When the parent of an adult with disabilities retires or passes away, the child may qualify for federal disability benefits, even if the child has never worked. Each month in 2021, the Social Security Administration (SSA) paid an average of $2.8 billion in benefits to 4 million children with retired, deceased, or disabled parents. Understanding how retirement can affect SSDI benefits is crucial.

What is SSDI?

Social Security Disability Insurance (SSDI) benefits are available to the following groups of children and people with disabilities:

  • Minor children
  • Young adults between the ages of 18 and 19 who are full-time students at an elementary or secondary school
  • Adults with disabilities that began before age 22

This benefit, known as the Disabled Adult Child (DAC) program, may allow the child of a retired, disabled, or deceased parent to obtain SSDI payments based on the parent’s earnings record. When a child with a disability receives SSDI benefits from a parent’s work record, this financial support can help the child secure a more stable financial future.

Children who do not have disabilities and/or who have left school no longer receive payments upon reaching the age of majority (in most states, age 18). A person with a disability remains eligible for SSDI in adulthood.

Eligibility Requirements for Children With Disabilities

To qualify for benefits, the disabled child must have developed their disability before turning 22 years old. The individual’s condition must also meet the federal government’s strict definition of “disability” for adults.

While the impairment can be physical or mental, it must be medically determinable, meaning an individual must have a reputable diagnosis. Submitting medical evidence that establishes the impairment is a necessary step in applying for SSDI.

The disability must also be sufficiently severe. One marker of severity is the duration of the impairment. For an individual to receive SSDI benefits, the disability must be long-lasting, either terminal or expected to last at least a year. Those with short-term disabilities, such as accident victims needing several months to recover, will not qualify for benefits.

The impairment must also prevent the individual from performing any substantial gainful activity (SGA). Substantial gainful activity refers to significant physical or mental profitable activities, including full-time or part-time work. If someone can perform part-time work, they may not qualify for SSDI. But, if the disability is significant enough to prevent them from working, they could qualify for the benefit.

Supplemental Security Income (SSI) recipients who started to get benefits when they turned 18 will likely meet both of these requirements and, therefore, will probably qualify for Disabled Adult Child benefits without difficulty.

Those who did not apply for benefits until after they turned 22 must prove to the SSA that their disabilities began when they were younger, an often difficult process since medical evidence is necessary. Demonstrating the date of the disability onset may require contacting past health care providers and submitting dated medical records.

Additional Benefits

Successful DAC applicants may receive higher SSDI benefits than their current SSI benefits. After two years, they will become eligible for Medicare, the federal health insurance program for older adults and people with disabilities.

Effect on Supplemental Security Income

Receiving SSDI benefits could result in the loss of SSI benefits and the automatic Medicaid access that comes with SSI. Since SSDI benefits are often higher than the maximum SSI benefit, it can result in a reduction or elimination of the SSI payment. Per Atticus, the maximum SSDI payment is $3,627 per month in 2023, and the average benefit is $1,358.

The SSA adjusts the SSI payment amount based on the receipt of SSDI benefits. If the disability benefit exceeds the maximum SSI benefit, the individual may no longer be eligible for SSI but may remain eligible for Medicaid.

Individuals who receive SSDI but not SSI may still be eligible for Medicaid if they meet their state’s income and resource requirements for Medicaid. In these cases, beneficiaries may need to apply for Medicaid independently of the SSI process.

Consult With Your Attorney

If you are a parent of a child with disabilities and you are contemplating retirement, or if you are helping the child of a deceased or disabled parent, you should consult with your special needs attorney to see whether the child can qualify for additional benefits. You may also want to discuss the impact of those benefits on your child’s overall special needs plan.

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Contact Us Today

Clancy & Associates, Ltd., is the only full-service special needs planning law firm in Illinois. Our attorneys are dedicated to supporting individuals with special needs and their families. We, too, are parents and siblings of loved ones who have a disability and know how daunting and exhausting it is to go from firm-to-firm and provider-to-provider to find solutions and help.

Each child and family’s needs are very different — and we provide tailored, common sense ideas and strategies that reflects your goals, resources, and hopes for your family’s future security.

Contact us today to schedule a consultation to learn more about our services and talk about your planning needs.

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