In a column in the Oakland [CA] Tribune, Washington insiders Cokie and Steven V. Roberts call for approval of the Community Living Assistance Services and Supports Act. The measure, part of the health care bill, would allow workers to pay into a fund that would then pay a stipend if they become disabled.

CLASS, they say, could “make all the difference” for families facing the economic and emotional stress of long-term disability. It could allow an elderly person to pay for care at home instead of being forced to go into a nursing facility, or for a family caregiver to get help at home that would allow them to keep their day job. Presently, the Roberts’ say, many elderly and disabled people must impoverish themselves in order to qualify for government assistance. An excerpt:

How can pushing people into nursing homes be better than letting them stay in their houses? As a caller to a public radio program on the CLASS plan asked, “Why not try something where I can exercise my own responsibility for my future?”

Why not, indeed?

Cokie Roberts is a political commentator for ABC News and a senior news analyst for National Public Radio. Steven V. Roberts appears regularly on CNN, PBS and the ABC radio network, and hosts Voice of America’s “The Roberts Report.”

From the Pittsburgh Post-Gazette:

Giving gifts to a people with developmental disabilities, like Sarah Michael (left, with her family), during the holiday season can put their government benefits in jeopardy if not done properly.

If the gifts or benefits exceed $2,000 in total assets, the government can freeze critical benefits such as Medicaid, Medicare, Supplemental Security income or Social Security income.

“We see a lot of holiday celebrations, birthdays, communions and bar mitzvahs where people make several small monetary donations to special needs children, and if those compile over $2,000, their benefits are in jeopardy,” said Helen Sims, a special care planner with the Downtown financial planning group Guyaux Mandler Mah, which is affiliated with MassMutual Group.

… Families with disabled children can provide more security for them without disqualifying the child from government benefits by creating a special needs trust.

(Post-Gazette photo)

A Harris Interactive poll has found that most parents of children with disabilities lack a plan to cover a lifetime of care, and those who do plan often make mistakes that could disqualify their child from receiving government services. The research was sponsored by the Hartford Financial Services Group, Inc.

In a poll of 580 parents, 62 percent of parents of children with disabilities reported having no plan to cover the cost of caring for the child when they are no longer able to do so.

Even parents with a plan for their child made costly mistakes. Half of all parents of children with special needs plan to leave money directly to their child and even more (58 per cent) name their child as a beneficiary, either of which could possibly disqualify the child for critical government benefits and services. In addition, only a quarter of the parents have established a special needs trust to provide for supplemental needs and expenses of the child, while not disqualifying the individual from receiving government benefits. These missteps likely occurred because only 16 percent of parents with a plan created it with the help of a financial advisor or attorney.

(more…)

From the Wall Street Journal:

A growing number of financial service companies are springing up to help parents provide for the future care of their children with disabilities. They help navigate the maze of federal and state programs, and assist parents in setting up trusts, coordinating estate plans, and educating future caregivers.

These tasks have become increasingly vital as people with disabilities are living longer than ever before, frequently outliving the parents who support them.

Miami lawyer Barry Nelson (far left) set up a special-needs trust for his fourteen-year-old son Jesse, who has autism. The trust will be funded by life insurance when Nelson dies, and can be used to pay for expenses beyond what Medicaid or SSI would pay for.

Nelson says a special-needs trust “gives me — and it gives every parent — peace of mind.”

A sidebar provides a list of financial planning resources.

(Wall Street Journal photo)

U.S. News & World Report lays out a list of tips for financial planning on behalf of children with disabilities. Many of these kids will require financial support throughout their lives, writes Kimberly Palmer. Government programs can cover some basic medical care, but people will lose eligibility if they have more than $2,000 in assets. Parents need to use wills and trusts to ensure that kids will have the support they need when they grow up.

Among her suggestions:

• Establish legal guardianship;
• Protect your child’s eligibility for public benefits; and
• Think about insurance policies and special-needs trusts.

From the Kansas City Star:

An estimated one in 26 American families is raising children with disabilities, yet more than 80 percent of parents of these children have not established a special-needs trust.

A special-needs trust provides financial protection to those with disabilities, and also preserves their eligibility for Medicaid, Social Security income and other need-based benefit programs.

Experts say such a trust could preserve medical benefits worth hundreds of thousands of dollars over the life of the individual. The trusts help people get services they are entitled to receive through government programs.

The story contains tips for doing financial planning for children with disabilities, as well as resources for more information.

Martha Blue-Banning of the Beach Center on Disability at the University of Kansas presents two very helpful articles this month. She offers both a personal vision for parents who are seeking to assist their adult children in becoming independent, and a toolkit for developing assets and avoiding a life of poverty.

Writing in the Down Syndrome News, Dr. Blue-Banning describes her family’s journey helping son Ryan become a small business owner. Ryan, a young adult with Down syndrome, runs a successful vending machine business that was set up with the help of his family, a network of community supporters, and a small business grant from the Kansas Developmental Disabilities Council. It was not always easy — one day, thirty cases of soda exploded in an overheated van — but, writes Dr. Blue-Banning, “It’s working — and so is Ryan.”

Writing in Exceptional Parent magazine, Dr. Blue-Banning and lead author Megan O’Neil outline the tools that families can use to protect the assets of people with disabilities. The title says it all: “Avoid the poverty trap.”

Fear of losing federal benefits can be a major deterrent to working or saving. This built-in work and savings disincentive results in many individuals with disabilities living in poverty. So, are poverty and disability inevitable? With current asset development strategies, the answer is a resounding “NO.”

Among the tools they explain are

• Individual Development Account (IDA);
• Plan for Achieving Self-Support (PASS); and
• Special needs trust.

They describe the process of financial planning as “not easy, but worth it,” and urge families to consult experienced attorneys or benefits planners. Links to resources are provided.