The Secret-ish Social Security Disability Program that you REALLY need to know about

50% of your Social Security Retirement Income. Jumping to 75% of your SS retirement income when you die (the parent, not the beneficiary) . Eligible for Medicare. No asset limits. No (non-W2) income limits…. I think!!!!! *****

If you are a disabled adult eligible for US Supplemental Security Income (SSI) or have a disabled child who may be eligible for SSI…. you need to know about the

Disabled Adult Child program.

I’m kind of annoyed as I hadn’t heard about this one and I stumbled onto it.

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US Disability Income Insurance programs

In the US, there are multiple income programs related to Disability:

Social Security Disability Insurance – SSDI – if you’ve worked in a job that is covered by Social Security and you have a qualifying disability. (There are a lot of lawyers and others who work in this area). This is effectively “early” Social Security if you become disabled as an adult and so works more like Social Security Insurance than a Benefits program (see several articles on “Poverty by Design” including this one on changing to a Universal Disability and Elderly Insurance Program).

Supplemental Security Income – SSI – basically for someone with a developmental disability that prevents them from working. Note, apparently some states have a state level supplement to SSI.

Blind or Low Vision provisions – not a separate program, but a higher allowable income limit than for other disabilities (something we should look into…)

Benefits for Surviving Spouses with Disabilities – this one looks like it is similar to SSDI, but the person must be between 50 and 60 and have become disabled during the 7 years before the non-disabled spouse died.

Minors with SS Benefits – disabled minors get these Social Security benefits based on their eligibility as a minor, not their disability status.

SSI for Children – another program that I just stumbled onto…. sigh. More to follow

and the one I’m very interested in

Disabled Adult Child – DAC – must have a disability that occurred before age 22. No substantial earnings ($1620/year or $2700/year if blind). Not married (unless their spouse is also eligible for DAC).

DAC Program Implications

The requirements for this program are VERY similar to those for SSI. In fact, if you are getting SSI, you may be able to transition to the DAC program once your parent retires or dies. Even better, for many people the $$$s are better from DAC than SSI.

Because of the severe asset and income limits for SSI and Medicaid, the DAC program is very interesting as it looks like those restrictions don’t exist. Thus, it might make sense to bypass SSI and Medicaid – if you can afford it – and move into the DAC program directly OR make your estate plan based on withholding assets until you are retired or dead.

This may also affect your Social Security retirement strategy in that you are not just planning your own retirement income, but that of your disabled child.

I’m probably going to work on a spreadsheet for this or something. Let me know what you are interested in!

***** As usual, I’m not a lawyer, accountant, or financial advisor. Do your own homework!… and if you find out anything helpful, please share and let me know!