A Milestone for You and Improved Benefits for Your Disabled Adult Child[1]

There are milestones in every life, and turning 18 is a significant one. For parents of children with disabilities, there are some unique decisions to make, including whether to file an application for Supplemental Security Income (SSI). Until age 18 your child was probably ineligible for SSI because your income and assets were being “deemed” to them. Now only the child’s income and assets are considered to determine financial eligibility for SSI. [2]

Upon approval for SSI, your child is automatically eligible for Medicaid (called MaineCare in Maine). The Medicaid benefit is often more valuable than the monthly SSI income. It is more than medical insurance and is often the payment source for important supports and services relied upon by that individual with disabilities (e.g. housing, supported employment, day programs, case managers).

But this article focuses on a milestone you probably can’t imagine on your child’s 18^th birthday: the day when you retire, become disabled, or die. At that point, your child will likely be eligible for a monthly benefit based on your work history: the Childhood Disability Benefit (CDB). Even though this is a benefit for an adult – and often an adult in midlife – it is called a “child’s” benefit because it is based on the parent’s Social Security earnings record.

The CDB payment for your child will be calculated from the parent’s primary insurance amount. If the parent is alive and receiving Social Security disability or Social Security retirement, the child is entitled to a CDB equal to 50% of the parent’s benefit. If the parent has died, the CDB increases to 75%. If the CDB is higher than the SSI maximum federal benefit (only $794 in 2021), the SSI benefit will be terminated and replaced by the CDB.

Once CDB is approved, your child will be eligible for Medicare after a 24-month waiting period from the date your child was first eligible to receive CDB.

The following criteria apply:

• An application for CDB must be filed with the Social Security Administration.
• The adult child must meet the definition of “disabled” applicable to all applicants for the Social Security disability insurance (SSDI).
• The adult child must have a disability that began before age 22.
• The adult child must be single or married to someone who is a Social Security recipient (but not an SSI recipient).

If a disabled adult child loses eligibility for SSI when CDB begins, they will often continue to be eligible for Medicaid in addition to the new Medicare coverage. Eligibility for Medicaid continues because the additional CDB income is excluded from countable income for Medicaid eligibility. (Asset criteria still apply. In Maine, that means having less than $10,000 in countable assets.[3])

As you approach the milestone of retirement – and beyond – keep the Childhood Disability Benefit in mind. The potential for an increased cash benefit plus Medicare coverage are significant, especially when these additional benefits will not result in the loss of Medicaid for your disabled adult child.

[1] As used in this article, the terms “Disabled Adult Child” and “disabled” reflect the language in the Social Security Administration’s Program Operations Manual System for individuals who meet the SSA’s criteria for benefits.

[2] Does your child have more than $2,000 in his or her own name, possibly from accumulated birthday and holiday gifts, or maybe held in an UTMA account? Call us before you apply so we can explain legitimate opportunities to protect any excess assets and establish financial eligibility for SSI.

[3] Our firm regularly works with clients to maximize all resources for an individual with a disability while protecting eligibility for means-tested public benefits like SSI and MaineCare.