work expenses, earnings could be substantially higher than $1,470 before they affect benefits. This substantial earnings amount usually increases each year. A deduction of work expenses related to one's disability from earnings is determined if one is still eligible for benefits. These expenses may include the cost of any item or service one needs to work, even if the item or service also is useful in your daily living.
Examples include copayments for prescription drugs, counseling services, transportation to and from work (under certain conditions), a personal attendant or job coach, a wheelchair or any specialized work equipment.
Continuation of SSI-SSI payments are made to people age 65, blind or disabled and have little income or resources. If one is disabled and works, despite a disability, one may continue to receive payments until earnings, added with any other income, exceed the SSI income limits. This limit is different in every state. Even if SSI payments stop, Medicaid coverage usually will continue if earnings are less than one's state level.
Expedited reinstatement-If payments were stopped because of earnings and one becomes unable to work again because of a medical condition, one may request to start payments again. An individual will not have to file a new disability application if this request is made within five years after the month benefits stopped.
Plan to achieve self-support (PASS)-lf a plan for a work goal is approved, that will reduce your dependence on SSI or help you leave the Social Security disability or SSI rolls. Any money used for this purpose will not be counted when determining how current income and resources affect payment amount. For more information, ask for Working While Disabled-A Guide To Plans For Achieving Self-Support (Publication No. 05-11017).
Students with disabilities - Up to $2,220 of earnings per month are not counted (maximum of $8,950 for 2023) when the SSI payment amount is computed if one are under age of 22 and attends school or a training program on a regular basis.
How one's earnings affect SSI payments
The amount of SSI payments is based on income. When income increases, SSI payments usually decrease. So when one earns more than the SSI limit, payments will stop for those months. But, payments will automatically start again for any month income drops to less than the SSI limits.
If one's only income besides SSI is money earned from a job, then it's not counted in the first $85 of monthly earnings. 50 cents of every dollar earned after the $85 deduction is deducted from SSI payments.
Example: One works and earns $1,000 in a month. One receives no other income besides earnings and SSI.
$915 divided by 2 = $457.5013
A deduction of $457.50 from the SSI payment would occur. One may be eligible for a "plan to achieve self-support" which allows an individual to use money and resources for a specific work goal. These funds are not counted when a determination is made on how current income and resources affect the benefit amount.
What to report if one work and receive SSI
If one receives SSI, one must promptly report when:
- One starts or stops work;
- Duties, hours or pay change; or
- One starts paying expenses for work due to one's disability.
One must report your monthly earnings by:
- Calling toll-free at 1-800-772-1213 no later than the 6th day of the next month, or mailing or bringing your pay stubs to your local office no later than the 10th day of the next month. You can find your local office on the website at www.socialsecurity.gov. You will be given a receipt to verify your report. Keep this receipt with all of your other important papers from Social Security.
- Download the app: SSI Mobile Wage Reporting
For more information and assistance:
Work Incentives Planning and Assistance (WIPA) 855-665-6641 or 815-540-664
The goal of the WIPA program is to enable beneficiaries with disabilities to make informed choices about work, and to support working beneficiaries to make a successful transition to self-sufficiency. Each WIPA project has Community Work Incentives Coordinators who will:
- provide in-depth counseling about benefits and the effect of work on those benefits
- conduct outreach efforts to beneficiaries of SSI and SSDI (and their families) who are potentially eligible to participate in Federal or State work incentives programs; and work in cooperation with Federal, State, and private agencies and nonprofit organizations that serve disabled SSI and SSDI beneficiary