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Financial aid for special needs children

By Jason Alderman

Raising a family is challenging, even under the best circumstances. For those with special needs children, however, the emotional – and financial – stakes are raised dramatically. Medical bills and specialized care often far outweigh normal costs.

Fortunately, many government programs and community resources are available to help relieve the financial burden of parenting special needs children. But eligibility criteria can be complicated and the application process time-consuming. Here are a few helpful resources:

Through the Social Security Administration, the government provides two types of disability coverage: Supplemental Security Income (SSI) and Social Security Disability Income (SSDI). Rules and eligibility requirements differ between the two programs – and benefits differ for children and adults.

In a nutshell, SSI is a needs-based, cash-assistance program (like welfare) for disabled people of any age in low-income families with limited resources. Children under 18 (under 22 if attending school) qualify for SSI benefits if their disability meets these criteria:

  • Physical or mental conditions so severe they result in marked and severe functional limitations; and
  • Can be expected to result in death; or
  • Has lasted or can be expected to last for at least 12 continuous months.

Under age 18, income and resources for both the child and other family members living in the household are considered when determining SSI eligibility; however, after age 18 only the child's resources are considered. Also after age 18, the adult definition of disability applies: It must result in the inability to do any substantial gainful activity, such as work for pay.

SSI payment amounts vary by state, since some states supplement federal payments. And, in most states, children receiving SSI also qualify for Medicaid to help pay medical bills.

SSDI is a separate program funded by payroll deductions (FICA). Although children sometimes receive SSDI payments if their parents are disabled, eligibility is based on their parents' disability status, not their own. However, after turning 22, children who were already disabled may qualify for SSDI on their own if at least one parent:

  • Is already receiving Social Security retirement or disability benefits; or
  • Died and worked long enough to qualify for Social Security (i.e., paid into the system during working years – usually at least 10 years).

Eligibility rules and definitions for SSI and SSDI are very complex. Call Social Security directly at 1-800-772-1213, or visit their website at and search under the Disability tab. One particularly helpful resource is "Benefits for Children with Disabilities," Publication No. 05-10026. To learn more about Medicaid, visit

Fortunately, most diseases and genetic disorders have robust support groups and research organizations that can help. A good place to start your search is the Alliance of Genetic Support Groups at

One last consideration: When planning for their disabled child's long-term financial security, many people leave money directly to their child or name him or her a beneficiary. This sometimes backfires, since it may disqualify the child from receiving future government benefits and services, which often impose strict personal asset limits.

Always consult an attorney or estate-planning professional to ensure that you have set up the proper legal documents to protect your child's financial future.

This article is intended to provide general information and should not be considered tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how tax laws apply to your situation and about your individual financial situation.

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