Of Counsel
When the parent of a disabled adult child dies, becomes disabled or retires, his or her disabled adult child may be eligible for Childhood Disability Benefits (CDB). If the parent worked and paid into Social Security for a sufficient number of quarters, the disabled son or daughter may become eligible for 50% of the parent’s Social Security Administration (SSA) payment if the parent retires or becomes disabled and 75% of the SSA payment if the parent dies. The parent, who retires or becomes disabled, continues to receive his or her full payment, but in addition, the child receives the 50% SSA benefit amount.
Disabled Adult Child (DAC) is a Social Security term for a child who was disabled prior to the age of 22 and is continuously incapable of substantial gainful activity (sga). In order to be eligible for CDB cash benefits from the parent’s work record, the adult child must also be single or married to another DAC. (Note that a person receiving Supplemental Security Income (SSI) is not automatically considered a DAC.) Because the cash benefit under CDB is often higher than the cash benefit under SSI, the adult child may often lose his or her eligibility for SSI. The first $20 of CDB is not counted by SSI. The cash benefit received from SSA is treated as “unearned income” and, after the first $20 set-aside, will reduce the SSI check dollar for dollar. In some cases, this means the adult child will no longer be eligible for SSI.
Parents often assume if their child is no longer eligible for SSI, he or she will lose Medicaid as well. This is not true. A little known federal law, Section 1634C of the Social Security Act (42 U.S.C. 1383c), allows a former SSI recipient to continue to be eligible for Medicaid even if the amount of CDB exceeds the SSI amount. Sometimes the Medicaid coverage continues automatically. If a parent receives notice that Medicaid will be discontinued or a spend-down must be met before Medicaid will continue, the DAC or his or her representative payee should request a letter from SSA verifying the receipt of CDB as a DAC. This letter should be presented to the local Medicaid agency along with a completed application for Medicaid coverage as a DAC.
If you have any questions about the continuation of Medicaid coverage upon receiving CDB when the parent dies, retires or becomes disabled, please call a Fletcher Tilton attorney, who can provide additional information on preserving Medicaid coverage for your adult son or daughter.