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Gifts Can Be Double-Edged Sword For Special Needs Recipients

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Watch out when buying holiday gifts for individuals with special needs, financial planners say, so that you don’t inadvertently do more harm than good.

That’s because people with disabilities face strict limits on the money and assets they can have in order to receive Social Security and health care benefits.

Individuals with special needs cannot have more than $2,000 to their name at any one time and no more than $2,000 worth of personal property if they wish to remain eligible for government programs like Medicaid, Medicare, Supplemental Security Income (SSI) and Social Security. (Learn more about eligibility for government benefits >>)

“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,” Helen Sims, a Pittsburgh special care planner told the Pittsburgh Post-Gazette.

In many cases families will establish a special needs trust in order to accumulate money to benefit the person with the disability without disqualifying them from government assistance. Such a trust is controlled by a family member or other third party.

Gifts that could put a person’s eligibility in question can be given to the trust instead of the individual, reports the Post-Gazette. To read more click here.

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Comments (2 Responses)

  1. adaptmt says:

    I hope everyone understands the first sentence in this article is a bit misleading, and the article is inaccurate when it implies that there are resource limits for Social Security.

    The problem is NOT with “buying” gifts for people on SSI and/or Medicaid, the problem is with making cash gifts to people who receive SSI and/or Medicaid. Cash will count as “income” in the month it is received, and whatever is saved after that month (not spent)will count as a “resource.”

    People who receive Social Security Disability Insurance(SSDI) benefits, and Medicare, can receive cash gifts in any amount with no penalty, or loss of eligibility. However, if someone on SSDI also receives any amount of SSI, or also has Medicaid in addition to their Medicare, then the income and resource issues DO exist for that person.

    Bottom line is that Medicaid and SSI count income and have resource limits; SSDI, Social Security Retirement, and Medicare don’t have resource limits or limits on unearned income.

  2. Will says:

    This is misleading.

    Social Security Disability recipients can have ANY CASH VALUE AMOUNT IN THEIR BANK ACCOUNTS AT ANY TIME. They can also receive cash donations from anyone NOT RECEIVING SSI OR SSDI

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