Financial Planning and Public Benefits
By: H. Clyde Farrell, Attorney At Law
For most of us, the need for long-term care is a catastrophic event. It costs far more than our income and gobbles up our savings. Therefore,it is critical to identify and qualify as soon as possible for all benefits that may be needed. Failing to look ahead in this area can lead to needless impoverishment of the whole family. That often can be avoided with careful planning.
Public benefits are divided into two important categories—those that are "means tested" (with asset and/or income maximums) and those that are not (available to anyone with medical need without regard to their finances). This summary will discuss first the benefits that are not means-tested.
Summary of Public Benefits for Persons With Disabilities:
•The following benefits are NOT “means-tested”
(your assets and income don’t matter):
•Social Security Disability Benefits: Monthly cash payments, with amount depending on how much you paid in Social Security taxes while working. Eligibility generally requires working for ten years in employment covered by Social Security, but length of time is less for younger workers.
•Social Security Disabled Child’s Benefits: Monthly cash payments, with amount depending on taxes paid by the beneficiary’s parent who is entitled to retirement or disability benefits. The “child” must be dependent on the parent. If the “child” is age 18 or over, he or she is eligible only if under a disability that began before age 22. Unless the person has such a disability, benefits are available only to age 18 (or 19 for a full-time student).
•Social Security Survivor’s Benefits: Monthly cash payments, depending on amount of Social Security taxes paid by the worker. Required relationship to the worker:
•Surviving spouse of any age, caring for at least one child, under 16 or disabled before age 22, of the deceased worker; or
•Child of the deceased worker who is under age 18 or age 18 and attending school, or over age 18 and disabled before age 22; or
•Surviving spouse or divorced spouse, age 60 or older; or
•Disabled surviving spouse age 50-60.
•Medicare: Pays hospital, physician and other acute-care medical fees, with substantial co-payments and deductibles. Long-term care benefits are limited to intermittent skilled home care for homebound persons, and up to 100 days of skilled care in a nursing home. Eligibility requires:
•Age 65 and eligible for Social Security or Railroad Retirement benefits, or
•Entitled to Social Security and Railroad Retirement Disability benefits, after 24 months of entitlement to cash payments (except for end-stage renal disease and ALS, which have shorter waiting times or none at all.
•The following benefits ARE “means-tested”
(your assets and income must be below certain levels for you to qualify):
•Supplemental Security Income (SSI): Monthly cash payments up to a maximum of $564 if you have no other income that counts. Benefit is reduced dollar-for-dollar by any countable income, but some income (for example, some of your earned income and certain benefits) does not count. Requires a disability or age 65; less than
$552 is countable income for an unmarried individual or $829 for a couple; and less than $2,000 in countable assets if unmarried,
$3,000 for a couple. Your home, one vehicle (with value depending on how used) and certain other assets do not count.
•Medicaid Nursing Home Care: Pays for nursing home care if needed; to the extent your income is not sufficient. Also pays for hospital, physician and other medical expenses to the same extent as SSI- related Medicaid, to the extent they are not paid by Medicare or health insurance. Income limit is $1,692 per month, but this does not apply to income run through a “Qualified Income Trust” (Miller Trust). Countable assets of an unmarried person are limited to $2,000 (not counting the residence, certain vehicles and certain other assets). If the beneficiary is married and the spouse is not in a nursing home or other medical institution, the spouse may keep all his or her income and enough income of the Medicaid-eligible spouse to provide the spouse at home $2,266.50 per month; and the spouse may keep at least half the couple’s assets but sometimes much more, depending on the spouse’s income.
•Medicaid “Waiver” Home Care: Pays for home care, up to the amount it would cost Medicaid for nursing home care for the beneficiary, and prescription medications. Requires a “medical necessity” for nursing home care and a risk of going to a nursing home if home care is not available. Financial eligibility is generally the same as for nursing home Medicaid, except the spouse can almost never keep more than the greater of $18,132 or half the couple’s assets (not to exceed $90,660). In Texas, these programs are always under funded by the Legislature so they develop long waiting lists. Includes the following programs:
•Community Based Alternatives (CBA).
•Community Living Assistance and Support Services (CLASS).
•Medically Dependent Children (MDC).