Government programs such as Supplemental Security Income (SSI) and Medicaid are needs based. This means that an individual must have limited resources and satisfy certain other requirements.
SSI provides a maximum monthly cash benefit for a disabled individual living alone of $808 in 2014. This includes a federal benefit of $721 plus a state benefit of $87. If an individual is determined to be eligible for SSI in New York, that person automatically receives Medicaid benefits. Medicaid is a necessity for most disabled individuals since it is required to access adult services such as housing, day and respite programs, job coaching, etc.
The resource limitation for SSI is $2,000 for an individual. What can you do if your special needs child has more than $2,000 in his name?
If your child is under age 18, you can spend down the excess amount in order to get your child’s assets under $2,000. How should you spend the money?
Let your child pay for medical or dental care. If you pay for specialized therapy, this is an opportunity to spend down resources. Going out to dinner? Let your child pay his or her own way. The assets should be spent on your child’s expenses, however, not on yours.
Concerned about the moral implications of spending your child’s money? Remember that you are doing this so that your child can access essential government benefits. And, you can keep track of the money spent and later make a gift to your child in a proper way.
Since Social Security may investigate how your child’s resources were spent in the three years prior to the SSI application, you should be keeping good records on when the money was spent and what it was spent for. Keep a log or spreadsheet of expenditures, along with receipts and canceled checks. If you have a joint account with your child, Social Security considers all of the money in the account to be your child’s money.
Other questions on this topic will be answered in upcoming blogs. Here are some of them:
What if the money is in a custodial account like an UTMA of UGMA?
What if my child is over the age of 18?
Can I transfer my child’s money to my account?
Are there any alternatives to spending down my child’s money?
See you next week.
Craig