Creating a financial plan for your child’s care is imperative—so is understanding the do’s and don’ts under the law. What is meant to be a generous or long-term plan could actually disqualify your loved one from government programs, some of which you may not know you qualify for in the first place. That’s why we spoke to disabilities experts to distill some of major laws and programs you need to know to care for your child now and in the future.
Social Security Act Title XVI: Supplemental Security Income
This federal program offers cash to cover your child’s basic needs, before and after turning 18. To qualify for Supplemental Security Income (SSI), your family must have a limited income, and your child must have limited assets. That means a child or young adult named as a beneficiary of a life insurance policy or left an inheritance could be disqualified from these benefits and services. For more information, visit ssa.gov/ssi.
One way to set aside money for your child without making them ineligible for SSI: a special needs trust, also known as a supplemental needs trust. It is designed to hold money for a beneficiary with disabilities and distribute the funds to help them maintain a safe and secure lifestyle—without disqualifying them for state or federal aid. If the trust is properly constructed by a trained professional, your child’s assets should be protected against bankruptcy, creditors, seizures and other legal proceedings. Then the money can be used for things that government benefit programs don’t cover, like recreation or a new pair of glasses.
Achieving a Better Life Experience (ABLE) Act of 2014
Since this law passed in 2014, Texas, like other states, has set up its own ABLE program, which is heralded as a “friendlier” savings option for families who do not have millions to invest in their children’s futures. ABLE accounts allow families to put money away for a beneficiary and allow it to grow on a tax-deferred basis.
Families can invest up to $100,000 in the account without compromising their child’s government aid, says Dennis Borel, executive director of the Coalition of Texans with Disabilities. “It is very broad and flexible, which allows someone to have a savings account for additional medical help, for example,” he explains. Learn more and enroll at texasable.org.
Social Security Act Title XIX and XXI and V: Medicaid, CHIP and CSHCN
Registering your child for state and federal health care aid programs is extremely important, both for your child’s well-being and for your financial security. But understanding how they all work with or against each other is crucial. Here, financial planners can be invaluable. “Even though it seems daunting to tackle your own finances—much less the finances of your child for the rest of their lifetime—it doesn’t have to be ominous,” says Kelly Sauder with Wealth Wave in Plano. “It just takes planning.”
Here are the differences between the three programs, in a nutshell; to learn more, visit yourtexasbenefits.hhsc.texas.gov.
Medicaid provides health care to people with disabilities—including children—depending on the family’s income.
State Children’s Health Insurance Program (CHIP) provides low-cost medical and health coverage to families that earn too much income to qualify for Medicaid, but not enough to pay for private health insurance.
Children with Special Health Care Needs (CSHCN) is designed for children with a medical condition that has physical symptoms (in other words, not a developmental delay or a behavioral disorder) and requires specialized health services. CSHCN is the “payer of last resort,” so first, you have to apply for CHIP and Medicaid to see if you qualify.
Texas Medicaid Waiver Program
Darlene Hollingsworth still remembers how overwhelmed she felt when she first learned of her son’s diagnosis of Down syndrome. Through trial and error, she founded the Clubhouse for Special Needs in Bedford to help others. “I still have families who come here and their kid is 22 years old but they’ve never heard of a waiver,” she says.
So, what is a waiver? Texas Medicaid waivers allow you to use Medicaid to fund your child’s long-term health care needs, which can include personal care, nursing care, respite care, even car and home modifications (installing ramps, for example)—even if you wouldn’t normally qualify. For children or adults with complicated medical issues, especially those without health insurance, these waivers can be life-changing.
One of the first things parents must do after a child receives a diagnosis, Hollingsworth says, is add the child’s name to every program’s “interest list” as soon as possible. While you can always say no thank you to the services provided once your child makes it to the top of a list, it’s crucial to get on the lists early, as the wait can be more than 15 years—meaning you can’t get services right away if suddenly your child needs them.
The waiver programs are under the jurisdiction of the Health and Human Services Commission (HHSC) and the Department of State Health Services (DSHS). When your child’s name reaches the top of a list, the HHSC or the DSHS will review your child’s information to determine whether they meet the requirements for that particular waiver. Meanwhile you can leave your child’s name on other interest lists, though you can’t take advantage of another waiver program—if your child reaches the top of another interest list, you’ll have to choose between the two programs.
Hollingsworth recommends that you enroll your child in the seven programs listed below (as well as CHIP, CSHCN, ABLE and SSI) as soon as you have a diagnosis. “These waivers can mean everything to a family!” she says.
There are seven waiver programs in Texas and, for Hollingsworth, they’re too valuable to be kept secret. “I can’t tell you how often a family will come in and I’ll ask, ‘Are you HSC or Class?’ and they have no idea what I’m talking about,” she reveals. While every program has a slightly different focus, generally they all provide supports like therapy, respite care, employment, medical aids and more. Since the wait may be long and your child’s needs may change over time, experts recommend putting your child on the list for all seven, then leaving it up to the state to determine if they’re eligible when the time comes. Here is a very quick overview:
Community Living Assistance and Support Services (CLASS): For children and adults with a related condition—that is, a nonintellectual disability like cerebral palsy, spina bifida and autism—who live on their own or with family. There are over 200 related conditions listed.
Deaf-Blind with Multiple Disabilities (DBMD): For children and adults who are deaf-blind and have another disability.
Home and Community-Based Services (HCS): For children and adults with an intellectual disability (ID) or a related condition who live with family, independently or in a small group home.
STAR Kids Medically Dependent Children Program (MDCP): For medically fragile children 20 years and younger who qualify to be in a nursing facility.
STAR+PLUS Home and Community-Based Services (HCBS): Home-based managed care for adults 21 and older as an alternative to a nursing facility.
Texas Home Living (TxHmL): For children and adults with an intellectual or developmental disability (ID) or a related condition living independently or with family.
Youth Empowerment Services (YES): For children ages 3–18 years (up to one month before their 19th birthday) with a mental, emotional or behavioral health condition who are at risk of placement in psychiatric inpatient care or state custody care.
Child Support for Adult Children
Sadly, due to the high divorce rate among families living with disabilities, child support is an important part of some parents’ ability to pay for their kids’ care. Under Texas law, once a child reaches the age of 18, child support typically ends; however, an important exception has been made in the Texas Family Code (Tex. Family Code Ann. §154.001) that says child support may continue into adulthood for a child who can’t support themselves. A needs-based assessment can be made to determine the appropriate amount for maintaining your child’s quality of life.
It is important that you begin the proper paperwork before your child turns 18 or graduates from high school. Contact the Special Needs Alliance (specialneedsalliance.org) to find a North Texas–based lawyer who can help—our experts highly recommended that you get legal representation as a judge may require extra provisions.