It is no secret that there are many costs associated with a disability. As inflation continues to rise, people with disabilities are finding it harder to make ends meet. So, how do disabled people survive financially in today’s economy?
People with disabilities should make sure to take advantage of all the benefits made available to them by the federal and state governments to survive financially. These include Social Security benefits, Veterans Affairs benefits, Supplemental Nutrition Assistance Program (SNAP) benefits, and more.
We’ll talk in more detail about how people with disabilities can survive financially in today’s economy below.
Disabled People and Higher Cost of Living
The cost of living goes up whenever there is an increase in inflation. This is something that can impact anyone financially, but the financial and emotional impacts can be greater for people who have disabilities.
Finances
Disabled people need access to medical care, assistive technology, transportation, and social support and shouldn’t have to choose between participating in or being isolated from their communities.
When it comes to helping those who are disabled, financial assistance is often more effective than almost any other form of assistance, including medical care, rehabilitation, education, social services, advocacy for civil rights, legislation, and philosophies of empowerment.
Medical care, therapies, and adaptive tools are just the beginning of what financial support can do for people with disabilities. Using medical technology to its fullest potential to enhance physical and mental health is expensive in the United States.
The very concept of private health insurance comes with its own financial burden. Copayments can mount up rapidly, particularly for the disabled and the chronically ill, who require treatment and medical supplies on a more frequent basis than once or twice a year.
There are always additional fees and out-of-pocket expenses, even with “free” or “covered” medical care.
Technology
Technology is another factor. It provides ever-improved means of coping with certain impairments, such as more advanced wheelchairs and home automation systems, in addition to, of course, the proliferation of internet-connected mobile devices, laptops, tablets, and home computers.
People with disabilities now have access to previously inaccessible opportunities, thanks to technological advances. But there is a price to pay for all these things, and it is frequently quite expensive.
Furthermore, unlike conventional medical treatments, it is often difficult, if not impossible, to secure funding for technology and equipment. Typically, people who are disabled are required to shell out a significant amount of their own money in order to acquire the most empowering technologies.
A small percentage of the population can actually afford to do it. Those who can afford assistive technology almost always have a significantly better chance of attaining greater levels of autonomy than those who are unable to.
A higher level of physical accessibility can also be purchased, at least within the homes of disabled people and other areas under their direct control.
The construction of ramps, automatic doors, and house elevators, as well as fully accessible restrooms, can make a huge difference in the quality of life for a disabled person. Accessibility funding is considerably more challenging to secure than funding for individual pieces of equipment like wheelchairs.
How Disabled People Can Survive Financially
There are several programs available for disabled people. It is important to participate in these programs in order to get the maximum amount of assistance possible. These programs include:
Social Security Disability Insurance
SSDI refers to the federal government’s disability benefits program. Those individuals who have accumulated a sufficient number of “work credits” are eligible to receive disability benefits from the program.
Earning a specific income each year while also paying Social Security taxes on that income is required in order to accumulate work credits.
SSDI benefits are called earned benefits since they are only offered to people who have paid into the program. However, a disabled individual may be eligible for these benefits based on the employment history of a spouse or parent.
The amount of SSDI payments a person receives is based on a percentage of their average income, up to certain limits. These benefits are available without regard to monetary need.
Supplemental Security Income
The Supplemental Security Income (SSI) program is a federal initiative that provides low-income seniors, disabled, and blind individuals with monthly financial assistance. The program is managed by the Social Security Administration and is funded from general taxes rather than through Social Security levies.
Adults applying for SSI must meet the same disability criteria as those who apply for SSDI. One must have a low income and few assets to qualify for SSI.
In 2023, the maximum monthly federal SSI payout for an individual having no other source of income is $914. Increases in other income result in a reduction in payments, while some states provide additional aid on top of the federal government’s standard contribution.
In 2016, the average number of SSI recipients per month was 8.3 million low-income adults. There were 4.8 million people under the age of 65 who qualified as beneficiaries due to an impairment or blindness, and 2.2 million people beyond the age of 65.
Furthermore, there were 1.3 million children under the age of 18 who received SSI due to a disability or blindness.
Medicare
Medicare is a health insurance program for people over the age of 65; however, Medicare also provides coverage for disabled individuals under the age of 65.
If you are eligible, you will be enrolled in Parts A and B of Medicare without having to take any action on your part, and your coverage will typically begin after you have received disability payments for a period of 24 months.
It is common practice to purchase a Medicare Advantage policy, and most insurers offer Special Needs Plans. This is due to the fact that Parts A and B do not typically offer adequate coverage for the majority of people.
There are premiums and substantial out-of-pocket costs associated with Medicare. Know that you may be eligible for both Medicare and Medicaid at the same time to help with these expenses.
This may help reduce the cost of your Medicare premiums. Remember that even if you do not qualify for Medicaid at the moment, there is a possibility that you will do so in the future as you get older.
ABLE Account
There are limits on the amount of money (and other assets) that an individual can own while still being eligible for government assistance programs like SSI and Medicaid. In the past, a single SSI recipient or a married couple with more than $2,000 in assets would have had their whole SSI payment reduced or eliminated.
The Stephen Beck, Jr., Achieving a Better Life Experience Act (ABLE) became law on December 19, 2014. People who are disabled now have a way to save money without having to worry about losing their government benefits, thanks to ABLE. Most of the time, an individual’s ability to access funds held in an ABLE account is not taken into consideration when determining that person’s eligibility for these programs.
Many people with impairments have benefited from ABLE accounts. Users of the accounts tend to see themselves as savers as opposed to spenders. People with disabilities are learning for the first time that they have the legal right to work and that they can save more money for their futures by working or by contributing to an ABLE account.
The Social Security Administration actively promotes people working to their full potential and saving money to better their lives.
The disabled person themselves, as well as the disabled person’s friends and family members, can invest money in an ABLE account. The funds are not meant to be tax-deductible, but certain states may claim state income taxes. However, any growth in the funds held in the account is completely tax-free.
If an ABLE account holder deposits cash with an institution that is a member of the Federal Deposit Insurance Corporation (FDIC), the FDIC will protect the deposit up to $250,000.
There can be only one ABLE account for a qualified individual. If you use the money in your ABLE account for approved disability expenses, you can withdraw the money tax-free. Those who are gainfully employed are eligible to make contributions exceeding the limit.
There are currently no ABLE programs in Idaho, North Dakota, South Dakota, or Wisconsin. If you are a resident of one of these states, you can join this program in another state. Some states restrict ABLE accounts to their residents only.
Additionally, the maximum amount of money that can be kept in your ABLE account and the fees that are associated with using the accounts vary from state to state.
Supplemental Needs Trusts
A person who has been diagnosed with a disability, or a relative of that person, has the option to set aside money in a supplemental needs trust (also known as a special needs trust) without having their eligibility for government assistance affected in any way.
Prior to 2014, the only type of trust that could be used for this was the supplemental needs trust.
Setting up and taking care of ABLE accounts is easier and costs less money. Nevertheless, they come with a few drawbacks, the most significant of which is a restriction placed on the annual sum of money that can be saved.
Although supplemental needs trusts aren’t subject to these restrictions, they can be costly to set up and administer.
One must adhere to strict guidelines while using money from a supplementary needs trust. You must not use the money to buy food, shelter, or clothing. Instead, the money from such a trust typically goes toward necessary expenditures like healthcare, caregiving wages, transportation costs, and the like.
It is advisable to open an ABLE account for yourself or a member of your family if either of you is eligible for such an account. This will safeguard the disabled individual’s eligibility for government assistance, simplify the process of keeping track of financial outlays, and may provide you with immediate tax benefits.
The primary reason for creating a supplemental needs trust today is if you wish to save more than what ABLE accounts permit (currently, around $100,000) without compromising government benefits. You should hire legal counsel to assist you in establishing a special needs trust if this is the case.
After establishing a supplemental needs trust, you can still use your ABLE account to pay for necessities like food, shelter, schooling, personal assistance services, technological aids, and transportation, in addition to paying for other costs directly associated with your disability and improving your standard of living.
Social Security Emergency Loans
If you are currently receiving benefits from Social Security or Supplemental Security Income, you may be eligible for an emergency loan from Social Security. These are meant to cover an array of unforeseen costs, like those associated with medical care or necessary maintenance around the house.
Repayment of the loan will come directly out of your monthly Social Security or SSI payment. Interim Assistance (IA) programs are available to SSI recipients in some states.
Supplemental Nutrition Assistance Program (SNAP)
SNAP helps low-income families buy more food. Although it is administered at the state and local levels, SNAP is funded by the federal government.
Temporary Assistance for Needy Families
The Temporary Assistance for Needy Families (TANF) program gives funds to states, which the states can then use to help struggling families financially and in other ways. To be eligible, you must meet several conditions, including being unemployed or underemployed and having a low or extremely low income.
You can use your TANF money for things like groceries, housing, and medical care. You may also be eligible for financial assistance for childcare, assistance with job preparation and finding work, as well as other forms of assistance, depending on the state in which you reside.
TANF aid, as the name implies, is often temporary in nature.
Conclusion
Although it is getting increasingly difficult for people with disabilities to survive financially in today’s economy, there are a few things they can try to do to make ends meet, including participating in the government assistance programs intended to assist them.
