If you are the parent or guardian of an individual with special needs, it’s time to begin planning their financial future. For many, special needs planning starts with identifying and applying for government benefits. California, in particular, offers an array of public benefits that aim to address the unique financial needs of individuals with special needs.
Below we break down federal and California specific public benefits for special needs individuals and other financial aspects you should consider for your child’s financial future.
Supplemental Security Income (SSI)
SSI is a federal income supplement program that provides cash assistance to individuals with disabilities who have limited income and resources. Unlike social security, there is no age or work history requirement to qualify for this program, meaning qualified individuals can apply and earn these benefits at any time.
The Social Security Administration (SSA) has unique eligibility requirements for children with special needs, including:
- The child has a medically determinable physical or mental impairment or impairments which result in marked and severe functional limitations; and
- The impairment(s) has lasted or can be expected to last for a continuous period of at least 12 months or be expected to result in death
If the individual with special needs is blind there are additional eligibility requirements.
The child will receive SSI benefits until they reach age 18 at which time the SSA will evaluate impairments based on the definition of disability for adults.
In order to apply for SSI benefits, parents or guardians must submit an application through SSA and submit a Child Disability Report. Once both documents are submitted, a SSA representative will contact you to begin the application process.
As of 2024, the monthly maximum for an eligible individual is $943.
NOTE: As part of the SSI application process, SSA ascertains whether the parent or guardian of the special needs child exceeds a certain income or asset threshold. If your income and assets exceed the threshold, your child may not be eligible for SSI benefits or only a portion. You can find more on Parent-to-Child Deeming here.
California State Supplementary Payment (SSP)
In addition to SSI, eligible individuals may receive an extra cash benefit known as the California State Supplementary Payment (SSP). In 2024 the SSP is an additional $239 per month for most recipients.
Employment Support under SSI Benefits
Many federal and state-based programs support employment without it directly impacting financial benefits. In 2024, the SSI shared “students younger than age 22 may exclude $2,290 of their monthly earnings, with an annual limit of $9,230, when calculating their income for SSI.”
Plan to Achieve Self-Support (PASS)
Plan to Achieve Self-Support (PASS) is a program that allows working SSI recipients to save money without it directly impacting benefit eligibility. This program allows your child to feel as if they are a part of their own financial future by allowing them to tuck away their hard earned dollars for employment-related expenses, like transportation, school, books, or other related services.
Childhood Disability Benefits (CDB)
Children can receive Social Security Disability Insurance (SSDI) through the Childhood Disability Benefits (CDB) program.
CDB provides financial assistance for special needs individuals based on the work record of a parent or guardian who is retired, disabled, or deceased and has paid into the Social Security system. The child with special needs must have a qualifying disability that started before the age of 22. The disability must meet the SSA’s definition of disability for adults.
The benefit amount is determined by the parent’s Social Security record, as well as the number of family members who are collecting the SSI benefit. Families interested in applying for Childhood Disability Benefits (CDB) should contact the SSA.
Medi-Cal
Medi-Cal is a state and federally funded program that provides health coverage to eligible low-income individuals, including children with special needs.
In order to qualify for Medi-Cal benefits, individuals must meet certain income and asset requirements. Once enrolled, children have access to a comprehensive suite of health services, like doctor visits, hospital stays, prescription medication, preventative services, and other medically necessary services. Your child may also be eligible for more specialized medical services, like physical therapy and occupational therapy.
If you qualify or are currently receiving SSI benefits, you automatically qualify for Medi-Cal and do not need to submit additional paperwork – an added bonus. Enrolling in Medi-Cal can help families offset the high dollar cost of healthcare services, while ensuring access to necessary medical care and support.
CalABLE
Achieving a Better Life Experience (ABLE) was created as a result of the ABLE Act, which established tax-free savings accounts specifically for individuals with special needs.
ABLE Accounts allow individuals with special needs to save money without risking eligibility for government benefits. The money tucked away into an ABLE Account can be used on qualified expenses without taxes or penalties.
While the ABLE Act is a federal program, California enacted AB133, which established CalABLE. CalABLE is open to individuals with a disability that occurred before age 26 who meet certain criteria. This program provides several types of investment options – from conservative portfolios to growth portfolios – based on the individual’s financial goals.
Besides tax efficiencies, the benefit of CalABLE is that anyone can contribute to an individual account at any time. There are, however, annual shared contribution limits and a max contribution limit of $130,000 in California.
We recommend working with a financial advisor, like Prudent Investors, to help harmonize your ABLE Account and Special Needs Trust.
Holistic Approach to Special Needs Planning
Finances are just one component of special needs planning. And while preparing for your child’s financial future is an essential task, leveraging the array of public programs offered to individuals with special needs will not only benefit your child, but those who support them.
There are a multitude of state-based and federal programs that aim to support the physical, mental, and educational needs of your loved ones and can help offset costs while improving quality of life.
Here are just a few California public benefits available to you and your family:
- California Children’s Services (CCS): CCS is a statewide program that provides diagnostic, treatment, and case management services for children with certain physical limitations and chronic health conditions. Find more information on CCS here.
- Medical Therapy Program (MTP): Provides physical therapy, occupational therapy, and medical therapy services for children with physical limitations or conditions. Find more information on MTP here.
- California Early Start Program: The Early Start Program provides services for infants and toddlers (up to age 3) with developmental delays or disabilities. Services include assessments, individualized family service plans, and intervention services designed to enhance the child’s development. Find more information on Early Start here.
- California’s Regional Centers: Through the Department of Developmental Services, California’s Regional Centers provide services and support for individuals with developmental disabilities. Services include early intervention, behavioral therapies, respite care, and family support.
Professional Assistance for Special Needs Planning
As a caregiver to a loved one with special needs, you recognize the importance of proactive planning and strategic decision-making, but you do not need to go through this journey alone.
A special needs trust (SNT) is an excellent way to protect your loved one financially, while maintaining eligibility for government benefits. Exploring the versatility of an SNT with a qualified financial advisor can lay the foundation for a secure and prosperous tomorrow.
Prudent Investors will work with you and your loved one to help maximize necessary government benefits and support the lifelong needs of individuals with special needs. Our extensive experience working alongside family trustees and professional fiduciaries has honed our awareness of the worries, fears, and vulnerabilities faced by SNT beneficiaries, which is why we’re here to support you and your loved one from the very beginning.
If you’re interested in a special needs planning consultation or to learn more about our services, we invite you to connect with Prudent Investors today.
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