For families with special needs children, Medicaid and SSI are two programs that provide crucial benefits. While many people associate Medicaid with government-funded nursing home care, the program encompasses far more than this. Medicaid is the nation’s primary health insurance program for low-income and high-need Americans, including children and pregnant women living under the federal poverty level. It covers 60 million low-income Americans, including nearly 30 million low-income children. The federal government and the states jointly fund the program, and the federal government sets minimum eligibility levels for coverage. Medicaid is a program where eligibility is based on income and resources. So, when a special needs child turns 18, these benefits become available if the child is unable to work and has minimal resources. Accordingly, the child of a family that has financial resources would still be eligible for Medicaid once the child turns 18, provided the child has no significant income or resources.
The income eligibility limit for community Medicaid is gross monthly income equal to or less than $903 (the first $20 per month of income is excluded). Income includes, but is not limited to, Social Security income, veterans’ benefits, pensions, annuities, interest, dividends, and payments from trust funds, and rental income from real property. The current Medicaid resource maximum for an individual is $4,000. Countable resources include, but are not limited to, bank accounts, property other than principal residence, stocks, bonds, certificates of deposit, annuities, and cash surrender value of life insurance, which exceeds $1,500 in face value. Certain assets such as a principal residence, burial spaces, one automobile and one wedding and engagement ring are excluded.
While Medicaid provides health insurance benefits, Supplemental Security Income (SSI) provides supplemental income to people with low income and limited resources who are 65 or older, or blind or disabled. If an individual is deemed eligible for SSI, he or she will also receive full Medicaid benefits. For families with special needs children, a child under 18 can qualify for SSI if he or she meets Social Security’s definition of disability for children, and if his or her income and resources fall within the eligibility limits. However, for a child under 18, the Social Security Administration considers the income and resources of family members living in the child’s household. To be considered disabled, a child must meet the following requirements:
- The child must not be working and earning more than $1,010 a month in 2012.
- The child must have a physical or mental condition, or a combination of conditions, that results in “marked and severe functional limitations.”
- The child’s condition(s) must have been disabling, or be expected to be disabling, for at least 12 months; or must be expected to result in death.
When a child receiving SSI turns 18, Social Security reviews the child’s medical condition, because the rules for determining disability for adults are different than for a child. It makes sense for parents whose child is not receiving benefits to reapply for SSI upon the child turning age 18. Social Security does not count the income and resources of family members when determining SSI eligibility for someone 18 or over. So, a child previously deemed ineligible for SSI due to a parent’s income or resources might be entitled to benefits upon turning 18.
In New Jersey, SSI recipients’ maximum amounts (assuming no reductions for other income) are:
2012 Total Monthly Payment
- Person living alone or with others in own household – $729.25
- Person living with spouse who is not eligible for SSI – $851.00
- Person living in someone else’s household and receiving support and maintenance – $509.65
- Person living in licensed residential health care facility – $908.05
- Person living in public general hospital or Medicaid-approved long-term health facility – $40.00
- Couple living alone or with others in own household – $1,073.36
- Couple living in someone else’s household and receiving support and maintenance – $791.76
- Couple living in licensed residential health care facility – $1,786.36
An important point for families with special needs family members to remember is that the receipt of income or resources by a child receiving SSI and/or Medicaid could result in the child becoming ineligible for benefits. This reality prompts many families to create special needs trusts. These trusts allow assets to be accumulated for the benefit of a family member with special needs without causing a loss of these key benefits.