Financial planning is an important part of life for everyone, but it can be especially challenging for people with disabilities. Sixty-one million adults in the United States live with a disability, and approximately 7.2 million students ages 3 to 21 served under the Individuals with Disabilities Education Act during the 2020-2021 academic year, accounting for 15% of all students. If you or a loved one is living with a disability, there are a few key things to keep in mind when financial planning.
Understand Your Financial Options
If you have worked previously (paying into social security) or have personal wealth, your options will look different than someone who has never worked. Likewise, different financing options are available depending on your current income and assets, veteran status, age, and disability type.
Programs for People with Disabilities
As you look at all your financial options, you may want to consider government assistance options as well as private programs and loans designed to help people with disabilities.
Social Security Act (SSA) Benefits
Social Security Act (SSA) benefits are eligible to those who have worked previously but are unable to work due to a severe medical condition or disability that is expected to last at least one year or is terminal. Benefits are based on your previous work history and are not limited by personal wealth.
- Meet the definition of disability with all necessary documentation
- Be unable to work for a year or more because of your disability
- Financed by employer and wage contributions
- No income limit
- No resource limit
- Must have enough work credits
- Provides benefits to eligible family members
- Benefit amount based on average lifetime earnings
- Other income does not affect benefits
- Where you live or who lives with you does not affect your benefits
Social Security Income (SSI) Benefits
Social Security Income (SSI) benefits are for those who have never worked due to a disability, do not meet SSA requirements, and are based on your level of need. SSI benefits have strict income limits and are generally utilized by impoverished persons.
- Meet the definition of disability with all necessary documentation
- Be unable to work due to your disability
- Do not meet the requirements for SSA benefits; often due to a lack of work history
- Strict income limit
- Strict resource limit
- Does not provide benefits to family members
- Where you live and who you live with may affect your benefits
Medicare is a health insurance program for people 65 years of age and older and some disabled people under 65 years of age. Medicare has multiple parts. Part A covers inpatient healthcare, including hospital stays, skilled nursing facilities, hospice, lab tests, surgery, and home health care. Part B covers outpatient care, including doctor visits, durable medical equipment, home health care, and some preventive services.
Medicaid provides health coverage to eligible low-income adults, children, pregnant women, the elderly, and people with disabilities. Millions of people use Medicaid, which is administered by states according to federal requirements. The program is jointly funded by states and the federal government.
ABLE Savings Accounts
ABLE (Achieving a Better Life Experience) savings accounts are tax-advantaged accounts available to disabled people and their families. Millions of individuals with disabilities and their families depend on a wide variety of public benefits, including income assistance, food, housing, and healthcare. Eligibility for these programs is often based on means or resource tests that require participants to remain poor – having less than $2,000 is savings or liquid assets. ABLE savings accounts allow people with disabilities to save money without affecting their eligibility for SSI, Medicaid and means-tested programs such as FAFSA, HUD, and SNAP/food stamp benefits.
Help for Veterans with a Disability
Benefits are available to veterans with disabilities caused by their military service. Veterans who meet certain requirements are eligible to receive tax-free monthly payments via VA disability benefits as well as assistance with a wide variety of needs, including disability compensation, transportation allowances, housing costs, food and clothing, insurances assistance, education, caregiver support as well as:
- Lifeline Phone Services
- VA.gov Prescription Assistance
- The National Association of American Veterans Emergency Assistance
- Operation Family Fund
- American Legion Temporary Financial Assistance
- Vantage Mobility International Operation Independence
- Luke’s Wings
- Recycled Rides
- Wounded Warrior Project
Income assistance rates for veterans will vary depending on condition and family status. The VA rates the severity of a disability from 10% to 100% and adjusts benefits accordingly. For example, in 2021, a disabled veteran that is married with one child and has a 50% disability rating received $1,056 a month. A veteran with a 70% disability rating who is married with two children received $1,717 a month. This disability calculator provided by the VA can help you determine your benefits.
Help for Children with a Disability
In addition to SSA, SSI, SNAP food assistance, and tax benefits for families with disabled children, there are a variety of other programs designed to assist with their unique needs.
- Temporary Assistance for Needy Families (TANF), which is administered through state governments and provides financial help for immediate living needs.
- SNAP, formerly food stamps, provides money for food.
- Children’s Health Insurance Program (CHIP), provides help for medical bills for parents who don’t qualify for Medicaid.
- Easter Seals – Provides a variety of services and resources for children and adults with disabilities. The website has a form in which you can find services in your area.
- The M.O.R.G.A.N. Project – Connects parents with resources and information, as well as provides financial assistance for travel related to medical care, medical equipment, and more.
- The Federation for Children with Special Needs – Provides support, resources, education, information, and assistance for families with special needs and disabled children.
- Parker’s Purpose Foundation Assistance – Provides grants up to $1,000 for a family in immediate financial need because of medical expenses who has a child with a life-threatening illness or disability. Ohio residents get priority, but those from other states who are eligible can still get a grant.
- First Hand Foundation. Provides financial help for medical expenses for those experiencing an immediate need.
Help for Adults with a Disability
Additional programs are available to help adults with disabilities understand their benefits, find care, and get the most out of programs like Medicare and Medicaid.
- National Council on Aging Benefits Checkup provides information on benefits for seniors with disabilities and others over 65.
- Program of All-Inclusive Care for the Elderly (PACE) provides Medicaid and Medicare-covered home care for those over 55, allowing them to stay in their homes. It’s free for Medicaid patients and fee-based for those on Medicare.
- Area Agencies on Aging designated agencies on aging coordinate Meals on Wheels deliveries, provide resources and help for seniors, as well as classes and activities.
- The U.S. Administration on Aging Elder Locator connects seniors to resources in their community, including housing, transportation, health care, financial help, and more.
Government and Private Grants
- The Department of Housing and Urban Development (HUD) offers programs funded by grants that assist people with disabilities in getting housing vouchers, rental assistance, buying a home, and making homes accessible.
- The Foundation Center helps people with disabilities find grants from $1,000 to $25,000 for individuals with mental, physical, or sensorial disabilities.
- The federal government provides grants for disabled people starting a business.
- Check with your town, city hall, or local department of health to find local community agencies that offer grants for people with disabilities who need help to pay household expenses. Local social service programs can provide money for groceries, utilities, transportation, as well as vocational rehabilitation.
Loans for People with Disabilities
The Equal Credit Opportunity Act prevents lenders from discriminating against you just because your income comes from public assistance.
Work with a Financial Planner that Specializes in Disabilities
Financial planning is difficult for everyone, but it can be especially complex for people who have disabilities. The financial options available are numerous and complex. Financial advisors and lawyers who specialize in financial planning for disabilities can help you navigate your options to ensure you get the most out of them.
Manage Your Debt
Debt can derail your financial plans and make it difficult to plan for the future. If you are struggling with credit card or unsecured debt, resolving the debts for less than you owe may be a good option for you. Speak to a Consolidation Specialist to find out if debt resolution could lower your monthly payments and get you out of debt faster.