Home Finance A Financial Guide for People with Disabilities and Their Families

A Financial Guide for People with Disabilities and Their Families

Everyone has to plan for financial success, but it is especially difficult for families with disabled members. Although there are many financial options available for those with disabilities, it can be difficult to navigate all of the various accounts and benefits. Although the cost of a disability can vary depending on its severity and type, there are many high-cost conditions that families may not be prepared to pay for.

Feeling alone can make it worse. You are not alone but keep your sanity. Nearly 9 million Americans care for children with disabilities at any given moment. Many of these families face financial hardships.

The average cost of autism in childhood is $60,000, with adult services expected to reach $461 billion by 2025. According to U.S. Centers for Disease Control and Prevention (CDC), the lifetime cost of cerebral palsy for an individual can exceed $1.5 million after inflation.

This guide will help you plan your financial future. We’ll be focusing on the four most important financial topics if you have a disability. These include making sure you get the right amount of benefits, Achieving a Better Life Experience accounts, supplemental need trusts, and Medicaid waivers.

There will likely be questions as each person’s situation is different. The federal government has many resources available, including programs and services that can help you with your disability. The Special Needs Alliance can help find an attorney if you have questions.

The Key Takeaways

  • You have many federal and state benefits if you care for a child with disabilities. These benefits are not guaranteed to stop once the child turns 18.
  • 2014 Achieving a Better Life Experience Act (ABLE) created ABLE accounts. Generally, funds in an ABLE account do not count towards an individual’s eligibility to receive federal or state benefits.
  • Supplemental needs trusts do not have any restrictions on the amount you can set aside for expenses related to disability. However, they are more expensive to set up than ABLE accounts and can be difficult to manage.
  • Families with a disability should check to see if they qualify for a waiver for home and community-based services. This Medicaid waiver allows states the ability to care for people with disabilities in their community rather than placing them in institutional care.


You have many federal and state benefits if you care for a child with disabilities. These benefits are not guaranteed to stop once the child turns 18.

Juliana Crist is a senior consultant at AKF Consulting. She advises municipalities on state-run investment programs. According to Crist, three benefits are most important to families: Supplemental Security Income, Social Security Disability Insurance, and Medicaid. The official U.S. government website about disability services has a lot of information that can help you and your family find out more.

SSI is the most important benefit for families who care for disabled children. The program pays monthly benefits to those with low incomes and limited resources. If a child is under 18 years old, they can be eligible if their medical condition (or a combination thereof) meets the Social Security Administration’s definition of disability. To be eligible for this program, a young person must have income and resources that are within the eligibility limit.

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A child with a disability who reaches 18 years old is considered an adult. Your family’s eligibility for disability benefits will be affected.

SSI can be continued by some adults. The amount they receive could change. The reason is that the SSA does not count the income or resources of their family members, except their spouse when determining if they are eligible for SSI. The SSA also applies the adult disability rules, which may be slightly different. The SSA will examine a person’s medical history in all cases. This usually happens within one year after they turn 18. In certain cases, a person may be eligible for SSI even if they didn’t qualify before turning 18.


The SSA offers an online calculator that will help you determine how much SSI you’re entitled to as a family member and allow you to apply online for them.

ABLE Accounts

There are limits to how much money and other assets you can have while still being eligible for public benefits like SSI or Medicaid. Prior to ABLE accounts, individuals who received SSI couldn’t have more than $2,000 worth of countable assets (or $3000 for a couple). This would have a negative impact on their SSI benefits. The ABLE program was created to help disabled people save money and not compromise their benefits. The majority of funds in an ABLE account don’t count towards an individual’s eligibility for these programs.

ABLE accounts have had many benefits for people with disabilities. A spokesperson from the ABLE National Resource Center stated that people who use the accounts are more likely to be savers than spenders. People with disabilities can save more through ABLE [or] employment and are often able to hear for the first time that they’re allowed to work. SSA encourages people with disabilities to work to the best of their ability and to save money to improve their lives.

This is how it works: An ABLE account allows disabled people, their family members, and friends to invest money. Although contributions are not tax-deductible, some states allow for deductions from income taxes. The account’s funds are tax-free. The FDIC covers cash funds in an ABLE account deposited to an FDIC-insured institution for up $250,000.

They can only contribute $16,000 per year through 2022. A person may only have one ABLE account. The money can be used in an ABLE account. You won’t need to pay taxes if you use it for qualified disability expenses. The Tax Cuts and Jobs Act 2017 allows individuals who work to contribute more than the annual limit. The ABLE to Work Act allows a beneficiary of an ABLE account who is not enrolled in an employer-sponsored retirement program to contribute up to $16,000 plus the lesser of either the federal poverty limit for the previous year ($12,880 2022) or the account owners’ compensation for the year.

There are no active ABLE programs in four states: Idaho, North Dakota, and South Dakota. You should register with a state program that allows outsiders if you reside in these states. Some states do not allow residents to open ABLE accounts. There are also different fees and limits depending on where you live.

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Crist of AKF Consulting says that when it comes to choosing an ABLE plan, you should start in your home state. Many states offer tax incentives and other benefits, such as Medicaid clawback exemptions. Taxpayers could lose out on these benefits if they choose an out-of-state plan. Crist says that other important considerations include cost and ease of use, investment options, and functionality, as well as debit card functionality.


Not all states offer ABLE programs. However, regardless of where you live you can open an ABLE Account in any state that allows outsiders to join their program.

Trusts for Supplemental Needs

ABLE accounts and supplemental trusts (also known as special needs trusts), allow people with disabilities, or their families, to save money and not affect their eligibility for public benefit. This could only have been done before 2014.

ABLE accounts are simpler to set up and easier to manage. However, they come with some disadvantages–primarily, limits on the amount of money that you can save each year. Although supplemental needs trusts do not have such limitations, they are more expensive to set up and can be difficult to manage.

You can only use the money from a supplemental need trust for a restricted range of expenses. These funds are not meant to be used to pay for basic living expenses. This trust is used to pay for transportation costs, medical expenses, and payments for caretakers.

It is a smart idea to create an ABLE account if you or a loved one are eligible. It will protect the rights of disabled people, make it easier to track expenses, and give you tax benefits immediately.

The main reason to set up a supplemental trust today is to put aside more money than the ABLE account allows, which can be as high as $100,000, without affecting public benefits. Or to contribute more than $16,000 annually to your disability-related accounts. It is a good idea to hire an attorney to help set up a Supplemental Needs Trust.

You can still use your ABLE account even after setting up a supplemental need trust for qualified disability expenses. These are common, everyday expenses such as food, housing, and education.


Supplemental needs trusts are used to cover additional expenses not covered by public benefit. The money in an ABLE account can be used to cover a wider range of expenses such as basic living costs, education, food, and transportation.

Medicaid Waivers

A Medicaid waiver allows the federal government to exempt the Medicaid program from the rules normally in place. States choose individuals with special needs or health conditions to use waivers to allow them to be eligible for Medicaid. There are hundreds of Medicaid waivers in place across the country. Medicaid has a complete list on its website.

The most important type of waiver for most people is the waiver that covers home and community-based service (HCBS). An HCBS waiver allows states to provide care in the community for certain people, instead of placing them in institutional care. This applies to both elderly and disabled people.

Accepted into the state’s HCBS program will be provided with a variety of medical and non-medical care. This can vary depending on individual needs and state guidelines.

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These could include:

  • Personal care and supervision at home or in assisted living facilities
  • A home health aide
  • Nursing
  • Equipment and supplies for medical use
  • Homemaking and chore services such as cleaning, laundry, and shopping
  • Hot meal delivery services
  • Respite care is provided to help relieve the primary caregiver
  • Counseling services
  • To increase independence, you can make modifications to your home and/or vehicle, like safety rails or ramps.
  • Assistance and case management
  • The transition from a nursing facility to the community
  • Access to adult group daycare or senior centers
  • Transport to and from non-emergency medical appointments
  • Services for non-medical transportation
  • Emergency response systems for personal emergencies

Katie Beckett Waiver

A type of Medicaid waiver is the Katie Beckett Waiver. Sometimes called TEFRA Medicaid, it’s also known as TEFRA Medicaid. This is an important type of Medicaid waiver that families with disabilities will be able to use. It provides individuals under 19 years old with care at home for serious medical conditions.

The waiver’s financial eligibility is determined only based on the income and assets of the child, not the parents. There is no waiting list for “Katie Beckett” as states can’t limit how many participants they allow, unlike HCBS waivers.

Your child is eligible for Medicaid if they qualify for the Katie Beckett Program. These services can be used immediately. There is no waiting period.

These are just a few examples of the care this waiver covers:

  • Doctor visits
  • Hospitalizations
  • X-rays
  • Lab tests
  • Prescription drugs
  • Hearing and dental screenings
  • Screenings for behavioral health
  • Speech, occupational and physical therapy
  • Supplies and equipment for medical use

The state-specific coverage and definitions of institutional-level care vary. Check your state’s program to find out more.

What does the Social Security Administration (SSA), mean by disability?

Disability is defined by law as the “inability to perform any substantial gainful activity due to any medically determinable mental or physical impairment that can be expected or expected to cause death, or which has lasted for at least 12 months.”

What does an account for Achieving a Better Life Experience, (ABLE) serve?

Individuals with disabilities can save money and invest without losing their eligibility for public benefits such as Medicaid, Supplemental Security Income (SSI), or Social Security Disability Insurance. Your ABLE account earnings are exempt from federal income taxes, provided you use them for qualified disability expenses.

Who is eligible for a Medicaid waiver

In general, the states offer waivers for home- and community-based services to seniors (65 years or older), people with disabilities, people with developmental disabilities, people with severe medical conditions, and people who are severely disabled.

The bottom line

Family planning can be difficult, especially for those with disabilities. There are some key elements that will help you make your financial future more secure.

It is important to ensure that you receive the correct level of benefits. You can set up an ABLE account, supplemental needs trust, or an ABLE account, and you should also be familiar with Medicaid waivers. This advice is applicable to most families with a disabled member. However, every family is unique so it’s important that you seek specialist advice whenever you need it.

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