Disabled Adult Children

Social Security Disability and Financial Planning

 

Lawyers are not the only ones with clients facing Social Security Disability questions. Financial advisors get these questions, too. Let’s talk about the Wilson Family. James and Ann Wilson are your clients, seeking financial advice for their family. They are healthy and happily married; both now in their mid-60s— James, retired from a pharmaceutical plant, where he worked as a warehouse foreman. Ann, retired from teaching. They are lovely people. James and Ann have an adult daughter with special needs. She has never lived on her own and even with the best therapies, her function is equivalent to that of a 12 year old. James and Ann are now worried: how will their daughter survive once they are no longer there to provide for her? Can she file for Social Security Disability? 

 

If their disabled adult child has worked long enough (generally seven of the last 10 years) and at high enough earnings, then she can file a claim for Social Security disability insurance benefits— Think about situations where disabled adult children worked in a family-, friend-, or faith-based organization’s business, where they were hired due to prior affiliation rather than competitive employment standards. This claim will be filed under the adult child’s own Social Security number (which SSA sometimes calls the wage earner number). 

 

If she has not been able to work, then she will not have accumulated the work credits needed to file a claim for Social Security disability insurance benefits. The exception? If James and/or Ann receive Social Security retirement or disability, then their daughter will be able to file under the parent’s wage earner number. Whether she will ultimately receive benefits will hinge on proving the disability began before she turned 22. (For disabled adult children whose parent is deceased, if that parent worked long enough to qualify for Social Security, then the same exception applies and the adult child can file under the deceased parent’s wage earner number.) 

 

If neither of these situations is true then James and Ann’s daughter may be eligible to file a claim for Supplemental Security Income (often referred to as “SSI”). SSI is means-tested and considers the household’s income and resources. While at first glance, James and Ann appear to provide too many resources to their daughter, consider whether any exceptions apply. Among other things, Social Security will not count property essential to self–support; money saved in an Individual Development Account; health flexible spending accounts; dedicated accounts for disabled or blind children; the first $2,000 of compensation received per calendar year for participating in certain clinical trials; and certain trusts, i.e., special needs trusts and pooled trusts. (Note that money distributed under these trusts will not work against the disabled adult child’s means-tested eligibility to file; however, once the child is found disabled under the law, the money distributed from the trust may have the effect of lowering the amount of the monthly SSI payment.)

 

These are good things to know when advising James and Ann. For more detailed questions or help filing, it is good to talk to an experienced Social Security disability attorney. In North Carolina, my law firm is happy to assist with questions and filing. If you are outside of NC, feel free to reach out to me and I will point you in the right direction.