And how the government could make it easier
There are many barriers for people with a disability and they are not all physical. There is an economic cost to having a disability that needs to be recognized. We expect that individuals with a disability will have higher healthcare costs and needs, but we overlook all the “extra” costs. These costs often force people living with a disability to choose between their independence and their government benefits. Our society can do better than forcing people to make this choice.
According to a study by the National Disability Institute (The Extra Costs of Living with a Disability, October 2020)
Households containing an adult with a work disability are estimated to require, on average, 28% more income (or an additional $17,690 a year based on median level income households) to obtain the same standard of living as a comparable household without a member with a disability.
So, households that have an individual with a disability (on average) need an additional $17, 690 a year on top of a regular income. It’s the “on top of” part that seems to be overlooked. An additional almost $18,000 a year is not enough. An individual needs that on top of an income. This is the part that makes individuals with a disability choose between their independence and necessary government benefits.
Government benefits
To qualify for Supplemental Security Income (SSI), a government benefit for low-income individuals with a disability (and the elderly), a person must have below $2000 in assets. SSI provides a monthly payment ($914 for an individual and $1371 for a couple) and, in most states, automatic qualification for Medicaid. Medicaid provides much-needed health care coverage, and most times, vision and dental coverage. Individuals with a disability cannot afford to skip health care coverage. These are essential government benefits for people with a disability.
Qualifying for Medicaid also opens up Home and Community-Based Waiver Services (HCBS) which allows individuals with a disability to live at home rather than institutionalization. The premise of this for the government is, why not let an individual live at home with services rather than take on the high cost of institutionalizing them? It’s an economic argument and a very sound one since institutional care can cost up to six times higher than at-home care. What we often forget is that the individual still needs institutional-level care and that care will fall on someone, usually the family.
As someone caring for a 22-year-old who has severe disabilities, HCBS programs are incredibly helpful. They supplement her school services, help her learn skills and stay active in the community, and provide respite help. These programs allow her some independence, dignity, and a sense of community and social involvement that she might not otherwise get. But, someone still needs to tend to her medical and safety needs 24/7. She cannot provide any care for herself. This is where parents come in. We supplement this. In our case, we gladly do it and would not have it any other way.
But… the government could make it easier on us. It should not feel like it requires a medical degree, a law degree, and an accounting degree to help care for our adult child and do it legally. For our daughter to qualify for SSI and Medicaid, she cannot have over $2000 in resources. According to the Social Security Administration, a resource is any cash, personal property, or anything that could be changed to cash. She also cannot have “in-kind” support, meaning we cannot provide food or shelter to her for free or even at a reduced cost, even though the government has said she needs institutionalized level care. This means we must charge her rent so that $914 from SSI isn’t money she can save for future medical needs or to supplement the extra cost of living with a disability. We have to do it for her.
Some help for families
In all fairness, the government has tried to help these situations. They created ABLE accounts in 2014. These accounts are like college savings plans but for people with disabilities. The government allows people to deposit up to $17000 a year (2023 rate) in a tax-free savings account that will not affect government benefits. Money in this account will not affect SSI or Medicaid eligibility until you have over $100,000 in total deposits. Anyone, including an individual with a disability, can contribute to this account. This permits an individual with a disability to save money for future needs, even though the government has made sure they have no money. So, it really is a way for a family to save money for the individual’s future needs.
It’s helpful, but did we really need to create a new industry for this? Parents need to learn about these programs, evaluate the different programs to see which states plan best fits their needs, sign up for the program, and then share the information with other family members so they can contribute. It should surprise no one that only 50,000 of the 14 million people who are eligible to open an ABLE account have one. The government created a new banking service to help families hide money from government agencies and few people are using them. It shouldn’t be hard to help someone you love who has a disability become financially stable. But, it is.
There are even more complex rules for individuals with a disability who want to work. Working provides a sense of purpose and dignity for people. We should not exclude the disabled community from this opportunity. And they are not, technically. People with a disability who receive government benefits can work, but they must either make a really low wage to keep their government benefits or (again) take part in government programs that help them hide their income from other government agencies. The government created an exemption for “expenses related to your disability” so some of your income does not affect government benefits. This means, if you use your work-related income to pay for special transportation or specialized training, that income will not count against your benefits. That is helpful, but the individual must spend that money, not save it. So, an individual with disabilities can work, but they risk losing needed government services and are still not saving money.
The Americans with Disabilities Act (ADA) is groundbreaking legislation. The ADA opened up places and opportunities for people with disabilities that otherwise would have been denied. But, it is old. It promised “advanced economic self-sufficiency” for people with disabilities, but that goal has been unmet. They should calculate the “extra costs of being disabled” into the determination of public benefits. The government should calculate the extra costs of being disabled to ensure financial security and stability.
Necessary changes
For families who choose to help their adult child with disabilities rather than have them institutionalized, it shouldn’t be so difficult. We shouldn’t have to hide our help or try to “play” the system to help ensure our child’s financial future is safe once we have passed. Tax deductions should be easier for parents who claim their disabled child or adult child. The government should recognize the “extra cost of being disabled” in the tax codes. The ABLE account max should be higher to match or exceed the “extra cost” of being disabled. Individuals are not really saving for the future if the amount we can put in each year is less than the extra cost of being disabled.
Clearly, the government recognizes that an extra cost exists or there would be no need for ABLE accounts or Special Needs Trusts. Now, the government should make paying that extra cost easier by eliminating the barriers they have imposed on individuals’ financial independence.
