A developmental disability is a type of condition that affects a person’s physical, language, behavioral, or learning abilities. According to the CDC, roughly 17% of children ages 3 through 17 have a developmental disability. Examples of developmental disabilities include autism, ADHD, and intellectual disabilities.
What are the financial challenges of having a developmental disability?
People with developmental disabilities face a lot of the same challenges as any of us do with our finances. However, there are specific challenges that need to be understood so that we can find pathways to financial health and empowerment.
Application for Disability Benefits and Appeals Process
Most applications for Social Security Disability Benefits begin at your local Social Security office, though an application can also be started online or over the phone. Before applying, a person should try to collect their work history from their last five employers, their medical treatment information, and medical records. From there, the Disability Determination Service (DDS) will assess if a person qualifies for benefits based on the severity of the medical condition. DDS will first work with a person’s medical team to reach a determination, but the DDS could administer a consultative exam to make a conclusion on a person’s eligibility. Overall, the application process could take anywhere from a couple months to a couple years. During the application process, it is wise to keep records of all communication with Social Security, including using certified mail to confirm paper documents are received.
There is also the consideration of a denied application or only partially approved. Approximately 60%-70% of initial applicants are denied. Every applicant has the right to appeal this decision, and can hire a Social Security Disability Attorney or Advocate. Each can charge no more than $6,000 for their services.
Social Security Income (SSI) Asset Limits
To receive SSI, a person’s resources should not exceed $2,000 for an individual or $3,000 for a couple. This asset limit does not include a primary home, one primary vehicle, household goods, life insurance policies a person owns with a combined face value of $1,500 or less, burial plots, savings of $1,500 each for the person and their spouse’s burial expenses, property you or your spouse use in a trade or business, money or property you have set aside under a Plan to Achieve Self-Support (PASS) if you are disabled or blind, and up to $100,000 of funds in an Achieving a Better Life Experience (ABLE) account established through a State ABLE program.
However, even with these exclusions, people with disabilities face undue financial hardship and limitations that are put on them simply because they have a disability. This requires a change in policy to rectify this inequity.
Underemployment, job discrimination, and low wages
According to The Arc, a nonprofit dedicated to developmental disability advocacy, people with developmental disabilities have historically been subject to low societal expectations, which leads to job discrimination and low wages. Furthermore, the asset and income limits placed on people receiving public benefits related to their disability disincentivize work.
Adaptive Equipment and Modifications
Adaptive equipment like wheelchairs, hearing aids, and accessible technology aids are just as crucial as medical treatment to some people with developmental disabilities. However, adaptive equipment and modifications can be extremely cost prohibitive. Insurance companies often don’t consider adaptive equipment a “medical necessity” even if it is required for things like sleeping, movement, and communication. Additionally, the companies that manufacture these products can charge extremely high prices. While there are loan programs to help families with this cost, it can be frustrating that prices are so high in the first place.
Scams to Watch Out For
Unfortunately, there are bad actors that look to take advantage of people with developmental disabilities, especially through the guise of being a Social Security representative. Through working with a Trainer at the Financial Gym, we can be a third party to review any financial products or talk through any life decisions that could be potential scams.
What are the financial opportunities for people with developmental disabilities and their families?
To work within the government imposed asset limits, people with disabilities have access to these savings tools and empowerment resources.
One is an ABLE, or Achieving a Better Life Experience, a tax advantaged savings account available to people who became disabled before 26. An ABLE account allows a person with disabilities to save $16,000 as of 2022 while receiving public benefits. This account is designed to be used for Qualified Disability Expenses (QDEs) such as education, transportation, job training, housing, and more.
ABLE accounts can also be invested, and changes can be made to the investments twice a year. However, only $100,000 of the funds in an ABLE account are protected from the SSI Asset Limit, so it is important to keep tabs on the account balance. Once the account reaches $100,000, SSI benefits are suspended until the account is back down under $100,000.
Another tool available to people with developmental disabilities is a PASS, or a Plan to Achieve Self Support. A person can apply for a PASS through the Social Security Administration (SSA). If approved, any money used in connection to achieving your PASS will not be counted towards your SSI Asset Limit. Goals could include work, business, or education goals.
Special Needs Trusts
Special Needs Trusts (SNTs) are a legal tool that can help people with disabilities reach their financial independence goals while still protecting their SSI, Medicare, and Medicaid eligibility. Trusts need to be administered by a Trustee who acts in the beneficiary’s best interest, meaning they have a fiduciary relationship.
These Trusts can be either a First Party Special Needs Trust or a Third Party Special Needs Trust. A First Party SNT is funded by the person with the disability and can be established by a first party (the person with the disability, their parents, grandparents, or the courts). This type of SNT would need to be created before the beneficiary turns 65. A Third party SNT is funded by anyone other than the beneficiary of the Trust, being the person with a disability. It has no age limit.
There are also Pooled Special Needs Trusts, which are managed by a non-profit and professional trustees.
Healthcare is another huge consideration that deserves lots of attention; stayed tuned for our blog post on Healthcare considerations for people with developmental disabilities.
Finally, disability benefits recipients who are actively looking for work can get free counseling about job coaching, job counseling, training, benefits counseling and job placement through Ticket to Work, a program through the Social Security Administration.
How the Financial Gym Can Help
At the Financial Gym, we believe everyone one deserves quality financial training that is affordable and holistic. Life with a developmental disability presents challenges and opportunities during a financial journey, and having a Financial Trainer can help one face it head on.
The Financial Challenges and Opportunities for People with Developmental Disabilities is written by The Financial Gym Team for financialgym.com