Special Needs Planning Shouldn’t be an Afterthought

Photo by Glenn Carstens-Peters on Unsplash

Ellen Cookman is an attorney whose practice specializes in Estate Planning and helping families set up Special Needs Trusts. Five years ago, Cookman’s profession touched her directly when her older son, now nine, was diagnosed with autism.

“I went from being an advocate to a parent,” said Cookman, who gravitated toward the field of special needs planning while attending a presentation on the topic. She recalls thinking, “I could work in the field and support a family and really make a difference in the community.”

Coming from a family of teachers and lawyers, including a father who worked for the ACLU (American Civil Liberties Union), public service ran deep.

Today, with 38 million Americans (1 in 10) living with a severe disability, according to Social Security Administration data, the need for public assistance and special needs planning has increased exponentially. 

Cookman describes this population as an invisible group, and it’s why understanding public benefits and how to obtain them is critical for individuals with severe mental illnesses. 

Even if the family has means, Cookman emphasizes, the individual should apply for public benefits if deemed disabled if for no other reason than to help retain the family’s own resources as long as possible. Providing continuous medical and wraparound care for a family member with a severe mental illness can quickly diminish a household’s income and resources.

Still, the road to public benefits—healthcare and income streams—is no simple task. The results don’t often make sense, Cookman said. Families need to know how to navigate the system. Even then, “it depends” on each person’s situation, she said.

Definitions and Rules
Individuals with severe mental illness may qualify for Supplemental Security Income (SSI) or Social Security Disability Income (SSDI) depending on the circumstances. In both cases, however, the definition of being disabled is the same.

Cookman said it’s important to understand that the definition is more than just a diagnosis. A person with a bipolar disorder diagnosis may be working and supporting herself. If this is the case, the person may not be able to claim benefits. Individuals must have a diagnosis and also be “physically and mentally impaired for 12 months or longer that prevents the person from engaging in substantial gainful employment” to meet the definition of being disabled. The person is then deemed eligible for public benefits, Cookman said.

If the individual passes this hurdle, they may qualify either for SSI or SSDI. 

Qualifying for SSI
In the case of SSI, the benefits are needs based. This means the person must be poor with resources no greater than $2,000. Assets such as a home, car, and life insurance do not count toward the $2,000 limit; however, bank accounts, stocks, and receiving an allowance do and it can’t exceed $2,000. If that happens, the person does not qualify, or Social Security will stop paying SSI income. 

If the individual passes hurdle number two, the person could receive up to $1,040 a month as of 2022. The individual will also qualify to receive Medi-Cal—the state’s public health care program. If the disabled child qualifies for Medi-Cal, then he or she may qualify for In-Home Supportive Services (IHSS), which pays for a caregiver to help with the disabled person’s “Activities of Daily Living,” Cookman said. A parent can even be paid as a caregiver through IHSS, depending on the circumstances.

Currently, the person’s resources under Medi-Cal also cannot be greater than $2,000, but that eligibility rule is about to change in July 2022. The resource limit for Medi-Cal recipients increases from $2,000 to $130,000, and in January 2024, the resource cap goes away completely, Cookman said. This is only happening in California. But SSI recipients still need to stay at the $2,000 resource cap even though the Medi-Cal limits are going up.  

Individuals who receive SSI can still work part-time, Cookman said. For example, if the recipient earns $365 a month, the first $65 is not counted, then the remainder reduces SSI one dollar for every two dollars of earned income. So, if a person’s SSI check is reduced by $150, that individual can still receive up to $890/month from SSI, which totals to $1,040.

Qualifying for SSDI
Other individuals may be able to receive SSDI. This benefit is considered an entitlement, which is based on the amount of time a person has worked. The $2,000 resource cap is not a factor. These benefits can also be received through a parent’s work history. If a parent is collecting social security benefits as of age 62 or older and the child was disabled before age 22, that child can receive 50% of the parent’s social security benefits. For example, if a father is receiving $2,000 a month in social security benefits, the child would receive $1,000 per month for a total household income of $3,000. 

Cookman said that upon the death of the parent, the SSDI benefit will increase to 75% of the parent’s social security benefit. Using the example above, this would mean the recipient receives $1,500 per month. 

After two years and five months under SSDI, the child—even though he or she is not 65—will qualify for Medicare and receive healthcare coverage through the federal government. 

In some cases, individuals might be eligible for healthcare coverage under both Medicare and Medi-Cal simultaneously, which Cookman said is “affectionately nicknamed Medi-Medi.” This can be beneficial since Medicare and Medi-Cal offer different services and coverage.

Challenges of the System
Unfortunately, a major issue with SSDI benefits is the age benchmark. Many people in the mental health community are not diagnosed with a severe mental illness until after age 22. This makes the person ineligible for SSDI benefits unless they have worked a sufficient number of quarters to apply for SSDI independently, not through a parent. 

There’s also another part of the system that can trip the applicant up. Individuals who apply for either SSI or SSDI are often denied the first time, only 40% are approved, Cookman said. But persistence can pay off. If the person appeals, the odds of approval go up to 50%.

“If at first you don’t qualify, appeal and appeal again,” Cookman said.

Cookman is candid about the public benefit system. She said getting benefits is not easy it’s very complex work. “I think [the government] makes it difficult so you will give up and just not get approved,“ she said. 

This is exactly what she doesn’t want to see happen. She doesn’t want individuals who rightly deserve those benefits to be denied. That’s why she makes sure everyone knows what to fight for and how to succeed.