Welcome to this evening's session entitled The Road Ahead, Comprehensive Future Planning for People with Special Needs. It's my pleasure to introduce you to our speaker, Alexandra Baig. Alexandra has her own national financial planning practice called Companions on Your Journey. She also acts as the benefits specialist for Clancy and Associates, which is a Chicago-based law firm that focuses on special needs planning. Alexandra is a member of the Academy of Special Needs Planners, and in particular, she is well-versed in the government benefits available to people with special needs and the rules that govern them. Her goal is to help people with disabilities and their families make the most of public and private money to live the life they choose. Please help me welcome Alexandra. OK, well, I'm glad to see a turnout. I am going to go through this. You may have very, who has done any kind of special needs planning? OK. Who has a family member or close friend or something who has this kind of situation? OK, so it seems like I'm speaking to an audience with some knowledge, so I will try not to bore you. If, as we're going along, if you have questions or you want to jump in, that is totally fine. I guess so long as we wrap up at 6 and people can get where they need to go. So I've been doing this for probably now about 17 years. Things have changed a lot since I got started, but the fundamentals have not changed. What people with disabilities and their families are looking for haven't changed, but some of the ways that they go about building that future has evolved. So really, when I work with a family, as we do with any financial planning situation, our first question is not about assets or debt or the economy or inflation, whatever. Our first question is really, what are you trying to do? What is your goal? What is the vision you have? And it's the same with a person with a disability. And as you are probably not surprised to hear, the goals are pretty much the same. So people with disabilities want a place to live that is theirs. They want the support they need so that they can live as independently as possible. They want employment that generates income. They want real work for real money. They want the ability to get around and get where they need to go, and they want friends and community. And I'm not saying they because I'm saying this is what they, you know, I know this. I know this because this is what people tell me. This is what happens when I sit down with families and we talk about, what are you looking for? And when I talk to the person with a disability, because very, very typically they're part of the conversation, at least, you know, once they're out of childhood. Okay, so then we talk and we dig a little further, right? What exactly, when you say home, what exactly are you talking about, right? What kind of a home do you want? Do you want to live by yourself? Do you want to have a roommate? Do you want to have a romantic partner? Do you already have a romantic partner, right? What are you looking for? What type of area do you want to live in? What do you need to have access to, right? Do you want a pet or some other, you know, something that's important that isn't on the list? What else is important to you, right? How does the person work and contribute? What type of thing are they looking for? What kind of work, right? And how much support do they need to achieve that, right? Who helps, right? So often when we start the conversation, mom, dad, brothers and sisters are doing most of the support, but that's not going to be the way things always are. So we have to look at who is going to be involved. Because while the goals and the objectives and the desires of people with disabilities are the same or similar to a lot of what the rest of us want, they do have support needs that maybe some that the rest of us don't have, right? So who are going to provide that support? And do they need any particular skills or training to do that? All right, transportation, lots of questions there. I live in Chicago, where public transportation is altogether pretty good. However, if you are a person with a disability who, for example, uses a motorized wheelchair, it's not so good, right? If you have to go from the general public transportation that the general public uses to what we call the dial-a-ride version of, and you're nodding your head, it's terrible, right? They show up late, sometimes an hour late, sometimes two hours late. They might take you on a three-hour drive to get you what should take 20 minutes, right? So there's a lot of issues around transportation, right? And this one is a big one. This one is a big one. We do a lot to think about the sort of physical material surroundings and things that people with disabilities want, like the home, like the transportation, even the job. But one of the single biggest challenges that people with disabilities face, as with some seniors, is community, friends, right? Community of people with and without disability, community of people who are not paid to spend time with them, right? OK. Now, this is true across the country. It's certainly true in Illinois. Illinois is the 47th, 48th, we kind of hover around there, worst state for disability services. But in general, across the country, this is the truth about the government programs and systems that support people with disabilities. Yes, sorry. Is it true for all people with disabilities? Or is it somewhat specific? Well, this is actually true for all disabilities. I mean, I'm thinking, so to be honest, most of the people that I work with have intellectual and developmental disabilities, right? But the transportation, for example, is still a problem. Because if you're a person with an intellectual disability who doesn't have a driver's license, right, you still have to use public transportation. If the fixed line doesn't go where you need to go, then you need to use the dial-a-ride service. Sorry. Did you just say that it's on NASA's website or something like that? Oh, OK. Sorry. And I'm supposed to repeat the question. OK. And I would repeat the question. This gentleman here was just asking whether I'm talking about people with physical disabilities more, because that's the interpretation he was picking up, or in general. And so far, what I've said applies broadly to people with different kinds of disabilities. Some aspects, for example, a person with significant physical disabilities, admittedly, is going to have more trouble with transportation, right? A person with behavioral health or significant intellectual disabilities may have more challenge finding a community. But I think a lot of these things, at least in my experience, and I'm happy to be corrected, a lot of these things have come up with people that have a variety of disabilities, and some which have more than one going on at the same time. Certainly, the support system across all disabilities is terrible, right? The funding is very low. The capacity for services is very low. The staffing is there's a huge shortage of staff. And that was before the pandemic, and it's way worse now. And when I say it's skewed, I mean that there's more capacity for services people don't want, and very little capacity for services people do want, right? Illinois still runs several large congregate state-operated institutions for people with intellectual and developmental disabilities, right? OK, however, that last bullet point, even though the system is terrible, you still need to use it. And the reason you need to use it is because if you had to construct all of this out of whole cloth yourself, if each family had to recreate all of this using only their own resources, except for the very wealthiest, it would be impossible to do. So if you think of some of the supports, even that a person with sort of moderate intellectual disabilities use, if you think of those kinds of support services costing even $10,000, $15,000, $20,000 a year, and you're talking about a young person who's 20 years old and is going to live till they're 80, that's a lot. So you still have to look at these systems and figure out, how can I get the most out of them that I can? OK, again, this is just some slides to show where the funding is. There's not a lot of it, right? These are waiting lists, right? So these are people. HCBS stands for Home and Community-Based Services. Those are services that people with disabilities get in their own communities, not going to an institution somewhere, right? These are people waiting for residential support. So they want to live in some kind of supported living situation, right? There's a lot of people out there that don't have services. OK, direct support people, there's a dearth, right? There is a huge, huge labor gap in this industry. It can be very challenging work, and the pay is not very good. So these are just some statistics. What I said about Illinois is true in Illinois. It's also, unfortunately, true in some other states. There are way too many people. The blue band up there is the number of people living in settings of 16 or more unrelated adults. How many of us would like to live with 16 or more unrelated adults that we did not choose to live with, right? OK. So the first thing we usually look at when we look to address this situation is the benefits piece, right? What does the person with a disability need to qualify for some of the benefits? And we typically start with Social Security, right? And one of the reasons we do that is because Social Security is a national program, and therefore, it has national eligibility criteria. So this is what Social Security says you need in order to qualify for disability benefits, right? So you have to have, and this is as an adult. I should say that while it's possible to qualify for disability benefits as a child, it doesn't happen too often. There are certain circumstances under which you would. But this is for an adult, which for Social Security purposes is anybody who's 18 or older, right? So you have to have a condition, right? You have to have a diagnosis, again, physical or mental, which includes behavioral health, right? Expected to last at least a year and in death, right? And this is the part that I spend a lot of effort working with families on, right? So how many of you have heard this idea that most people who apply for Social Security disability are denied? How many people have heard that, right? OK. I'm not sure what the actual statistics are on that, but what I can tell you is the reason why people are denied is this, right? So people go into their application with a lot of evidence of number one and insufficient evidence of number two, right? Because Social Security doesn't really care what your diagnosis is, right? What you have to demonstrate to them is this diagnosis or a series of diagnoses that I have prevents me from performing substantial gainful activity, right? OK. So medical eligibility, that part is easier because a lot of people come in, they have doctor's reports, they have psychologist reports, they have IEPs from their school, right? A lot of that evidence is there or can be obtained from the medical practitioner, right? It is really important. You don't have to, but it's good to have an actual diagnosis and a date because in case you didn't already know, the Social Security blue book, right? It's a list of all the conditions that Social Security might consider to be disabling and it has very specific instructions about what the people who are taking the application should be looking for, right? What exactly, how exactly does this particular diagnosis or that particular diagnosis have to impact the person? So if you have a diagnosis, that's great because that allows the Social Security personnel to hone in on that one place in the blue book and see, OK, what are we looking for, right? Especially if it's not an obvious diagnosis, right, that not everybody is familiar with. OK. But this is the challenge for those Social Security benefits. You have to provide evidence that explains how your disabling conditions limit your ability to work, right? So I spend a lot of time with families going through whatever documents they have depending on the person's stage in life. So if this young person is 18 years old, it's usually looking at their school IEPs, right? And we literally go through the IEP and we pick out the places that it talks about functional limitations, which I'll take a slight digression here. In the interest of keeping the child's or helping build the child's self-esteem in school, many schools produce IEPs that have a lot of positive things in them, right? And that's important, OK? My two kids have had IEPs, right? It's really important in the school language, the school meetings, to talk about what the child can do, right? That is really important. It's important for the child. It's important for the family. It's important for the IEP or the special education team. However, if everything in the IEP is positive and you take the IEP to Social Security as an evidence that your child has a disability, they're like, well, sure, we see your child was getting special education services. We also see that your child was getting A's and B's in all of their classes, is a delight to work with, has many peers, is respectful of adults, and they're looking through this and it's all glowing. Because what the IEP doesn't say is your child gets A's and B's because that child has a one-on-one aide sitting next to them breaking down everything they do, right? Your child gets A's and B's, sorry, because they get an extra hour to do their test, because their homework is reduced from 20 questions to five questions, right? So it's fine to have the positive stuff in there, but you need to have enough stuff in there that demonstrates the actual support needs, right? So that's kind of a digression, but that's for young people. And I typically do recommend that a young person with a disability apply as soon as they turn 18 for Social Security Disability Benefits, because the earlier you are, the more evidence you have from schools, and sometimes the easier it is to demonstrate. A lot of young people don't have a lot of work experience yet, so it may be easier to lay the groundwork and say, okay, these are the limitations, these are the challenges this young person's going to face as they try to go to work, okay. But again, even if you're working with non-school documents, if we're talking about a person who's already aged out of school, even if we're talking more about medical records or therapeutic records, again, the key is to connect the dots between what the disabling condition is and how it impacts a person's ability to work, right? Okay, and then sometimes, especially with people who have more invisible disabilities, you need to get really into, again, you need to really make that connection more strongly, because you need to explain why, okay, the person has a sensory processing deficit, and the person at Social Security, okay, they're sensitive to certain things, but if you think about that, that does really limit the environment in which they can work, right? Right? Okay. All right, so if Social Security determines that the person with a disability who's applying is eligible, these are the benefits. Now, it's not just Social Security, that as you'll see, we have Medicaid in there as well. Most states, Medicaid cues off of Social Security. That's why we typically start with Social Security. So SSI, Supplemental Security Income, is a benefit that's run through the Social Security system, although it comes out of a different pot of money than the Social Security fund itself. Medicaid, which provides both health insurance and in pretty much every state, is the primary source of funding for adult disability services. And as I said down here, Medicaid eligibility in most states is tied to SSI eligibility, and SSI eligibility, again, is determined by Social Security. Okay. Social Security Disability, I'm sorry, that's a typo. It should say Social Security Disability Insurance, SSDI. There's quite a substantial difference between Supplemental Security Income, SSI, and Social Security Disability Insurance, SSDI. And we'll talk about that later on. So SSDI is that disability benefit that any of us would get if we worked and if we've paid our Social Security taxes and we have enough quarters of credit, and then we become disabled, right? There is also a benefit that young people, or older people even, with disabilities can get based on their parents' work record if their disability started before the age of 22. And those work, that benefit has its own name, but it functions a lot like SSDI. Yes? Sorry. Thank you. The microphone. For a disabled adult child who's now getting SSDI because their parent filed, do they still have to wait the 24 months for Medicare, or do they jump on Medicare right away? So thank you, and I don't know if you already know the answer to that, just wanna get the general information out there. Oh, okay, so here's the short version. If they had SSI before, so they do have to wait the 24 months, but you know, for SSDI in general, there's an additional five-month waiting period, right? So that part gets waived if they had SSI before due to disability. So, but they do have to wait the 24 months. They don't have to wait the additional five months that most people would. So, and you got right to Medicare, which is the next one down there, which is, so on my previous slide, we had Medicaid, which is tied to SSI eligibility. And then as we're all aware, Medicare is related to either social security retirement or social security disability insurance eligibility. So, oops, wrong direction. Okay, so SSI and Medicaid are means tested. We might all know that, but it's an important distinction to help families understand, right? So, you have to meet the definition of having, sorry, were you, you have to meet the definition of having a disability. And besides that, you can't have too much income and you can't have too many assets, which in social security parlance are termed resources, right? Now we already know you can't have too much income because if you make too, too much income, you won't have enough of a disability to be considered disabled at all, right? But there's also the resource and the asset limit, right? And then for young people under the age of 18, parental income and assets might be deemed, well, will be deemed to the youth, which is why it's very hard for children to get SSI or disability benefits, right? Sorry, SSI, because that's the means tested one. Okay, for the asset limit, the reason we use the word resources and not assets, besides the fact that that's what Social Security uses, is that while all resources are assets, not all assets are resources. So you may already know this, especially it's the same rules as apply to seniors. So certain things that are definitely assets are not a what's called accountable resource. Those include your residence, car, things like that, personal use items, technology, assistive technology. And then pretty much everything that is cash or could easily be converted into cash is a resource. So for the means-tested benefits, can't earn too much, can't have too many accountable resources. And of course, assets that have a certain kind of ownership structure are also exempted. So assets that are in a properly written special needs trust, assets that are in a plan to achieve self-support, which is a Social Security structure, and assets held in an ABLE account. So those are all exempt assets, up to a point. There is a limit on the exemption for ABLE. OK. I am not an attorney, but I always throw this slide in there because whenever people think of special needs planning, they think of special needs trusts. It is an important aspect of the planning. So if you're going to do this as a financial planner, you definitely want to have one or two good attorneys to work with that are experienced in doing this. Because while not every person with a disability will need a special needs trust, quite a few of them will. So those are some of the characteristics of a special needs trust. The key is the fact that the funds are out of control of the person who's getting the Social Security or Medicaid benefits. So the reason special needs trusts work is because the assets are now owned by the trust. If they're owned by the trust, they're not accountable resources to the person who's getting those means-tested benefits. OK, ABLE accounts. People have all heard of ABLE accounts, right? So very useful. ABLE accounts, in contrast to special needs trusts, ABLE accounts actually remain the assets of the person with a disability, but they are exempt. They're exempt up to $100,000 for SSI and a higher threshold for Medicaid. So basically, it would be more accurate to say that there is no limit on ABLE account funding for Medicaid purposes. It's just that most states have a general upper limit of how much can be contributed to an ABLE account. Plan to achieve self-support. I throw this in there because it's a very seldom-used thing, but it can be useful. So if a person has a work-related goal, they can use a plan to achieve self-support to describe the goal, describe the steps, describe what they need to spend money on to achieve that goal, submit it to Social Security, and if Social Security approves it, any income that goes into that plan to pay for those things, and then the money that's sitting in the plan being held to pay for those things, it doesn't count as income, and it doesn't count as an asset or a resource either. But it has a very limited use because it can only be used for work goals. It has to be written very specifically, and the money then can only be used to achieve those goals. In contrast to means-tested benefits, SSI and Medicaid, we have the earned benefits, and those are SSDI and Medicare and also Social Security for Disabled Adult Children, which functions like SSDI and is earned by the parent's work record. So people with disabilities, just like the rest of us, if they work, they build credits. If they have enough credits, they become eligible for SSDI on their own work record. They can also, if their disability started before the age of 22 and has continued till the time when the parents start drawing Social Security, they can also get a Social Security disability benefit on their parents' work record. And whichever one of those things happen, 24 months later, they become eligible for Medicare. So you probably already know this. Sometimes I'm not speaking to a room full of financial planners. Most often, I'm speaking to a room full of parents. So that's why that's up there. This is an interesting thing to note. So the younger you are, the less credits you need. So if you are less than 24 years old, you only need six credits to be fully insured for Social Security disability insurance. As a result, I strongly encourage families whose child has the capacity to work to have them work so that they can earn those credits. Sometimes they might work through a school-related program. But even if they don't and they can't just go out and even get a job with school support, I recommend that the parents look into other ways. So there are more than a few parents who have started micro-businesses for their young adult children with a disability. There was one in our neck of the woods. Mom helped her start a business called Helper Girl. She basically was like TaskRabbit before TaskRabbit was a thing. Her mom basically helped her set up and do things for the neighbors. They paid her in cash. She filed a tax return. Boom. She was a small business. So if the child has that capacity, six credits is not a lot. And so I strongly encourage parents to do that. It sets them up to have those disability benefits start and then grow from there on. And the Social Security Red Book on Disability has a whole table of how many credits you need at various ages to qualify for a disability, to be fully insured for disability. And then, of course, you can also be insured as a disabled adult child, basically. And that's on the parent's work record as long as your disability started before the age of 22. And when you do that, you're technically eligible on both parents' work record. You would get paid on the work record of the parent who starts drawing Social Security first. And then when the second parent starts drawing their benefit, if that would give you a higher benefit, you would switch over. For our clients that have self-employed income or operate their own businesses, if they have a special needs child, is there a planning strategy put that kid on the payroll to get them some of the credits? Absolutely. Yes, absolutely. If that's a thing, and there are plenty of parents who do that, too. I had a client who was a lawyer. He was a partner in a law firm. And he hired his son to do clerical tasks. And that was it. I mean, he built up those six credits pretty quickly. So absolutely. OK. I don't want to go through this too fast. I want to get through everything, but also make sure that people have enough time for credits. And of course, Medicare. For some families, Medicare is actually a big deal. So some families, their strategy for getting their kids the six credits before 24 has less to do with the very small SSDI benefit that their kids are going to get from having six credits, and has more to do with starting that clock ticking for Medicare. So if they feel like the young person's not going to be working in a job where they're going to have health insurance, then that Medicare becomes pretty important. Medicaid is terrible as health insurance in most cases, but Medicare is pretty decent. Can I just follow up on that? So what you're saying is that if the main reason for the six credits part is the qualification for Medicare, because it's going to be probably smaller than 50% of my benefit? Yeah, well, there's a couple of reasons for getting your children those six credits, and then getting them to qualify for SSDI benefits pretty quickly. One is the Medicare piece. The second is because six credits is the least credits they'll ever need. So the older they are, the more credits they'll have to have. So if they start working later, they have a higher number of credits they have to accumulate to get the same benefits or the same. So it helps. I think those are really the two reasons, is it's the easiest it will ever be for them to qualify before the age of 24. Also, when they're younger, the micromanagement, create the small business, things like that, it's easier to do. So one more follow up on that. Sure. So the DAC, I don't remember exactly what the acronym was. Disabled Adult Child, or yeah, that one. So you have to be six, like as the parent, for them to get the 50%, you have to have filed. Yes. So that's the other piece. So here's what often happens. And this is, I don't really have this on a slide, but here's what happens in many cases. The young person with a disability files for Social Security Disability benefits at the age of 18, which again, I strongly suggest they all do it at the age of 18. As you know now, you file one application, SSI, SSDI, it all starts with one application through the Social Security website. So if the child has no work record and the parents have yet to draw Social Security themselves, that means they're not qualified to get SSDI or the Social Security for Disabled Adult Child, so they're just channeled to SSI. So then the child starts receiving SSI as a disabled adult, which I'll put in air quotes because they're only 18. Now then, if the child then begins to work, even a little, now their SSI will be adjusted down a little bit because they have earned income. But since you only lose $0.50 of SSI for every dollar you earn, they're still going to be better off. If they accumulate those six credits before the age of 24, then they'll start getting an SSDI benefit. If it's small, they'll continue to get some SSI. So now they're getting both of those things together. The total benefit amount will never go down from transitioning from one kind of benefit to the other. So now they might be 25, 26, 27, 28, whatever they are, and now they might be getting their SSDI benefit, which is small because they don't have much of a work record. And they might be getting some SSI as well, depending on how much they work. Later, mom and dad, or dad, one of the parents files for Social Security Disability benefits. Then the child becomes eligible for that benefit based on the parent's work record. Generally speaking, what happens then is they keep, the SSI goes away because typically there's too much income coming in now for SSI. They keep getting their own SSDI benefit, and then they get an additional piece of money based on the parent's work record. So that the combination of those two things is up to 50% of the parent's full retirement age benefit. Does that sort of make sense? Sorry. Yes. He's going to get a lot of exercise because this room is so big. In that example, if the parent is still, let's say they file for Social Security before full retirement age, but they're still working, does income limitations affect? It does. Yeah. So I'd strongly encourage parents, I mean, it depends on the family situation. I do strongly encourage parents, if you're still working and your child with a disability would get a benefit, you might as well delay your filing. I mean, it depends on the actual numbers. But yes, the income will also limit what the child can get, the dependent can get, or the, sorry, next question. Sorry. Nope. So if somebody is on SSI and they're working, even if it's for their parents, isn't there a chance that they could lose their SSI because they are able to work and hold a job? OK, so good question. OK, so I'm going to step back. And there's a lot of nuances to Social Security and their rules. OK, so first of all, I will distinguish between SSI and SSDI. And going forward, for the purposes of this talk, any time I say SSDI, those rules also apply to those disabled adult child benefits. So they have their own name, they have their own category, but functionally, it's SSDI rules. So with SSI, you never actually lose your eligibility unless you have medical improvement. So what happens with SSI, you apply, you get approved, you start getting SSI. You start working, you lose approximately $0.50 on the dollar for every dollar earned. Eventually, that $0.50 on the dollar reduction, yes, is going to reduce your SSI payable to zero. But you remain categorically eligible as long as your actual disabling conditions have not gone away, which means if down the road you get laid off or your hours get reduced, guess what? Your SSI comes back. You don't need to reapply. So with SSI, that's what happens. Unless your actual disability improves, you only go into zero pay status. SSDI is different. Sorry, did you have another? SSDI is different, and we'll let you ask that. So does taking medication mean that your situation is better? No. It has to actually improve. And I have had this situation with a client where the client had a behavioral health disability, which is typically where this sort of situation happens. Client had a behavioral health disability, was able to stabilize, was able to get a job, I don't know, $50,000, $60,000 a year, certainly way above the threshold where any SSI would be payable. But 18 months later, right, the client had an episode. The medication wasn't working. The client crashed. The client had to go to the hospital, inpatient treatment. Client couldn't work. SSI came back, right? So, you know, if it's a disability that can actually improve, then it's possible that that could change. But if it's a category of disability that doesn't improve, even if it can be managed, then you would stay eligible. SSDI, though, is different. So with SSDI, if you work too much, or earn too much, I shouldn't say work too much, if you earn too much through work, it is possible that you will be, the Social Security will decide you no longer have a disability, right? So there's a multistage process for that, which, if I don't have a slide for it and we have enough time, I'll go over it at the end, but there's basically a multistage process for that. It does not happen overnight. There is a process you have to pass through several levels of evaluation for that to happen. And there is a band of earnings where you can absolutely earn and keep getting your Social Security. So the short version, without going into all the stages, is as long as your earnings stay below that substantial gainful activity threshold, which for this year is $13.50 a month, as long as your earned income stay below that and your disabling conditions do not improve, you can earn and still get your SSDI or your Disabled Adult Child Benefit. There are also ways that you can reduce how much of your earned income is countable, but that's sort of beyond the scope of what we're talking about now, but there are. Okay, actually, you know what? I have a little bit of that in there, right? So there are certain ways that if you have, if you need support services, if you have expenses related to your disability, you may actually be able to deduct the value of those expenses. They're called impairment-related work expenses. It's the same as the IRS term. So, okay. We do have slides on it. Okay, fine, we're gonna go through this. So in addition to the fact that you can work up to the level of whatever that year's substantial gainful activity threshold is and still keep your SSI and SSDI, there are certain ways you can reduce how much of your income is counted, right? So impairment-related work expenses is a big one, right? If you have costs of goods or services or medications or anything, if you pay them out of pocket, if you need them because of your disability and also you need them to work, you can ask Social Security if they can be considered impairment-related work expenses, and if they are, then every time those expenses occur, they're deducted from your income for that month before your income is counted, right? So a short example of this is I had a young man is a service dog, right? He has low vision. He's not totally blind, but he has low vision, right? And he has some other disabling conditions too. So he has a service dog, right? He needs the service dog because of his disabilities. He needs the service dog to go to work. The cost of maintaining the service dog, as long as he pays those out of pocket, could be impairment-related work expenses, right? If a person uses assistive technology that costs money and they pay for it out of pocket, if they have certain medications they need to manage their disability and those medications have co-pays, if they need to see a therapist, physical or mental or whatever, on a regular basis, and they pay that out of pocket, all of those things can be IRWI. However, you have to send the documentation and an explanation of those things to Social Security. They have to approve it first, then it becomes IRWI. And then every month that those expenses occur, Social Security will deduct them from whatever your earned income is, and it will only count what's left. Okay. Also useful sometimes is a concept called employer subsidy, right? So if you have reasonable accommodations at your place of employment, then Social Security may count less of your income, right? So an example of this would be, suppose for my first bullet point, suppose that my disability is MS. And suppose due to my MS, I get tired more quickly than my co-workers. And so my employer says, you can take two extra half hour breaks for every eight hour shift, right? But they're gonna pay me the same. So I'm getting paid for eight hours, but I'm only working seven hours. If they can document this and there is a form for it to Social Security, then Social Security will only count seven eighths of my income, right? So that can be really, really useful because often people with disabilities who work do have these special accommodations. The challenge is sometimes getting the employer on board. There's a short form, it's not difficult, but conceptually, you have to explain to the employer why you want them to fill out this form. And typically, you have to explain to them how you fill out this form. Okay, so again, this is now we're kind of going back to the question that was asked a minute ago, what happens with SSI, right? As soon as you start working, you don't lose your eligibility, you just lose your money. You just don't get paid as much, right? So you go into zero pay status if you earn too much, right? This is what happens with SSDI, right? So with SSDI, you go through these stages. The first stage is called the trial work period, right? So in 2022, any months that a person with getting SSDI earns more than $970, that's a trial work month. Nothing happens to your benefits. It has no impact, you still get your check or your direct deposit, but you accumulate a trial work month. Once you've had nine of those in a rolling five-year period, you have completed the trial work period, that's stage one of the assessment. Nothing happens, you still get your check or your direct deposit, but in Social Security's mind, you've gone through the first stage of proving you don't have a disability any longer. After that, there's a continuous 36-month period called the extended period of eligibility, in which you get paid your SSDI for any month when your income is below the substantial gainful activity, and you don't get paid for any month when it's above. So during the trial, sorry, go ahead. Microphone's coming. These income numbers are very small. Are they tied to any form of inflation? They are adjusted. What I can tell you is that I don't know how they came up with the original base numbers. And you're right, they are ridiculously small. Even $1,350. There's no way you could live on $1,350 a month in the Chicagoland area, or even $2,000. You just couldn't, at least not without a lot of help. They are adjusted every year. They creep up, just like a lot of Social Security, but they seem to creep up more slowly. So the substantial gainful activity threshold goes up maybe like, most I've ever seen it go up in a year is $50. And the trial work level, too, it's like $20, $30 a year. So it's a very slow creep. Which is why using things like impairment-related work expenses and the concept of employer subsidy to try to reduce how much earned income is actually countable can be very important. I had a client in Delaware. Somehow his employer submitted a form that said that due to reasonable accommodations, he was only 50% as productive as co-workers with the same job description and no accommodations. So he was making nearly twice the substantial gainful activity threshold, but only 50% of it counted. So he still got his benefit. And if we have time at the end, I'll show you what that form looks like. It's not that complicated. So during this 36-month period, the payment of your disability benefit might be off again, on again, depending on your hours or whatever, seasonality. After that 36-month period, then if you are still earning above that substantial gainful activity threshold, that's when Social Security decides you are no longer disabled and you no longer get your SSDI benefit. Cautionary tale. Most cases, Social Security does not tell you that you are going through these stages. So I had a client who worked his entire life, and he worked for Whole Foods. He went through the trial work period. He accumulated all his trial work months. But since he always got his payment, he didn't know that he had gone through the trial work month. And nobody told him. Subsequently, he went through the extended period of eligibility. And since he was always below the substantial gainful activity level for that year, for those three years, he got paid his benefit every time. He didn't know he went through it. Several years later, when Amazon bought Whole Foods, they gave every employee in Whole Foods one share of Amazon stock, which was worth at that time, like, I don't know, $3,500 or something. They did not give them the share of stock exactly. Whole Foods sold the stock, and the cash came through their pay stub. So one month, because of that stock, that share that he was gifted, he went over the substantial gainful activity threshold. Because he'd always already been through those two former stages, Social Security sent him a letter and said, hey, guess what? You're no longer disabled. Now, he fought it, and it took him 24 months and a really good attorney to get his benefits back. So it's kind of important. If you're doing special needs planning, it's kind of important that you know how this works so that you can coach the families. Because again, in most cases, Social Security is not going to send them a letter that says, hey, you got through this stage. Right? OK. Many families are not so much concerned about the cash benefits, particularly SSI, since as many people have pointed out, it's not very big. The maximum SSI is less than $1,000 a month. So many families are less concerned about the loss of the cash benefits through work as they would be about the loss of the health care and support services benefits. So particularly Medicaid, so again, most support services for people with most kinds of disabilities are ultimately paid for by Medicaid dollars through what's called Medicaid waivers. So if you don't have Medicaid eligibility, you don't have access to those services unless you can pay out of pocket, which most families can't. So there are ways that even if you lose your eligibility for a cash payment for a disability benefit, you can extend your Medicare and sometimes more importantly, because it pays for services, your Medicaid. So SSI and Medicaid, in most states, in some states, it's the same application. In almost every state, they're very closely linked together. In pretty much every state, if you get SSI for disability, you will be eligible for Medicaid. If you have SSI for disability and you have Medicaid and they are concurrent, you're concurrently eligible for even one month, and then you later go into zero pay status for SSI because you worked too much, you can keep your Medicaid. You remain eligible for Medicaid because technically, you're still eligible for SSI. So for this reason, even some parents say to me, I don't really care that my child gets SSI. It's a hassle. You have to send in paperwork every month if they work. I just don't want to bother. I strongly, strongly encourage them to go through the bother. Get the child on SSI at 18. Get them on Medicaid at 18. And then they have that. So even if they then lose the SSI due to work, they still have the Medicaid. Because if you miss that boat, you can't get it back. So that's kind of important. However, if you do miss the boat, most states have Medicaid buy-in for workers with disabilities. So you can often, even if you work too much, again, to get Medicaid through other reasons, you can sometimes get it through the Medicaid buy-in. And I don't go into a lot of details about Medicaid in these presentations because the rules are different for every single state. But generally speaking, there is a Medicaid buy-in. And then Medicare, even if you do go through those various stages and lose your SSDI because Social Security decides you are no longer disabled because you're earning too much, there is a 93-month, well, it's technically it's 93 months from the time you finish your trial work period you still keep your Medicare without paying any premiums. So just for that concern. OK. So why is it important to do special needs planning? I'm talking to planners again. So this is probably, right, you probably already know this. That's why you're here. But when I talk to families, the benefits are out there. But as it's been pointed out very clearly, they're not a whole. They're important because they're cash coming into the picture. So they are important. You do want to apply for them. You do want to have them because every piece counts. Even if SSI is the maximum you can get is less, you know, if it's like $8,000, that's still $8,000. And for families that are thinking of how they're going to support this child for the rest of their lives, that's important. And certainly, the benefits that Medicaid pays for can be important. Those are the services like employment supports, job coaches, supports for the person to live in their own apartment or in a group home with workers coming in and out. Most of those things are paid for by Medicaid. So those government benefits are really crucial. However, they're not going to cover everything. The person's standard of living will be very low if they rely only on what the government benefits can provide. So the planning is necessary to tease out what will those benefits cover, particularly since that's going to change as the child and the family moves through time. What's left over? Where's the gap that the family is going to have to plug because who else is going to plug it? You need to plan because of the fact that people who need support services and work have to figure out, how am I going to stay on Medicaid? What are the rules? Or for people who can work but maybe not at a self-supporting level, what's my best strategy? How can I work and put in all those work incentives like IRWI and employer subsidy, how can I use that to maximize what I'm earning but still stay just under the threshold so I can still get those SSDI benefits because that's the way I have the most income coming in for myself? And then this one, too. So sometimes parents come in with such a strong focus on special needs planning for their child, young adult child, adult child with a disability that they forget about themselves. Yes, you have to put the supports in place and have the financial resources to fund that trust to take care of your child, but what about you? What about your long-term care? What about your retirement? What about the possibility that you might need home health care workers to come in and take care of you in the future? So balancing and allocating all those pieces. So that's where we become the guides and the resources. So that is, I think, the end. And if there are questions out there that haven't been asked, I'm happy to answer them. Would you make the distinction between the first party and third party trust? Absolutely. Totally different, and this is an important distinction. And again, caveat, I am not an attorney. I am not attempting to practice law without a license, just so you know. However, I hang out with attorneys a lot. So a first party trust is funded with the person's own money. So if I'm a person with a disability, and for whatever reason, I have my own money. Maybe it was a medical settlement. Maybe my disability was caused by medical malpractice, or I was hit by a car or something. Or just maybe no planning was put into place, and grandma and grandpa, grandma died and left me $30,000. So if I have my own money, and then I want to access those means-tested benefits, I can create a, well, someone can help me create a first party special needs trust. I put my money into that trust. Now it's no longer my money. It's the trust's money. And now I can access those means-tested benefits. However, because the purpose of me putting the money in the trust was to allow me to access those means-tested benefits, if I die and there's money still in the trust, Medicaid gets first claim on those. So that's one big difference. Third party trust is other people's money. Parents, grandparents, random strangers, GoFundMe, whatever. As long as it's just money that other people put in. Those trusts do not have a payback provision, because it was not my money to start with. It was my family's money that they held for my benefit. So after I die, whatever is left in that trust can go to my siblings, or my nieces and nephews, or a charity, or wherever. It's very, very, very, very important, then, that the two sources of funds do not get commingled. Because if you put the person's own money into a third party trust, guess what? Now it's all a first party trust. So, yeah. You talked a lot about planning when the child gets closer to 18. What are some of the conversations? I mean, you touched on it at the end about starting to save for their care, so that they have that support. But what are some of the strategies that you're using? Like ABLE accounts, special needs trusts, how young do you typically start having parents save if they know their child has a disability and won't be able to support themselves later on? So, yeah. I focused on the 18 and older because we had a lot of conversation here around benefits, because often that's the piece that is the most complicated for parents to process. However, as with any planning situation, earlier is always better. So for funding an ABLE account, for example, for funding a 529 account, because now more and more young adults with disabilities, including intellectual developmental disabilities, are going to college. They have a plethora now of post-secondary programs, most of which have to be paid for out of pocket. So yes, the earlier you can get, if you can get the family in when the child is still a child, you can at least lay the groundwork. You can make those projections. You can make some very, very rough estimates. We don't know exactly how your child's going to grow up and how self-supporting they're going to be. But maybe we can make a range of estimates. Here's what it'll take. You'll have to supplement if they can hardly work at all. Here's what you'll have to supplement if they can work at this level. Here's what you'll have to supplement if they can work at that level. So you at least put a range and get them started. And get them thinking about, well, let's assume that your child is going to need some supplemental resources in a trust. What are some good ways to fund that? Do we expect that you'll be able to accumulate enough and you won't use all your own assets? Do we want to look at life insurance? Do we want to understand the difference between funding that trust with a brokerage account and funding it with an IRA? So all those things can help the parents make those decisions about how they want to set aside assets, both for themselves and for the child, and where they want to direct their resources. So yeah, earlier is better, as early as possible. Admittedly, sometimes it's hard to get parents to start early because they're so overwhelmed with the non-financial aspects of planning for the child. You talked about past accounts. I'm not familiar with them. How do you set those up? So a past, it's called a plan to achieve self-support. It's not exactly an account. What it is, so this was way before ABLE accounts were around. So one of the problems that people with disabilities encountered is, let's say they wanted to actually increase their employability. Let's say they wanted to get some kind of certification or do some additional training, or maybe they wanted to buy a piece of equipment to start a small business or something like that, or even a computer to do. Since the asset limit for SSI, outside of a special needs trust, and those cost a lot of money in our complicated setup, since the accountable resource limit was $2,000, it became an impossibility. If I want to even go to community college, $2,000 isn't going to cover it. So in order to work with that situation, because Social Security actually would prefer that people work than not work, and they'd prefer that they work and earn more rather than less. So what happens is, it's like a 17-page form, of course, that you fill out. And you say things like, OK, my work goal is to become that tech. And here's how I'm going to do it. There's a program at such and such a community college. This is the cost for tuition. This is the cost for books and supplies. This is how long it's going to take me to do it. This is how my earnings are going to be better afterwards. Of course, that's forecasting, right? And you send that to Social Security. If they approve it, then whatever resources it takes to follow those steps, as you accumulate that money, you just set up a regular bank account. But that money is exempted. Now, you have to use it to do what you said you were going to do with it. You can't then take the money that you saved up and go off and buy a sports car instead. And it's a limit. So it's sort of a limited focus, limited time period type of thing. Do you get the form from Social Security? Yes. And I have to look out what the form number offhand. And now that ABLE accounts are available, less and less people want to go through the work of doing that. Because with an ABLE account, you don't have to write any kind of plan. The only thing that PASS can do that an ABLE account. ABLE accounts protect resources and exempt resources. They cannot exempt income. Income is income whether I put it into an ABLE account afterwards or not. PASS, however, can exempt income. So if I'm working and I have a PASS to achieve skills to work more, if I channel some of my income from work into that PASS plan, it's not counted when they look at how much SSI they're going to pay me. So that's the one thing that PASS can do that's different. But it is complicated. I'll try to find the form. If you try googling plan to achieve self-support, you'd probably get it. But I'll see if I can find it. I think we're running out of time. We're out of time. Nope, for recording purposes, you must use the microphone. I know that we come into different situations with different clients. Where's the best place to stay updated with this kind of information? What are the best resources? I struggle with that. So a couple of things. It is a commitment, financial commitment on our part. The Academy of Special Needs Planners is pretty good. For years, when I started doing this, they only admitted attorneys. After a while, they finally started admitting financial professionals as well. So if you want to join the Academy of Special Needs Planners, that would be one thing. They do have a lot of educational resources. They have a lot of webinars. They have their own conference every year, which is very good. So that's one source. You can become a POMS nerd like me. So the Social Security POMS, the Program Operating Manual System. If you want to try to track down some piece of Social Security rules that you don't know, if you put in whatever your question is, followed by S-S-A-P-O-M-S, maybe you'll get lucky. You might get lucky and find the actual part of the Social Security Code that talks about that. So I end up going back to the POMS a lot to make sure that I'm remembering things correctly or whatever. So that's one place. It's very tedious. I mean, I suppose you could read it start to finish, but that would kind of be like reading this Encyclopedia Britannica start to finish. It would probably take you years. So that's a source. If you, particularly for developmental disabilities, which are not just intellectual, but really anything that starts before the age of 22, your local ARC. So every state has an ARC. There is a national ARC. Generally, it's not very expensive to join. Most state ARCs also put on a lot of webinars and informational things. Well, it doesn't stand for anything now, because what it used to stand for involves a word that we don't use anymore. So it's just the ARC, A-R-C, capital A-R-C. ARC of Illinois, ARC of Massachusetts, ARC of Colorado. Every state has one, and then there's the ARC of the USA. So that can be a good place. Sometimes local agencies will have seminars or webinars that you can join in. A lot of stuff is virtual now, too, so that helps. So if there are large disability support agencies in the area where you live or support groups, like autism-related support group or something, they often have webinars. Sometimes I speak at them. Sometimes I just go to them and listen. So all of those places, because there really is no. There is a gentleman out there, Andrew Comero, who is also a special needs planner who is way more social media visible than I am. And he has a dream. His dream is to have one huge database where all this stuff comes together. But until that eventual reality comes to pass, I'm not quite sure how he created it. Those are the best sources that I know of to go to. Wow. Everybody's exhausted and ready to go have a drink now. I'm sure that's the motivating factor. I mean, if anybody has any last questions, fine. Otherwise, I appreciate your time and enjoy the rest of the conference.

special needs planning

disabilities

government benefits

SSI

Medicaid

eligibility requirements

financial resources

retirement planning

first-party trust

asset protection