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Benefits May Change When a Disabled Adult’s Parent Retires or Passes Away

Tens of millions of people in the U.S. are considered to have one or more disabilities at any given time. Almost 20% of Americans live with severe disabilities and rely on public benefit programs to provide for their basic needs. Some of these individuals’ disabilities were present at birth or developed during early childhood. Others’ disabilities were caused by an injury or illness.

One public benefit that individuals with disabilities may be receiving is Supplemental Security Income (SSI), which is a monthly cash payment from the Social Security Administration intended to cover basic living expenses such as food and housing. To qualify, in addition to the disability requirements, a person’s monthly income cannot exceed a certain threshold—$914 in 2023, if unmarried—and their countable resources (assets) must be under $2,000. In Texas, someone who receives SSI is entitled to Medicaid health care benefits. Considering the high cost of health care, the Medicaid benefit often has much more value than the monthly cash assistance.

Now, what happens when the person’s parent retires and begins receiving Social Security retirement benefits based on their work record? Under the Social Security Administration’s Childhood Disability Benefit program, the adult child with a disability is entitled to 50% of their parent’s Social Security benefit amount. The person must be unmarried (or married to someone with a disability) and the onset of their disability must have begun before the age of 22. If the parent who has been receiving Social Security retirement passes away, the adult child with a disability is entitled to 75% of the parent’s Social Security benefit amount. Stepchildren and grandchildren may also qualify to receive these benefits under certain conditions.

Depending on the amount of the parent’s benefit, this could result in the adult child losing their SSI because their new income (50% or 75% of their parent’s Social Security retirement) exceeds the SSI income cap. And if they lose their SSI, their Medicaid health care coverage is terminated.

The good news is that federal law requires states to reinstate this Medicaid coverage for people who are in this exact situation. In Texas, this program is the Disabled Adult Child (DAC) Medicaid. The Texas Medicaid agency must notify the person that their SSI is being terminated due to their increased income from Social Security. The state provides two months of gap Medicaid coverage during the transition period.

Both benefits require an application: one application submitted to the Social Security Administration for the Childhood Disability Benefit when their parent retires, begins receiving Social Security Disability Insurance, or passes away; and a different application submitted to Texas Health and Human Services for Disabled Adult Child Medicaid. If the application for DAC benefits is submitted during the two-month “Gap Medicaid” period, the agency expedites the application process.

This is by no means an exhaustive list of public benefits available for those with lifelong disabilities. These and similar programs for individuals with disabilities may require the assistance of an attorney who specializes in public benefits.

You may visit our website at www.wrightabshire.com. Nothing contained in this publication should be considered as the rendering of legal advice to any person’s specific case but should be considered general information.