When approaching retirement we tend to think about how to stretch our personal financial resources, combined with government resources like Social Security and Medicare benefits, over the remainder of our lives. As a person with autism enters adulthood we probably ought to adopt the same mindset. Financial planning for individuals with autism is complicated by the spectrum nature of the condition—some people will need more services than others so there is no meaningful annual number that approximates “typical” financial need. Programs for autistic adults that provide supported or supervised residential settings may cost $70,000 to $100,000 per year. Young adults that continue to live with their parents, and who have family members as caregivers, will generate out-of-pocket expenses that are much, much lower.
But there are big differences between retirement thinking and planning a financial future for an autistic individual. The first obvious difference is that, in a best case scenario, the person with autism is seeking to begin, rather than retiring from, employment. Secondly, the individual in question may not be able to handle money, especially in the form of abstract financial resources that are difficult for most people to comprehend. Furthermore, financial plans should be made for the day that the primary caregiver or financial advisor passes on. In that sense, you are planning for two lifetimes rather than one. Succession planning involves more than finances but is often done via a will or trust document that is a central financial planning document.
Finally, formulating a long term financial plan for a person with autism is emotionally daunting. That’s one reason many people don’t even try: The reality of the numbers may be brutal to face. But if you have read this far you are already ahead of most people. According to financial advisors who focus on families with special needs the most typical planning mistake they see is a failure to plan at all. The balance of this article will consider the following topics:
Private health insurance: A potential financial asset that many families may not have considered.
Earned Income: A potential financial asset to be cultivated.
Family Resources: Typically the “guts” of financial support that need to be well-organized by people familiar with the multiple needs and laws that affect families with autism.
Special Needs Trusts: The most typical legal planning vehicle used by families with autism.
Private Health Insurance
Private insurance has paid for some services for some people with autism but there seems to be little consistency of rules or payments. Drugs or services prescribed by a physician, such as speech or occupational therapy, may be covered by health plans in some situations. Some families have found that services may be covered, but only if they are prescribed for conditions that are co-morbid with autism rather than for autism, per se. Coverage may be included under mental health benefits, which have become generally more robust since the introduction of The Mental Health Parity Act of 1996. However, many families with a person with autism find it virtually impossible to get insurance and have been precluded from benefits based on “pre-existing condition” language. This obstacle is changing since the passage of The Patient Protection and Affordable Care Act early in 2010 which precludes private insurance carriers from denying coverage to children based on preexisting conditions and gives families access to a bridge insurance plan if adults with pre-existing conditions are denied coverage.
A majority of states have now enacted autism insurance reform laws that mandate coverage of certain autism-related services. Depending on how these laws are written, some services, such as ABA or possibly occupational therapy, may be covered for adults. However, even in the states which mandate insurance coverage beyond childhood, this typically ends sometime between the ages of 18 and 21. Good resources for state-specific information include local chapters of the Autism Society of America and Autism Speaks, as well as other parents within your community who have tried to get services covered by private insurance.
The most obvious source of private financial support is wages earned by the autistic individual. Scott Standifer, a clinical associate professor in the University of Missouri’s School of Health Professions, has put together a terrific Fact Sheet on Autism Employment which provides an overview of the vocational rehabilitation industry, the macro challenges the US faces in attempting to find employment for people with autism, as well as some best of breed private programs. Embedded within the Fact Sheet are links to national and state vocational rehabilitation resources, including a link to each state’s vocational rehabilitation contact information.
Disabled individuals who are receiving benefits from the Social Security Administration (SSA) have access to that department’s programs designed to help people with disabilities return to the workforce. Most of the SSA’s vocational rehabilitation efforts are directed through Work Incentives Planning and Assistance Organizations (WIPAs) located in each state, which are tasked with providing counselors to coordinate federal, state and private resources to help disabled beneficiaries return to work. In addition, there are two specific federal programs which disabled job seekers may qualify for: Ticket To Work which enables a disabled person seeking work access to an Employment Network, and Plan For Achieving Self Support(PASS), which helps individuals create an individualized plan to return to work and creates a savings vehicle that will allow the individual to shelter some income from SSI limits. While not designed specifically for disabled people, people with autism may also qualify for an Individual Development Account (IDA), a savings plan in which persons within certain poverty programs can have savings matched dollar for dollar by participating charities, and, to a limited extent, by the federal government.
“Family resources” include many things. The most important resources are the people: parents, siblings, friends, guardians, trustees, advisors, social workers, counselors, etc. Marshalling and organizing human resources is usually done through legal documents such as a will or living trust for the parents (or guardians) of a person with autism, and often a special needs trust. An attorney is a good point person to lead the process which generally begins with the parents/guardians writing a Letter of Intent detailing how the parent/guardian’s goals for the person with autism can be achieved by whom. Family financial assets, such as family wages, investment portfolios, real estate, life insurance policies, retirement accounts such as IRAs, or perhaps even a potential inheritance are positioned within this overall structure. A good financial advisor can help organize and maximize the financial resources. If sufficient resources exist, usually a special needs trust should be formed to provide a single repository for assets dedicated to funding the financial needs of a person with autism.
Seeking a Financial Advisor
In my experience, financial advisors are like chiropractors: Really good ones are worth every penny while mediocre or worse do more harm than good. There are a number of national financial firms that have created groups dedicated to serving the financial needs of families with special needs individuals, some of which are listed at the Special Needs Alliance website. A financial advisor that is knowledgeable about the unique financial issues faced by families impacted by autism may be able to provide valuable advice. Ideally, that person would know about, and/or have working relationships with other professionals that know about:
Many “name” financial firms which offer the services of a financial advisor are seeking clients with investible assets of $250,000 or more. However, there are no official rules about how much assets a client needs to open an account. Advisors who have chosen to focus their business on special needs families typically have done so because they have a personal connection with this community and may offer services to people with lower levels of assets.
One free resource which may help families begin to think about finances is a basic financial needs calculator available from Merrill Lynch. This calculator provides families with a worksheet to calculate monthly expenses and then build asset, return and inflation assumptions to yield a lump sum savings target. For most families, building a realistic monthly expenses budget will be challenging since pricing and availability of services will vary. However, the exercise is useful, if only to make clear the true cost of very expensive services that will only be affordable for merely a couple of years.
Special Needs Trusts
A trust is a legal entity containing property (generally financial assets) which is managed by a person, the “trustee,” for another person’s benefit, the “beneficiary.” A Special Needs Trust (SNT)—also known as a Supplemental Needs Trust—is a trust created for a disabled beneficiary under the age of 65 for the purposes of providing the beneficiary with “supplemental and extra care above what the government provides.” SNTs are generally created to shelter assets used for the benefit of a disabled person so that that person can continue to qualify for government programs like Supplemental Security Income (SSI) and Medicaid that have strict asset limits. Nolo’s website provides a brief overview of SNTs, while the Findlaw website provides a succinct FAQ page about SNTs.
Why Create a Special Needs Trust?
Oftentimes family members would like to help provide financial support to an autistic individual, yet even a relatively small gift of assets ($2000) will destroy that person’s eligibility for programs such as SSI and Medicaid. There are at least three obvious advantages to creating an SNT:
Types of SNTs: Third-Party vs. First-Party
There are third-party SNTs, which are created from the assets of others, usually family, and first-party SNTs which are created from the assets of the beneficiary. The government places much tighter legal restrictions on first-party SNTs than third-party SNTs, especially in the form of “look back” provisions and Medicaid repayment rules. Therefore, one should not co-mingle assets between the two structures. Whereas our government generally sees third-party SNTs as a way for family to provide for a disabled loved one, thus easing the financial burden left to the government, it tends to see first-party SNTs as a legal circumvention of eligibility rules. Therefore, it may be wise to spend down assets where practical (and they must be spent, not donated or gifted), rather than attempt a structure as legally complex as a first-party SNT.
Types of SNTs: Individual vs. Pooled
When most people think of an SNT, they think of an individual trust as has been described in the foregoing discussion. An alternative structure is a Cooperative Master Trust—also known as a Pooled Trust—which is managed by a not-for-profit organization usually on behalf of members or stakeholders. In this structure, assets contributed by many members are “pooled” and managed on behalf of the group with benefits distributed pro-rata according to contributions. Basically, one gives up a substantial amount of control over both the trust assets and proceeds in exchange for a (potentially) lower cost, ready–made trust structure. Generally speaking, families should probably view pooled SNTs as a fallback if an individual SNT is not a viable option. This may be because:
If a family chooses to participate in a pooled trust, it should choose its sponsor carefully. Ideally, both the charity and the trust should have long and stable operating histories, since if the charity goes broke the beneficiary could lose access to contributed assets, or potentially lose these assets altogether.
Funding an SNT
Many SNTs are funded by inheritance from the estate of a deceased family member. Other sources of funding may include insurance policies naming the SNT as beneficiary. Using insurance policies rather than a will avoids probate, possibly avoids estate taxes, and probably results in quicker access to assets. Real estate, such as the house an autistic person is living in, may be contributed to the SNT. While a house owned by an autistic person is not counted against that person’s $2000 asset limit for SSI eligibility, maintenance expenses, if paid by someone else, may count against income limits. If the house is owned by the SNT, then the trust may pay for these maintenance expenses without impacting income limits. Other financial assets, such as stocks and bonds, may be contributed to an SNT. If possible, one should avoid contributing financial assets from retirement accounts such as IRAs. The contribution will trigger income taxes on every dollar of donated IRA assets, whereas taxable account contributions do not trigger income taxes.
Other SNT Does and Don'ts
Imagine walking through a very long tunnel. You finally see the end of the tunnel bathed in light and feel a tremendous sense of relief, perhaps even exultation. But since your eyes have not adjusted to the light, you actually have no idea what is waiting for you just outside—maybe a grassy field and gentle stream, maybe a hungry bear, or maybe the light is really an oncoming train. Families with autistic teens approaching legal adulthood often see the light of a high school diploma or certificate of completion as the end of their own tunnel. Unfortunately, financially speaking, that light is more likely to be an oncoming train than a sunlit grassy knoll.
Financial preparation for a lifetime of autism is a daunting task. A family must assess what private/personal financial resources can reasonably be earned or expended over the lifetime of the autistic individual, and attempt to combine them with publicly available funding in a way that does not disqualify an autistic person from receiving public support. This is a delicate balancing act. Furthermore, the public support consists of disparate programs, individually legislated sometimes by federal and other times by state governments—some aimed at poverty, others at disability—that are rarely coordinated. The result is a confusing mess. There is no “U.S. Autism Program,” and before you think, “Well, they should do something about that!” understand that there is no “they.” You are “they.” So as you take a deep breath here are a few maxims to bear in mind:
Supplemental Security Income , Administered by the Social Security Administration (SSA)
What It Is:
SSI is a federal program designed to provide income for disabled people who have little or no income and very limited assets. A full autism diagnosis will generally be considered a “marked and severe” impairment which should qualify a child as disabled, and prevent an adult from procuring “substantial gainful activity” which is the adult standard for disability. SSI is arguably the most important public benefit that an autistic person can qualify for, not only because it provides a monthly income, but also because its strict disability and income/asset requirements mark an SSI recipient as likely to qualify for a multitude of other public benefit programs as well. It can be a de facto passport to other services. Individuals qualifying for SSI must have income below the federal benefit rate of $674 per month ($1011 for married couple), which is equal to the maximum benefit that SSI will pay out. Personal assets are limited to $2000 per individual or $3000 for a married couple. However, there are certain payments made to an individual that are not counted against income, such as the first $20 of most income received per month as well as the first $65 per month of wages and half of the wages over $65 per month, as well as certain other public benefits such as food stamps. However, other benefits, such as the rental value of a young adult living in his parent’s house, may be considered the equivalent of income for that young adult. Per the asset limit, the home a person lives in, the land it is on, and often a vehicle or other assets required for holding a job are examples of things not counted against the $2000 limit. Families who have income and assets greater than these limits may be able to shelter assets to be used for caring for an autistic family member by setting up a special needs trust.
How To Get It
Since SSI is a program that is designed for disabled persons only, you must be able to document your disability as well as your financial status. Be prepared to provide a diagnosis from a physician and, if an adult, a professional opinion that your condition will prevent you from engaging in substantial gainful activity. If a child applies for SSI, his parents' income and assets are counted against the limits described above. For some families this means that it makes more sense to wait until an autistic person turns 18 to apply for benefits. However, most initial applications for SSI are turned down and persons must reapply after learning what parts of their application the SSA finds deficient. So advice from lawyers and social workers is: Prepare documentation of disability rigorously, apply early, anticipate an initial denial, reapply, and keep fighting. One can begin the application process at your local Social Security office or online. A freely available overview of SSI, as well as a link to the excellent book, Nolo's Guide to Social Security Disability, is available on the Nolo website. The Supplemental Security Income page has links that will take you to the Benefit Eligibility Screening Tool as well as to the application process which will eventually culminate in a face-to-face meeting/interview by SSA personnel. In addition, the Ohio Center for Autism and Low Incidence (OCALI) website offers a video interview with a parent and autism advocate who describes the SSI application process based on his own experience as well as those of the clients he has represented.
Social Security Disability Insurance (SSDI) – Administered by the SSA
What It Is
SSDI is a federal program which provides income to disabled workers and their dependants who have what we will refer to as a "Qualifying Work History" (QWH) and thus have paid FICA payroll taxes and earned enough work credits to qualify for social security benefits. There are three types of SSDI benefits that may be provided: (1) to the individual with a QWH who has become disabled before age 65; (2) to disabled children or to the disabled adult children (who were disabled prior to age 22) of someone who has a QWH; or (3) to widows or widowers age 50 or older of deceased persons with a QWH. Since few autistic people have QWHs, and since relatively few get married, benefit (2), known as the Childhood Disability Benefit is most likely to impact people with autism. Applications for SSDI, like those for SSI, are made to the SSA, which should determine eligibility for both programs with a single application. (In theory, anyway. You will need to verify this upon application.)
There are some important differences between SSI and SSDI: (1) SSDI payments are based on the earnings of the person with a QWH, and therefore may be higher or, occasionally, lower than the maximum SSI benefit; (2) Although there is a mandatory five-month waiting period before SSDI payments begin, the SSA may determine that a claimant is owed benefits retroactively, i.e., before the application was submitted, which will not happen with an SSI application; (3) Twenty-four months after SSDI benefits begin, a claimant automatically qualifies for Medicare coverage, whereas there is no automatic Medicaid coverage as usually occurs for SSI claimants. If SSDI benefits are low enough, a claimant may also qualify for SSI.
Thinking About SSI and SSDI Together
Example: Johan, 53, and Dorothy Jones, 50, have 16-year-old son, Mike, who has a full autism diagnosis. Both Johan and Dorothy have QWHs and Johan is still working full time. Family income and assets are above limits to enable Mike to qualify for SSI. Knowing that Mike will be denied benefits, the Joneses may wish to wait until Mike is one month from his 18th birthday in order to begin the SSI application process. If Johan retires in twelve years, they may wish to reapply for SSDI benefits for Mike, which might be greater than SSI benefits, and eventually enable Mike to qualify for Medicare coverage.
Medicaid, Administered By the Centers For Medicare and Medicaid Services and the States
What It Is
Medicaid is a federal program, administered primarily at the state level, and funded jointly by federal and state sources, that provides health care and other services to people under state-defined poverty levels. In some states the program goes by other names, such as Medi-Cal in California. For most people with autism, access to the Medicaid and SSI programs are the two most important sources of financial support in their lives. In most states, if you qualify for SSI you automatically qualify for Medicaid. In seven states you will qualify after a separate application process: AK, ID, KS, NE, NV, OR, and UT. The eleven states with separate eligibility rules include: CT, HI, IL, IN, MN, MO, NH, ND, OH, OK and VA. One may qualify for Medicaid without qualifying for SSI since in some states effective income/asset limits are higher (particularly in the 34 states that recognize the concept of “Medically Needy”) and Medicaid does not require recipients to be disabled. One can qualify for Medicare, through SSDI, for example, and still be eligible to qualify for Medicaid.
The Medicaid program provides both mental and physical health care benefits, and the states define what services and procedures are covered. Some of these services may include therapy or day services for people who are considered developmentally disabled. The Medicaid program also provides long term skilled care (nursing home care) for elderly people whose assets and income have been exhausted.
Almost all states have chosen to offer services through Medicaid “Waiver” programs that allow states to provide services outside of traditional federal Medicaid mandates. There is widespread use of Home and Community Based Services (HCBS) Section 1915 (c) Waivers which allow states to provide in home/community services in lieu of institutional services. “Olmstead” Waivers, named after the 1999 Supreme Court ruling, are similar and are specifically aimed at people with disabilities. A few states have waiver programs that are specific to autism. However, funding for waiver programs is generally limited and waiting lists for services are usually long. Unfortunately, waits of seven years are not unusual. A good source for further information is the video interview of Gary Tonks found on the OCALI website.
How To Get It
You can apply for Medicaid benefits at your local Medicaid office.
Housing Assistance Programs, Administered by Housing and Urban Development (HUD) and the US Department of Agriculture (USDA)
What It Is
The primary program for low income housing is the Housing Choice Voucher Program (HCVP)--also known as "Section 8" housing. which is a federal program overseen by the U.S. Department of Housing and Urban Development (HUD) but administered primarily at the local level. Generally, the program is aimed at people with incomes under 50% (and especially under 30%) of the median income for the local area, and/or elderly and disabled persons. These programs assist paying rent, and in some cases can assist in purchasing a home, but housing providers must be participating in the HCVP. The HCVP is administered by local Public Housing Agencies (PHAs), which accept applications, keep waiting lists and administer payments. In general, families are expected to find appropriate housing themselves and apply the HCVP subsidy--which varies--toward their rent. Typically, persons receiving HCVP assistance are expected to pay about 30% of their income toward rent.
For persons living in rural areas--usually defined as having populations under 10,000--the U.S. Department of Agriculture (USDA) has Rural Development Programs that assist low income people with housing:
How To Get It
In order to qualify for an HCVP, persons should apply to their local PHA. If successful, an applicant will typically be added to a wait list. Often, however, wait lists are full and the PHA is not accepting applications so you must check back periodically.
Supplemental Nutritional Assistance Program (SNAP) – Administered by the USDA
What It Is
SNAP, often referred to by its former program name “Food Stamps,” is a federal program administered primarily at the state level that provides payments to households below state-defined poverty lines that can be used to purchase food from participating retailers. Like the Medicaid program, SNAP sometimes goes by other names, such as the Food Supplement Program (FSP) in Maryland. As of mid-2011, 45 million Americans received some form of SNAP assistance, or almost 15% of the U.S. population. Since eligibility is based on household income (gross 130%/net 100% of poverty) and resource ($2000 or $3000 per household) limits, autistic adults living with other family will have eligibility impacted by income and resources of that family. Autistic individuals living independently and who are receiving SSI should qualify for SNAP allotments, since SSI income and asset limits are generally more restrictive than SNAP limits. If an applicant qualifies for SNAP he will be issued an Electronic Benefit Transfer (EBT) card which may be swiped like a debit card at a participating grocery store or retailer. The (rather complicated) calculation of monthly benefit--called an “allotment"--varies by income level, size of household and certain qualifying household expenses. Based on $64.4 billion of benefits allotted by the program in fiscal 2010, we estimate that an average recipient receives about $120 per month in benefits.
How To Get It
You must apply at a local SNAP office, and generally have a face-to-face interview during which you should be prepared to document income and resource levels and qualifying expenses. Proof of SSI receipts will generally be helpful in establishing eligibility.
Other Federal Programs
There are a large variety of federal government assistance programs. Two examples of programs which may be applicable to autistic individuals, and websites with eligibility and application information, are:
Low Income Home Energy Assistance Program (LIHEAP): Overseen by the U.S. Department of Health and Human Services (HHS) these federally funded block grants are state administered and aimed at households between 110% and 150% of the poverty level to help pay for home heating bills
Temporary Assistance for Needy Families (TANF): Formerly AFDC (often referred to as “welfare"), this program is overseen by HHS. These federally-funded block grants are administered by the states.
The website Benefits.gov is a good place to explore various U.S. Government programs for which you may qualify. There is a Benefit Finder tool, or you may browse by topic, (e.g., Disability Assistance), by federal agency, or by state. Only federal programs are included on this site, although many are state administered.
Other State Programs
There are many different state programs across the various states which autistic individuals may qualify for. All states have a disabilities services agency which, like motor vehicle departments, goes by different names in different states. These agencies typically provide funding for vocational rehabilitation, residence, day habilitation, transportation services, etc. You should contact this agency within your state as soon as possible to get information on programs and eligibility. State programs may be for children or adults, but many are wait-listed so there is no reason to wait until adulthood to contact these agencies.
There is an excellent state-specific financial article posted by Pathfinders For Autism in Maryland entitled “Financial Things Every Parent Should Know” which is quite helpful for Maryland residents, but also serves as an example of how many different state resources may exist besides those mentioned here.
It is that time of year again, when families get together for holidays and people start Christmas shopping.
My daughter wrote a monologue for an acting class about growing up with a sibling on the spectrum.
I’ve come down with an early case of the “Bah Humbugs” this year.
Last Tuesday my sister Connie had to have a surgery.
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By the time you read this, I will have returned from a week’s vacation in Florida with my family.
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