Navigating the world of public benefits is daunting. The Social Security Administration’s complex regulations leave many parents feeling intimidated and overwhelmed. Other parents report being unaware their disabled children could be eligible for public benefits.
Public benefit programs can provide life-changing support for families, so it is critical that parents become familiar with the basics.
This article will provide a broad overview of public benefit programs and their eligibility requirements along with links to helpful resources for those interested in diving deeper.
The first key distinction in public benefits is between Means-Tested Programs and Entitlement Programs.
Means-Tested Programs exclude people from eligibility if they earn above a certain income or have access to a certain number of resources. The Social Security Administration will test to see if a person has access to means to take care of themselves.
Examples of Means-Tested Programs include Supplemental Security Income (SSI) and Medicaid (called Medi-Cal in California). A person who is eligible for Means-Tested Programs can lose their eligibility if their income or resources rise above a certain threshold.
Conversely, a person can never become ineligible for Entitlement Programs. Entitlement Programs are exactly what they sound like: an entitlement. Examples of Entitlement Programs include Social Security Disability Income (SSDI) and Medicare. For example, billionaire Bill Gates is 65 years old and therefore is entitled to enroll in Medicare even though he does not need it.
Means Tested Programs
• Supplemental Security Income (SSI)
• Medi-Cal (Medicaid)
• In-Home Supportive Services (IHSS)
• Food Stamps (SNAP)
• Section 8 Housing
• Social Security Disability Income (SSDI)
• Childhood Disability Benefits (CDB)
Supplemental Security Income (SSI) is one of the most important public benefits for people with disabilities. If a person is eligible for even $1 of SSI, they are automatically eligible for Medi-Cal. Oftentimes, enrolling in SSI is the easiest way to get on Medi-Cal. This is why SSI is sometimes called “the gateway benefit.” SSI comes in the form of a monthly check designed to help pay for the living expenses of a person who is disabled. The amount of SSI a person receives can change depending on legislation, but as of 2021 the maximum monthly SSI payment for an individual is $910.72.
The system the Social Security Administration uses to determine whether someone is eligible for SSI is somewhat complicated, but essentially, they are looking to see if an applicant is “disabled” and of limited financial resources. “Disabled” under the Social Security Administration’s definition means an adult is unable to participate in “substantial gainful activity” (i.e., unable to earn more than $1,310/month due to their disability). A child has a disability if a child has “impairments that cause marked and severe functional limitations” that can be expected to last more than 12 months.
Once the Social Security Administration determines an applicant meets their definition of disabled, they will then evaluate that person’s financial situation. The Social Security Administration will look at a person’s resources and income (or in the case of a child with disabilities, their household’s resources and income).
A resource is a fixed asset like a home or a bank account. As of 2021, an individual SSI applicant cannot have more than $2,000 in resources to be eligible. Although that number may seem low, there are exemptions for expensive assets that will not count towards an applicant’s eligibility. For example, an applicant’s primary residence is an exempted resource as is their primary mode of transportation (e.g., an automobile). Placing resources into a Trust or an ABLE Account will also cause them to be exempt for public benefits purposes.
Next the Social Security Administration will look at an applicant’s (or the applicant’s family if they are a child) income. The Social Security Administration will apply a formula which reduces the SSI payment relative to income. The formula is too complex to explain in a blog post, but here is a helpful resource to give you a better idea of how it works.
The bottom line: as long as an applicant is eligible to receive even just $1 of SSI, they are automatically approved for Medi-Cal.
Healthcare is expensive. Healthcare for people with a disability is even more expensive. Many families simply cannot afford to pay out of pocket or even for the insurance policies that cover the treatment that their loved ones depend on. The US Federal Government implemented the Medicaid program to help families with limited financial means get access to healthcare. Medi-Cal is California’s version of the Federal Medicaid program. Medi-Cal/Medicaid pays for primary medical care such as doctor visits or prescription medication, ongoing care and recovery such as physical therapy, as well as other medical related costs like medical equipment.
A person can become eligible in one of three ways. As mentioned above, a person is “categorically eligible” for Medi-Cal if they receive any SSI payment. A person can also qualify for Medi-Cal by showing they have a “financial hardship.” To have a financial hardship, an adult applying for Medi-Cal must show their household earns below 138% of the Federal Poverty Limit. The size of the household will determine the annual income required to qualify. A child applying for Medi-Cal has a financial hardship if their household earns 266% below the Federal Poverty Limit. Finally, a person can qualify for Medi-Cal if they are “medically needy” meaning they are disabled and unable to afford their medical care on their own. However, unlike the other types of Medi-Cal, “medically needy” Medi-Cal recipients will still pay a share of cost each month.
Once the Department of Healthcare Services determines a person is eligible for Medi-Cal, that person will be required to enroll in a Medi-Cal program like Covered California or L.A. Care. Medi-Cal programs function as health insurance policies. Some doctors will accept one type of Medi-Cal program but not another, so it is important to research which program is the right fit for the patient’s needs.
Public benefit programs are complex. While we have covered a lot in this blog post, we have only scratched the surface.
The important takeaway is these programs exist and can provide life-changing support to people with disabilities.
Doing your own research online is a good first step for becoming familiar with public benefit programs but speaking with a professional such as an attorney or financial planner with experience with disabilities is the best way to learn how public benefit programs can help care for your loved one with a d.
Jordan Parr is an attorney specializing in trusts and estate planning at Cox Law Group, Inc. in Torrance, CA. He is a board member of the National Academy of Elder Law Attorneys, Southern California chapter. In his free time, Jordan likes working out with kettlebells, but most of all, he loves long walks on the beach with his wife Cait, a PT at NAPA.