- I was already financially literate when I became a mother, but I had to learn a new financial lexicon when my disabled child was diagnosed.
- I learned about Medicaid waivers, including the Katie Beckett Waiver/TEFRA, and Intellectual and Developmental Disability waiver. These waivers allow disabled children to access Medicaid funding where otherwise they might not be eligible.
- I also learned about Supplemental Security Income (SSI) and why you might have to apply even if you don’t need the cash benefits, as well as how I might use ABLE accounts and special needs trusts to save for the future.
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When I became a parent, I was overwhelmed. I had always been great with kids and I had also always been good with my money, even when my resources were limited. But when you hold your child in your arms for the first time, the gravity of your new role hits you.
Among my concerns was the fact that now it was not just me who was dependent on my ability to earn and save; my child’s future would be affected by my money decisions, too.
On the day of my child’s diagnosis, I learned that there was so much more about parenting and money I didn’t know. Having a special needs child opened the door to a whole new world of hoops to jump through, savings strategies, and personal finance vocabulary.
The first word I learned was “waiver” in the context of Medicaid eligibility. Even if you have health insurance, your policy won’t necessarily cover everything you need as a special needs parent – that’s where Medicaid comes in.
Many states, though hardly all, allow your disabled child onto Medicaid – a program for low-income Americans – even if your income would ordinarily disqualify them. This is achieved through Medicaid “waivers.”
The Katie Beckett Waiver
In the ’80s, a young, disabled girl named Katie Beckett caught the attention of then-President Ronald Reagan. Her parents were trying to move their daughter home from a medical-care facility, but under Medicaid rules at the time, she could only receive coverage for the care she needed in a hospital, nursing home, or other similar institutional facility.
After running some numbers and considering the political benefits, President Reagan decided to give states the funding and option to cover children even when they were being cared for in their own homes. This is why many children with disabilities are now able to be integrated into our communities.
The Reagan administration found that it was cheaper to cover in-home services than care in an intermediate facility or hospital. In my opinion, it was also the morally correct thing to do
The Katie Beckett program is also known as TEFRA (Tax Equity and Fiscal Responsibility Act). As a parent, it’s not necessarily a program name that your case manager will bring to your attention, but it is the program working behind the scenes that allows you to get coverage and care for your child while they live at home.
Intellectual and Developmental Disability waivers
Another common type of waiver is the Intellectual and Developmental Disability waiver (I/DD). Even if your state does not engage with TEFRA, it may offer an I/DD waiver.
Eligibility requirements will vary depending on state, but generally you can expect to see a max IQ requirement among the tenets of eligibility.
Supplemental Security Income (SSI) is a benefit your child may or may not qualify for, but regardless, applying for it is likely to be necessary.
If your income is too high, you will be denied because of your resources, but in the process, SSI will certify your child as disabled. Many states require this disability certification before allowing your child onto Medicaid.
ABLE accounts are a positive new addition to the field of disability finance. Enshrined in law in 2014, tax-advantaged ABLE accounts allow the disabled to save for anything they need – from rent money to education to medical care – without losing access to SSI, SNAP, and other government assistance.
Typically, these benefits can be lost if you build up too large of an emergency fund or own too nice of a second car. Not so if you keep that money in an ABLE account.
ABLE accounts also come with tax benefits similar to 529 accounts with a much wider range of qualifying expenses.
Special needs trusts
Movies may have us believe that trust funds are a financial tool for rich kids, but there are many situations in which they can benefit the average American family. Those with disabled children are no different.
One of the biggest concerns with special needs parenting is, “What’s going to happen to my child after I’m gone?” This isn’t just a concern about getting them to their 18th birthday; for some children, you’ll be worried about the cost of care for their well-being for the entirety of their lives.
One tool to address this is a special needs trust, which allows you to allocate a primary caretaker/decision maker and a financial guardian for your child’s inheritance should you be lucky enough to leave one.
That way, you can sleep better knowing that both your child’s day-to-day needs and their finances will be taken care of, even if those roles need to be taken on by two separate people or organisations.
Jumping through new hoops
As my child grows, I’ll be confronted with new programs and vocabulary as we look at college financing and potentially securing both healthcare and employment access. With age comes wisdom and a larger lexicon, but it also comes with a loss of state-administered programs for many of our children when they turn 21.
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