Dovetailing Disabled Adult Child Benefits with Supplemental Security Income Benefits

by Jaburg Wilk
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[author: Bridget O'Brien Swartz]

The special needs child is near age 18 and has been unable to for qualify SSI because the parents' income/assets are "deemed" or attributed to the child during the child's minority.  A short window exists to qualify for SSI by meeting the SSA's definition of disability and to establish such disability for purposes of later qualifying for DAC (Disabled Adult Child) benefits, which are more substantial and not needs-based.  The time factor in qualifying for DAC is demonstrating that the child met the SSA definition of "disability" before age 22, although application for DAC can occur at a later date. It just becomes harder to demonstrate that eligibility before age 22, the older the child becomes, and the further away from age 22.

Let's clarify the distinction between SSI and DAC benefits.  What they have in common is their definition of disability.  SSI, unlike DAC, assumes that the child does not qualify for another disability benefit,--DAC or Social Security Disability Insurance (the latter of which is based on the child's own insured status not that of a parent)--or that such benefit is less than the federal maximum benefit rate which is$698 in 2012.

There is a 5-month elimination or waiting period before a child can qualify for the DAC benefit, during which time if the SSA determines that the child qualified for SSI they would qualify for Medicaid.  It is important to note that the child would also need to meet SSI's financial eligibility requirements.   Eligibility for at least $1 of SSI categorically and automatically qualifies the child for Medicaid medical benefits.

Upon qualifying for DAC benefits, the child typically is no longer qualified for SSI benefits due to the amount of the new DAC benefit.  They will never qualify for SSI benefits again given that after the first $20 of DAC benefits, SSI is reduced dollar for dollar.   Additionally, the child will be eligible to enroll in Medicare 24 months following the award of DAC (or SSDI).

If the child was initially eligible for SSI benefits, they should be able to remain eligible for Medicaid coverage.  There is a Medicaid program that exempts the DAC benefits from its income eligibility requirements, if the individual had previously been eligible for SSI benefits AND such benefits were terminated due to the amount of the DAC benefits.

Typically, when SSI benefits are terminated and Medicaid is notified, it will send a notice regarding reapplication for Medicaid benefits within a certain timeframe.  If the timeframe is missed, the application can be initiated at a later date.  When the child is eligible to enroll in Medicare, then they can maintain their Medicaid coverage as secondary insurance which will cover the Medicare deductibles and co-pays.

It is important to consult with an attorney who has expertise in both public benefits and special needs planning as both benefit rates and qualifications can and do change.  Minor variations in the circumstances outlined above may result in non-qualification or reduced benefits.

About the author:  Bridget O'Brien Swartz is a partner at the Phoenix law firm of Jaburg Wilk.  She is a Certified Specialist in Estate & Trust Law certified by the State Bar of Arizona and Certified as an Elder Law Attorney by the National Elder Law Foundation (NELF).  Bridget is past president of the Arizona Chapter of the National Academy of Elder Law Attorneys (NAELA) and of the Special Needs Alliance.  She is a 2011 Southwest Super Lawyer as well as a 2012 Best Lawyers in Elder Law/Trust and Estates.  She is a frequent author on special needs and elder law topics.  Bridget can be reached at bos@jaburgwilk.com or 602.248.1013.

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This article is not intended to provide legal advice and only relates to Arizona law.  It does not consider the scope of laws in states other than Arizona.  Always consult an attorney for legal advice for your particular situation.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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