Social Security is a government program that for the most part provides senior citizens with income. You earn Social Security eligibility when you are paying those pesky FICA taxes throughout your life. Taxpayers can earn up to four retirement credits per year, and you will be eligible for Social Security as a senior if you earn at least 40 credits.
People who have earned sufficient retirement credits can potentially qualify for Social Security Disability Insurance (SSDI) benefits. If you can no longer earn very much income because you are disabled, you may be able to qualify for SSDI.
Supplemental Security Income
The acronym SSI stands for the Supplemental Security Income program. This is a government program that provides an ongoing source of income for people who cannot earn much on their own because they are disabled.
Eligibility for this program is based on financial need. It has nothing to do with the accumulation of retirement credits. Regardless of your work record, if you can prove that you are disabled and you have very limited financial resources, you may be able to qualify for Supplemental Security Income.
Once you have obtained eligibility for Supplemental Security Income, the eligibility is not necessarily going to be permanent. If you have a change in financial status, you could lose your eligibility.
This is something to keep in mind if you have a person with a disability on your inheritance list. A direct inheritance can result in a loss of benefits.
While we are on the topic of benefits, we should also point out the fact that Medicaid coverage can be lost in the same way. Medicaid is a need-based government run health insurance program that many people with disabilities rely upon.
Special Needs Trusts
If you want to provide resources for a loved one who is enrolled in need-based government benefit programs, you may want to consider the creation of a special needs trust. These trusts are alternately referred to as supplemental needs trusts.
The government benefits don’t necessarily cover everything that the benefit recipient requires. These unmet needs are called supplemental needs in this context.
When a special needs trust is in place, the trustee can use assets that have been conveyed into the trust to meet these supplemental needs. Eligibility for government benefits would not be impacted.
Free Report on Special Needs Planning
Our firm has prepared a special report that takes an in-depth look at special needs planning. This report will answer most of your questions, and it will give you a solid foundation of information to work with going forward.
To access your copy of the report, which is being offered free of charge, visit this page: Smithtown NY Special Needs Planning.
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