May is Mental Health Awareness Month

Major depression has been discovered to be the single largest cause of disability in the world, despite that fact, it routinely goes unrecognized, undiagnosed and untreated. (Courtesy of BET)
Major depression has been discovered to be the single largest cause of disability in the world, despite that fact, it routinely goes unrecognized, undiagnosed and untreated. (Courtesy of BET)

When you have a child or family member with mental health issues it is even more important that you complete an estate plan. The strategic planning or lack of planning will impact the life of a loved one considerably if their disability impacts their financial supports.

I am clear that mental health should be measured on a continuum. Many, if not all of us, have issues that would be considered mental illness. Many of us are able while to stay gainfully employed. Many people become unable to work due to mental or physical illness. Two programs that are administered through the Social Security Administration for people with disabilities are 1) Social Security Disability Insurance and 2) Supplemental Security Income Programs.

Social Security Disability Insurance (SSDI) is a program for people who have worked and paid into Social Security. In general, to get disability benefits, you must meet two different earnings tests: 1) a recent work test, based on your age at the time you became disabled and 2) the amount of time that someone has worked and contributed into Social Security. This program does not measure your assets to determine eligibility. There is an income limit that will reduce the distribution based upon other income sources.

Supplemental Security Income (SSI) is a Federal income supplement program funded by general tax revenues. It is designed to help aged, blind and disabled people who have little or no income or resources and it provides cash to meet basic needs for food, clothing and shelter. The value of your resources is one of the factors that determines whether you are eligible for SSI benefits.  However, not all resources count for SSI.  If the value of your countable resources is over the allowable limit which is $2,000 for an individual at the beginning of the month, you cannot receive SSI for that month.  If you decide to sell the excess resources for what they are worth, you may receive SSI beginning the month after you sell the excess resources. You may even be able to receive benefits while you try to sell the excess resources in certain situations.

The Supplemental Security Income (SSI) program is a crucial component of the social safety net for low-income adults with severe disabilities. In addition to providing federal cash payments (with optional state supplements), SSI often serves as a gateway to health insurance under Medicaid. Although SSI and Medicaid are both means-tested programs, financial eligibility for SSI is determined using standard national criteria, whereas Medicaid is administered by the states, which have considerable leeway in developing Medicaid eligibility policies. In 40 states and the District of Columbia (41 jurisdictions), SSI awardees are categorically eligible for Medicaid. In 34 of those jurisdictions, the Social Security Administration (SSA) promptly notifies the state Medicaid agency of an individual’s categorical eligibility for Medicaid upon award of SSI payments using an electronic transmission process—in other words, Medicaid enrollment is automatic.

While the cash distribution of the SSI may seem minimal, the value of the Medicaid is substantial. Health insurance can be lost if there is a period when the person has more resources can include mental health provides the supports needed that greatly exceeds the monthly allocation of cash.

When a person receives a distribution from an inheritance with or without a will, the beneficiary may lose their governmental benefits. If we have loved ones with disabilities and mental illness, this requires greater strategic planning for support.

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