Caregivers of dependents with special needs who receive Social Security Disability Income (SSDI) benefits must fully understand the nature, scope and duration to effectively plan for their dependent’s financial future.
When SSDI benefits are payable based on a caregiver’s working record to their adult dependent with special needs, the Social Security Administration (SSA) considers this type of benefit as a “child’s” benefit.
Many caregivers do not understand how this type of SSDI benefit works and make incorrect planning assumptions. Often caregivers assume benefits last forever when in fact they can be reduced and stopped by the SSA. Without a clear understanding of SSA benefits and payments, caregivers may not be able to effectively plan for the financial future of their dependent with special needs.
Eligibility through the caregiver
Adult dependents may be eligible to receive SSDI payments from their caregiver’s working record based on their own disability or blindness if certain requirements are met. Their caregiver must have contributed into the social security system for a minimum number of qualifying quarters. Some of the taxes must have been paid in recent years. Even then, the dependent is only eligible to receive SSDI payments if their caregiver is receiving social security disability, retirement benefits or is deceased.
Next, the dependent must be over the age 18. Their disability must have occurred before age 22, which is the age a disability must have manifested to be considered a developmental disability by federal government standards. The dependent cannot be performing any substantial work (per definition by the SSA) and must have a medical condition that lasted or is expected to last for at least 12 months or results in death. Typically, they must also be single or married to another social security beneficiary. Social Security disability income benefits can also be payable to adults who received dependent benefits based on their parents’ Social Security earnings record prior to age 18.
After receiving 24 months of SSDI payments, the recipient will become eligible to receive Medicare Part A hospital insurance benefits, which are premium free. At that time, they will also be eligible to purchase Part B supplementary medical insurance and Part D voluntary prescription drug benefits.
How much a dependent receives
Social Security disability income benefit payments made to the dependent are based on the average monthly indexed earnings of the wage-earning caregiver and reflect that caregiver’s actual contributions into the system. Since limited contributions were made to the system, the SSA calculates the family maximum that can be paid to the family as a whole.
For example, if the dependent is eligible for SSDI benefits based on their caregiver’s disability, the family’s maximum monthly benefit can be no more than 150 percent of the caregiver’s primary insurance amount (PIA.) The former wage-earning caregiver receives his own full benefit, and eligible dependents must divide the balance between them. Payments to eligible dependents are reapportioned when other dependents are added or removed. This reapportionment could occur when the caregiver’s spouse reaches retirement age or the caregiver leaves behind a widow(er) who is also eligible to receive benefits.
Continuation of benefits
Therefore, as earlier mentioned, SSDI payments to the dependent with special needs can be decreased, modified and even stopped. If the SSA determines the caregiver’s disability has ended, and they are not of social security retirement age, the dependent’s SSDI benefit will terminate as well. This could leave loved ones with inadequate funds and potential loss of accompanying Medicare coverage.
Caregivers of dependents with special needs receiving SSDI payments cannot assume benefits will continue uninterrupted. Caregiver’s must contact the SSA and determine if there will ever be a benefit reduction or elimination at any point in their dependent’s future. Additional special needs planning can then be undertaken to offset the effects of these potential changes.
For more information about this and other related topics, visit metlife.com/specialneeds or call 1-877-638-3375. Also, for current Social Security information, visit ssa.gov.