Disability Financial Planning

Disability financial planning starts in Bizarro-land. Goal 1 is to be Broke-ish so you maintain eligibility for disability services. Then you have to figure out how to both be broke and not broke at the same time. OK… that is easy… so it is time to figure out how to provide a good life….

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Welcome to Disability Drumbeat #4

Thank you for investing some of your precious time. If you find this newsletter useful, share it. I hope you’ll reply, share corrections, ask questions, make suggestions, or just chat.

My bottom line is that “Much Better is Possible” for children with disabilities and the disabled adults that they will become… and I hope you want to help make that change happen.

If you are new here, shoot me a note or you can sign up for more of this (usually weekly on Sundays) at disabiltiyalmanac.com.

We are all in this together.

Steve

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Weekly Coffee #63

We’ll be brainstorming about Disability Financial Planning at 930. I’ll be at Ada’s Cafe at 830 to talk about special education, disability, and whatever.

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Financial Planning on Hard Mode

(what else is new if you are disabled?)

Pensions (ha!), 401ks, Social Security. Few of us do a great job of planning for our own retirement.. and what we can save for our kids is a bonus.

The stakes are higher if you have a child with a substantial disability or if you are disabled:

1. Eligibility for Disability Services requires Poverty.
2. Disability services and supports alone will not provide what almost anyone would consider adequate funds for a decent life.
3. You have to plan for the whole life of your disabled child – even after you are gone.*

*  NOTE – I am writing this from the perspective of a parent of a disabled child. The concerns are fairly similar for disabled adults – I think, I welcome corrections, comments, clarifications! Your mileage may vary a lot.

Individuals and the state know these are structural problems… and there is a patchwork of tools you can use to help (until we fix the system)…

1. An easy first step…

… an ABLE Account in 15 minutes (or less)

I’ve been a rabid fan of ABLE accounts since I first heard about them. I even made a video about how they work:

The more I’ve learned about our disability system, the more important I’ve come to believe ABLE accounts are… but not because they are a:

“great savings and investment tool for disabled people”,

BUT because they protect your eligibility for disability services:

• Inherit $2000 from your grandmother directly – and you could lose eligibility for SSI, Medicaid, and perhaps other services… with it conceivably taking months to years to fix.
• Inherit $2000 that gets deposited directly into your ABLE account… and you are just fine.

Disability services in the US are provided as benefits, like Welfare, not Insurance like Medicare, and so have severe restrictions on assets and income to maintain eligibility.

BONUS – if you are disabled and able to work, your employer can contribute to your ABLE account instead of a retirement program. There are some interesting benefits for the disabled worker (basically this raises the amount of funds that can be put into their ABLE account each year).

HOMEWORK: The next time you see someone in “Club Disability”… say “hi” and check to see if they have an ABLE account. Less than 2% of the 8 million eligible disabled people do, so it is likely that they don’t.. and it is a great icebreaker.

2. Working the System(s)

There are disability services that are available from your school system, health insurance, and the state…. but they seem to be provided on a “Don’t ask, don’t tell” basis. You need to be aggressive in making sure you are getting the services that you are eligible for.

2.5 Planning for the Future – Part 1

Special Needs Trusts and Pooled Trusts

Currently, ABLE accounts are limited to deposits of $18,000 a year (I think they are increasing by a $1000 next year). This gives a good estimate of when you may need to think about other forms of savings (NOTE – I’m not a lawyer or a financial advisor – if you are, let me know and help be correct/clarify this section!). The two main tools are:

Special Needs Trusts – an individual savings tool that shelters assets to protect them from counting as the assets of a disabled person. This should be set up by a lawyer experienced with these vehicles (a standard estate lawyer may not know the “right” things to do).. the key is that they pass scrutiny as a “Special Needs Trust”. For those who are planning to give more than the maximum allowed by an ALBE account or owning or transferring assets that can’t go into an ABLE account. They may also have non-disabled beneficiaries, I think (so the trust could be inherited by a non-disabled individual).

Pooled Trusts – I’m intrigued by these and haven’t been able to find out as much as I’d like. They seem to work like a mutual fund. I’m not sure how they work from tax purposes. The assets transferred into the trust are for the benefit of the trustee, but it cannot revert to another person, basically the trust inherits from the trustee – I THINK! (More research required). This might be a good way for people to cooperate to fund and build disability housing?

3. Where to Live

A disabled adult friend of mine is/was planning to move to Tennesee… he was optimistic, but I was concerned based on the report called out in Riffs and Licks below. Different states in the US and different countries have vastly different support infrastructures for disabled people (also true for special education). Access to SSI (not available in Puerto Rico … and maybe other territories as well). Waiting lists for Home and Community-Based Services (see previous issue). Poverty rates. Employment rates. Cost of living. Self-Determination for disability services funding. Rules about Medicaid clawbacks.

One interesting strategy someone shared was to live just under half the year in another country (I think it was the Philippines) and the rest in a US state with good Self-Determination support. This allowed them to access their US benefits for the whole year while living a large portion of the time in a country with much less expensive access to services.

Pure play expatriate living may also be an option.

4. After You

I’m going to die eventually (hopefully not for a LONG TIME!). I’m worried about how my disabled son is going to live after I’m gone. I’m hoping he will be independent, but the need for long-term supported decision making or a conservator of some sort seems like a real possibility.

This level of planning is pretty intimidating.

A good friend of my parents died a couple of months ago in her 90s. She had an adult disabled son (he is in his 60s I think) who lives at home. Things seem to have worked out, but the conservator that his parents found back when they were in their 60s or 70s was no longer available. It is easy to imagine how things can go wrong… and tricky to plan for.

5. The Long Game – from Benefits to Insurance

Many of the financial planning problems that disabled people face are side effects of the structure of our disability services system. If we treated disability services as a form of Universal Insurance, many issues would disappear. ABLE Accounts, Special Needs Trusts and all of the other clever hoops people devise… would be unnecessary. Here are the long term systemic changes that would help everyone:

• No Asset Limits – disabled people shouldn’t have to impoverish themselves.
• No Income Limits – disabled people should be able to work without fear of losing their disability benefits. Our system of “Poverty by Design” hurts disabled people and all of us by locking disabled people out of full participation in our society and economy.
• No Marriage Penalty – the system of restrictions that are in place have the effect of preventing some disabled people from getting married for fear of losing their disability services.
• No Sub-Minimum Wage – some disabled people do not have full protection of US minimum wage laws. It is grim (see a couple of references to 14c certificates below).
• No Clawbacks – our Medicaid system forces disabled people (and others) to be impoverished to access its services and then, in most states, an attempt to “claw back” any funds from their estate when they die. This is just cruel.

6. More and Next Steps

I’m still learning about all the pieces of this. If you know anything, have additional questions, stories to share, or anything else… let me know!

I’m going to put together a course and resource on this.

I’ll be sharing a waiting list signup link soon.

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Riffs and Licks**

Selected disability news and commentary

• ASAN Letter Urging DOL & OMB to Release Proposed 14(c) Rule – on the effort to end subminimum wage (did you know that disabled people don’t have the protection of minimum wage?)
• The employment of disabled people 2024 – official report for the UK.
• On seclusion and restraint in Australia. Part 1. Part 2.
• U.S. Justice Department settles lawsuit against Colorado over disabled residents in nursing homes – disabled people forced to live in nursing homes and denied access to home and community-based services.
• Disabled child waited nearly two years for social housing repairs – ombudsman – in Ireland. Inaccessible public housing.
• Projecting the Number of Eligible Voters with Disabilities in the November 2024 Elections – academic report out of Rutgers. 40.2 million disabled voters in the US. (I was on the US Democratic Party disability mailing list… I have thoughts… coming soon)
• Tennessee Disability Scorecard – this is awesome and we need it for every state!
• DWP benefit reforms to get people into work are ‘smokescreen for cuts’, disability activist says – “work for benefits” hits disabled people hard. Part of the problem with disability as a “Benefits” program instead of an “Insurance” program.
• DSP Wages Up, But Disability Providers Still Struggling To Maintain Services – (Direct Support Professionals – HA! they certainly aren’t treated as professionals)… we don’t pay our caregivers nearly enough. My son’s respite providers get the local minimum wage… so, totally uncompetitive for what can be very challenging work.
• The Case for Inclusion – report on DSPs and other topics related to people with intellectual and developmental disabilities. Issue papers.
• 2024 Election Has High Stakes For Disability Benefits – an important constituency that neither party is paying much attention to.
• GAO Report – SPECIAL EDUCATION Varied State Criteria May Contribute to Differences in Percentages of Children Served – lots of problems… what is being done?
• 15% of public school students have disabilities. Resources to support them can vary dramatically
• Special Education Teacher Time Use in Four Types of Programs – disturbing (and small) study shows that disabled students who spend most of their days in segregated settings (SDCs / Learnings Centers) may spend as little as 20% of their day on academic instruction. This is consistent (and worse) than a previous 2018 report on Segregated Classrooms by the National Council on Disabilties.
• The Arc – Action on Medicaid Newsletter – Medicaid is the major funding source for disability programs and it may be under attack. The ARC is gearing up to protect those services.
• Broadening benefits helps caregivers get back on track for retirement savings – focused on the HR aspects of giving employees benefits and flexibility when they have to take on caregiver roles for family members. The numbers are grim for people who have to take on caregiver responsibilities… not a surprise.
• ‘Urgent action needed’ | Disability pay gap widens to 17.2% ahead of Labour’s mandatory reporting bill – the disability pay gap in the UK… I think it is wider here in the US.
• Federal Judge Finds Indiana DHS Likely Discriminated Against Group Home – the state agency tried to force more rigorous zoning requirements on a group home for disabled people… let’s talk about accessible housing and more housing for disabled people too.
• Lessons from 50 years of advancing workforce inclusion for people with disabilities – op-ed on disability workplace inclusion.
• Backed by $10M Grant, UMD Researchers Tackle Tech Roadblocks on School-to-Adulthood Transition – yay… except the problem is incompatible data.. so we are paying again to fix a problem that we created. :( – this is in Maryland. I’m sure that no one else has these problems. Does anyone even try to link the different entities together in your state?
• Companies compelled to employ some number of disabled people in Korea... if you don’t hire enough disabled people, you have to pay a fine (for companies with 100 or more people). It would be interesting to see how this has worked.
• Blackoak Capital, Cushman & Wakefield launch $100 million fund to address critical disability housing shortage (Australia). it is still interesting to see substantial private capital investment in new build disability housing… I’m not sure how the government is incentivizing this. Most importantly, how do we get the private sector to engage in supporting disability housing (and employment and..) both because they are the right thing to do, but also because they are good business?
• Paralympian leads effort to improve travel for disabled people  (UK) – this seems to be growing around the world.
• Long Lines, Closed Polls, and Water Bans—But Disabled Voters Are Turning Out (US) – Julia Métraux covers a lot of disability issues. It will be interesting to see how disabled Americans voted. The Democratic Party outreach seemed pretty anemic to me (I was on the Democratic Disability Caucus mail list… it was depressingly generic, I’ll discuss it further in a future newsletter).
• Guest column: Windsor businesses must champion disability inclusion –  (Canada) Letter to the Editor in Ontario…  how about writing one in your town?
• Covid-19 Inquiry Told of Do-Not-Resuscitate Communication To People With Learning Disabilities (UK) – pretty grim (and we had the same thing here in the US). Illegal (in the US) healthcare triage for disabled people under COVID.
• California still has companies paying subminimum wage (and there is one right up the street in Redwood City). Here’s the national list of 14c Certificate Holders (definitely a future article).
• People with disabilities are key to our workforce strength – (California) – op-ed – (I double-checked that they aren’t a 14c company.. )
• Riding With Lyft And Uber Isn’t A Joy For Disabled People With Service Animals – How do we make transportation “Default Accessible”? This challenge exists for people with many different disabilities. When transportation is inaccessible, our communities are inaccessible. Disabled people can’t work or shop or choose where they live. It is a substantial tax that we levy without thought.
• Citing growing costs, Idaho seeks to end parental disability care worker program – programs that start out underfunded and poorly managed … get shut down for having problems. This is where the US disability community is on the front line. Depressing that no disabled people were even interviewed for the article. It is purely presented from the perspective of a bureaucratic inconvenience. The foundational justification for home-based services such as these was to reduce the use of costlly instittuional services.
• Nearly one in three pupils in England given extra time in exams, says regulator – perhaps we need to move beyond timed exams.
• Reducing Racial Disproportionality in Special Education – funding is raised as a concern, but if we looked at the total lifecycle funding to support a disabled person, early investment almost certainly pays off massively. Closing the employment gap (37% in the US) would both reduce service costs and increase our tax base in the best way possible – by having more people able to lead more independent lives.

** Suggestions welcome!