Disabled Adult Child

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Disabled Adult Child

Post by FL1234 » Fri Jul 31, 2020 7:48 am

We have a 25 year old daugter living with a serious mental illness that was diagnosed before 18 years old. She has full SSI benefits and Medicaid.
I'm 62 and my wife is 57 years old. I applied for social security so that the child can receive the higher DAC (disabed adult child) payment. The main reason for this is to take her off the asset restriction. I asked the people at the SSA office if she would qualify and they told the only way to find out is to apply. I might cancel this if I find it will create different problems, like loosing her Medicaidi and having to find new doctors etc. So reading on the forum I found other info that add to my uncertainty. So this is kind of a dry run...

- If I cancel my social security payout (payback within 12 months) the child will go back on SSI/Medicaid?
- The DAC benefit is $1200 per month and there's a 2 year waiting period to receive Medicare. I heard there are transition Medicaid programs etc.
But I also heard that any Medicaid support continues the asset/payback provision ???
- We use an Able account as a safeguard for Medicaid payback - if the child is off government support the account can grow to $418k, else 100k and it
has no Medicaid payback provision! This is the Florida Able program - like it.
- There's also a spousal benefit (child lives with us) that my wife could claim. My wife works and the income would affect the payout.
I use a software from maximisemysocialsecurity.com - So I did not ask for that. I have to be careful with my own income - part time self employed to
not reduce my social security payout.

I have the feeling I might still be missing something? My priority is to get our child the best future possible (not maximizing my benefits), specially let her have assets and freedom how to use them.

I did read other posts but as things change (Secure Act) and as this is really a puzzle, I gave up trying to do this on my own.

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Re: Disabled Adult Child

Post by MtnBiker » Fri Jul 31, 2020 5:56 pm

My understanding is that the disabled adult child benefit allows a transition from SSI to SSDI when a parent files for SS retirement benefits. An advantage of the so-called DAC benefit (available only if the disability originated prior to age 22), is the ability of the disabled adult child to maintain Medicaid coverage after converting from SSI to SSDI.

Individuals with disabilities initially access Medicaid through their SSI eligibility. As parents retire, the adult child typically transitions from SSI to SSDI, which can have a higher monthly payment than SSI. Without the DAC provision, the individual might loose Medicaid because their income is now too high. Congress established the Federal Law to allow Medicaid continuation for DACs to alleviate this concern.

So the DAC transitions from SSI to SSDI and remains on Medicaid during the two year waiting period for Medicare eligibility. Then, once Medicare starts, the DAC receives dual Medicare/Medicaid coverage. The later coverage remains low cost (near zero cost like Medicaid alone), since Medicaid covers all the Medicare premiums, deductibles and co-pays. The dual-eligible DAC also automatically receives Extra Help with Medicare Part D prescription drugs, so those costs are very low.

It is important to understand that Medicaid eligibility remains asset based. The DAC still has to keep assets below $2000 to maintain Medicaid eligibility, just like with SSI. So assets over $2K need to be held in some sort of account, like a Special Needs Trust, that is not in the individual's own name.

If, once on Medicare, the DAC chooses to drop Medicaid coverage, he or she would no longer have an asset limit but would have to pay all the Medicare costs that the rest of us retirees have to pay (Part B and D premiums, deductibles, co-pays and/or choose a Medicare Advantage plan with it own premiums, deductibles, co-pays and high out-of-pocket limits).
Last edited by MtnBiker on Fri Jul 31, 2020 6:17 pm, edited 1 time in total.

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Re: Disabled Adult Child

Post by MtnBiker » Fri Jul 31, 2020 6:10 pm

Have you tried the free social security calculator here?


This can recommend optimum filing strategies in your situation. Might be interesting to compare with the other software package. Be sure to click the box at the top of the page to access advanced options which includes married people and disabled children.

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Re: Disabled Adult Child

Post by FL1234 » Fri Jul 31, 2020 7:13 pm

Hi MtnBiker,
I briefly used the calculator thanks. It gives me some idea. But still too many loose ends and scenarios.
As you stated the Medicaid continuation also carries the asset restricton. A workaround is an SNT that feeds 15k yearly into an Able account that holds 100k. The Able account has more flexibility for payout, tax-free growth and no payback option (Florida plan). I rather not have to do it that way (SNT) - I heard that not all types of Medicaid (supplememnt) plans have the asset restriction?

My other question is if I can drop out of Social Security within 12 months and the DAC continues - I know the answer is No. But is there another scenario? I think at 65 one can stop benefit payments and the 8% growth continues. Does that cancel the DAC again?
Else I retire, adjust my income (self employed/part time) and save up some social security payouts. It will break even at around 77 years old (if I had waited to age 70) - Who knows what's in 15 years. (Maybe I hit the jackpot and all this brainstorming won't matter) Thanks for your input.

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Re: Disabled Adult Child

Post by VegasBH » Sat Aug 01, 2020 12:15 am

I would find a good attorney that specializes on social security and special needs trusts. These are such complicated questions.

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Re: Disabled Adult Child

Post by JBTX » Sat Aug 01, 2020 1:23 am

This thread is very relevant and helpful to our situation with 16 year ASD child. I may have to decide in 5 years if taking SS at 62 is worth it for DAC benefit, or defer to later age for higher retiree payouts. Also will need to get an SNT in place and also ABLE account. I didn't know that medicaid was still available for DAC to fill Medicare gaps. That is helpful piece of information. Whether it is worth the trouble for an otherwise reasonably healthy young adult remains to be seen.

When (or before) a child turns 18, how does one prove disability? Via application to Medicaid? When should Medicaid application take place?

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Re: Disabled Adult Child

Post by 123 » Sat Aug 01, 2020 1:36 am

What state does the child reside in? While SSI is a federal program in many states these is are also additional cash and/or medical benefits that are added by the state. It really gets complicated when the issues of expanded Medicaid eligibililty programs are added in some states. So much is dependent on how each state elects to support its residents.
The closest helping hand is at the end of your own arm.

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Re: Disabled Adult Child

Post by musicmom » Sat Aug 01, 2020 6:42 am

My 31 yr old disabled daughter became a DAC this year after I claimed SS retirement.
She has lost her SSI due to larger SSdisability payment and thus her Medicaid.
I am in the process of having her Medicaid reinstated via DAC provision.
It is imperative that she still have Medicaid as Medicaid allows her access to budgeta for community care and day program services.
With covid, it has been difficult to connect with the proper depts to get this accomplished.
Each step is complicated!

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Re: Disabled Adult Child

Post by FL1234 » Sat Aug 01, 2020 8:02 am

Some updates/responses:

We live in Florida and the Able program is great. Residents of other states can use it and viceversa with exceptions I heard.

When should one apply for disability? Some answers are in this book:
https://www.northstarplanners.com/when- ... ncial-plan
As we are talking about the DAC program it is important to know that disability had to start before age 22. Once applied that is the
start date, not the approval date. One can use earlier medical records but disbility decision could be best

Loss of community resources w/o Medicaid. That is also our issue... our daughter finally agrees to visit with medical staff regularly. But
that agency accepts Medicaid recipients. But they said that they also take Medicare - everything is in limbo until one actually tries.

We had good luck working with SSA agents on the phone. They were supportive and helpful compared tothe service I've received at
the SSA office counters.

Lawyers is another story. I have found few that know much about what is discussed here. One texpert did not know that the DAC
benefit is based on the PIA amount. He had to look it up.

My goal is still to go around the SNT and let our daughter own assets. She could inherit funds from relatives and then we always have
this concern she might loose benefits in case those go to her name directly. I know a 1st party SNT could solve this but she would have
to sign and that is a ??mark. We are talking about a mental health condition, we don't have/want custody and she's suspicious about
forms she doesn't understand.

The other is if I made the right decision to start DAC benefits now. She gets some more money but I miss out on mine and have to
walk a tightrope with earned income.

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