How can someone with Special Needs achieve Financial Eligibility for SSI

Today’s blog post continues the series about Special Needs Law.  The blog post on February 19, 2015 gave an overview of the legal issues facing people with special needs.  The blog post on February 5, 2015 discussed the new ABLE accounts.  The blog post on February 26, 2015 discussed sources of income for people with special needs.  The blog post on March 5, 2015 discussed medical insurance for people with special needs.  The blog post on March 12, 2015 discussed how the Social Security Administration requires people with special needs to prove a disability to qualify for Supplemental Security Income (SSI.)  The blog post on March 19, 2015 discussed how the Social Security Administration requires people with special needs to prove financial eligibility to qualify for Supplemental Security Income.

Today’s post discusses how a person with special needs can go from having too many assets to having few enough assets to qualify for (and maintain eligibility) for Supplemental Security Income (SSI) and, if necessary, for Medicaid.

Someone with special needs who cannot qualify for SSI because he or she has assets above $2,000, needs to get rid of some of those assets.  Sounds simple, right?  Of course, as with anything created by Congressional politicians, it’s not as simple as it sounds.

Someone can give away assets to become poor enough for SSI, but that will create a period of ineligibility for SSI for up to 3 years.  Giving away assets also makes someone ineligible for Medicaid coverage (that might be as important as the SSI income to certain people.)

Someone can also spend down the excess assets.  That won’t create a penalty period of ineligibility (unless it was a thinly disguised attempt to give away assets such as buying your brother’s junk car for $10,000.)  The that was bought could be useful, like new clothes, or a new refrigerator, or something specifically helpful to the disability, like an adjustable bed, or a wheelchair, or an communications assistance device.  Expenditures for things that make life easier for the person with special needs are a great way to spend down excess resources.  On the other hand, if there aren’t helpful things that the person needs to get, it is a waste of money to buy stuff just for the sake of spending down excess resources.

There are ways to save excess resources that can benefit someone with special needs and still allow the person to qualify for SSI and Medicaid.  Depending on the amount of resources and the age of the person with special needs, a self-settled Special Needs Trust can be very useful.  For someone with fewer “excess” resources (and usually under the age of 65,) a pooled trust might be the best choice.  For someone who was disabled at a young age, an ABLE account (if approved in your state) should probably be used as part of the asset protection plan.

Future installments will discuss these tools in more detail.

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