Questions?Why You Need a Financial Plan for Your Child
The reality is that many disabilities require specialized lifelong care. Sadly, many families are unprepared to pay for costly treatments and unforeseen out-of-pocket medical expenses.
A 2022 study by Fidelity Investments® found more than half of caregivers of loved ones with disabilities had little time to prepare before assuming financial responsibility.
Thankfully, birth injury financial support is available to help families afford the medical care their child needs. Families can access financial support through government programs, grants from nonprofit health organizations, and lawsuits.
Children with special needs may require extra support such as:
- Assistive devices
- Corrective surgery
- Medical equipment
- Medication
- Mobility aids
- Occupational therapy
- Physical therapy
- Special education
- Speech therapy
- Transportation assistance
All of these expenses can add up quickly. On top of that, parents may have to leave their full-time jobs to care for their child, especially if they have a permanent disability like cerebral palsy. This only makes the family’s financial situation more daunting.
“When an infant or young child is diagnosed with a disability, the family’s lives are changed forever.”
When parents begin to think about what will happen to their child after they retire or pass away, the need for a solid financial plan can seem urgent. Many parents may feel overwhelmed, not knowing where to begin.
One of the most important steps to creating a solid financial plan for your child with special needs is taking a realistic assessment of what costs are involved.
18%
About 18% of children in the United States — or 1 in 5 households — have special health care needs.
What Is the Cost of Raising a Child With Special Needs?
The U.S. Department of Agriculture estimates that it takes $240,000 to raise a child from birth to age 18. Alarmingly, expenses for children with special needs can add up to four times this amount, hitting $1 million or more.
While these costs vary greatly depending on the severity of the disability, they range on average from $1.4 million for a child with autism to $2.3 million for children with severe intellectual disabilities.
These unplanned expenses can leave families with few options other than making financial moves that are generally not recommended.
Many parents of children with disabilities are forced to take out second mortgages, apply for high-interest loans, or withdraw money from 401Ks before retirement to pay for their child’s care.
Quick Facts: Costs of Raising a Child With a Disability
- In 2003, the Centers for Disease Control and Prevention (CDC) estimated that the average lifetime cost to care for an individual with cerebral palsy is $1 million. When adjusted for inflation, that’s about $1.6 million as of March 2023.
- According to Autism Speaks, the annual cost to care for an individual with autism is estimated at $60,000 when special care and lost wages are considered.
- Less than half of the expenses of caring for a child with special needs are covered by Medicaid and the Children’s Health Insurance Program (CHIP).
- Mothers of children with an autism spectrum disorder earn 56% less than those who have children without special needs.
- Families provide 1.5 billion hours of care to 5.6 million children with special needs. If home health aides were paid to provide this same care, it would cost $35.7 billion.
Although these statistics are alarming, several types of need-based financial support options are available to help your family. Government assistance, nonprofit grants, and medical negligence claims are common forms of financial support for families of children diagnosed with disabilities.
What Government Benefits Are Available for My Child?
The federal government offers two main types of benefits to families raising children with disabilities: cash payments and health care.
For comprehensive information on government benefits, visit:
- United States Government Disability Services
- 2023 Social Security Administration Benefits for Children With Disabilities
To ensure you get accurate information, only visit official government sites that have a .gov web address.
Cash Payments for Children With Disabilities
If you have limited income and savings, you may be entitled to monthly cash payments from the government to help meet your child’s health care needs. The following options may be available to you and your family.
Supplemental Security Income (SSI)
If your child has a qualifying disability and your family meets the Social Security Administration’s (SSA) low-income requirements, you may be eligible for Supplemental Security Income (SSI).
It is important to understand that whether you qualify will depend on a formula set by the SSA. To get the most recent information on eligibility criteria, visit the SSA’s page on Understanding Supplemental Security Income SSI for Children — 2023 Edition.
Social Security Survivor Benefits/Social Security Disability Benefits
In the event that you should retire, become disabled, or pass away before your child turns 18, they may be eligible to receive survivor benefits from the SSA, as long as they are not married.
However, this will depend on whether you qualify for Social Security benefits. If you do, the amount your child can receive will be calculated using your own lifetime earnings.
Use the SSA Calculator to estimate how much money your child may be eligible to receive in survivor’s benefits should something happen to you.
Additionally, your child may be eligible to receive Social Security Disabled Adult Child (DAC) benefits when they turn 18 if they continue to meet eligibility requirements.
Temporary Assistance for Needy Families (TANF)
Temporary Assistance for Needy Families (TANF) is a federal program that provides low-income families with financial assistance and other support services.
Unemployed or low-income U.S. citizens, legal aliens, and permanent residents are eligible for TANF.
Applicants must also meet one of the following requirements:
- Be 18 years of age or younger and the head of their household
- Be pregnant
- Care for a child 18 years old or younger
Each state determines its own TANF benefits for residents. In addition to cash assistance, states generally offer child care, preschool education, child welfare, work support, refundable tax credits, and other benefits through federal TANF funds.
Learn more about TANF on the U.S. Department of Health & Human Services official website.
Supplemental Nutrition Assistance Program (SNAP)
The Supplemental Nutrition Assistance Program (SNAP) is a federal program designed to ensure children can access the food they need to stay healthy.
Formerly known as the Food Stamp Program, SNAP can help eligible families buy nutritious food that they couldn’t otherwise afford. SNAP benefits are generally distributed by each state and come in the form of prepaid debit cards.
Special Supplemental Nutrition Program for Women, Infants, and Children (WIC)
The Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) is a federal program that gives financial assistance for supplemental food to pregnant women and women with young children.
To qualify for WIC, women must meet several residential, income, and nutritional risk requirements.
Other benefits of WIC include:
- Breastfeeding education and support
- Dental health counseling
- Individual counseling and referrals for health services
- Nutrition education to promote healthy eating habits
- Vaccination record checks
- Vouchers to purchase nutritious food
Check your eligibility to receive WIC benefits on the U.S. Department of Agriculture’s Food and Nutrition website .
VA Pensions
Benefits under the Veterans Pension program may be available from the U.S. Department of Veterans Affairs (VA) to some wartime veterans and their survivors. You can check your eligibility on the VA.gov site.
Government Health Care Benefits
In addition to the various cash payment options that may be available to you through government programs, you may also be eligible for assistance with health care.
Medicaid
Medicaid offers health insurance coverage to low-income families. It is administered by the federal government, but each state determines which services are available.
Applications are processed through your state’s Medicaid agency or through the Health Insurance Marketplace.
Services covered under Medicaid may include:
- Communication devices
- Home and vehicle modifications, such as ramps and safety rails
- Home care
- Inpatient/outpatient care
- Meal delivery services
- Medications
- Medical supplies and equipment
- Personal care services (at home or in an assisted living facility)
- Psychological services
- Respite care designed to give primary caregivers relief
- Support and case management
- Transportation services (medical and non-medical)
You can learn more by visiting the official Medicaid website.
Children’s Health Insurance Program (CHIP)
CHIP is an insurance program administered by the U.S. Department of Health & Human Services (HHS). It offers low-cost insurance coverage to children of families earning too much to qualify for Medicaid but not enough to afford private insurance.
Each state offers CHIP, which works hand-in-hand with Medicaid. Unlike other insurance programs, you can apply for CHIP anytime, and coverage can begin immediately.
Medicare
Medicare is a federal health insurance program for the elderly and individuals with disabilities. People who receive Social Security Disability Insurance (SSDI) are eligible for Medicare regardless of age.
Generally, in order for your child to qualify for Medicare, they must:
- Be under the age of 20 (or if over 20, have received SSDI for two years before applying for Medicare)
- Have a disability that occurred before turning 22 years old
- Have received SSDI benefits for 24 months
-
Medicare Part A
(hospital insurance)
Covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care
-
Medicare Part B
(medical insurance)
Covers certain doctor visits, outpatient care, medical supplies, and preventive services
-
Medicare Part D
(prescription drug coverage)
Covers the cost of prescription drugs and many recommended vaccinations
Visit Medicare’s “Can I Get Medicare Coverage for My Children” FAQ page to learn more.
Government Health Care Benefits
Military service members and veterans who have children with disabilities may be able to get free or affordable care from the federal government.
Government health care benefits for children with disabilities include:
- TRICARE (for active duty and retired military)
- TRICARE Extended Health Care Option (ECHO)
- Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA)
The Birth Injury Justice Center also has a dedicated page on resources for military families raising children with disabilities.
Housing Resources for Children With Disabilities
Home modifications are adjustments that help individuals with disabilities complete daily tasks and overcome any physical obstacles in their homes. These barriers may prevent the person from entering or using a living space.
The U.S. Department of Housing and Urban Development (HUD) and the Fair Housing Act can help families afford home modifications.
Funding for home modification assistance can come from:
- Federally assisted housing
- Housing Choice Vouchers (Section 8)
- Property Improvement Loans (Title I)
- Rehabilitation Loans (Section 203(k)
Grants for Children With Special Needs
Grants for families of children with special health care needs are offered through nonprofit organizations and some state or federal government programs.
While the terms of grants vary, they are usually financial awards given to those who meet certain eligibility criteria. A key difference between a grant and a loan is that grants usually do not have to be paid back.
Grants may be specific to a condition, such as autism spectrum disorder. For example, Autism Care Today SOS Program provides quarterly grants to families of children with autism spectrum disorders.
Autism Speaks offers this helpful list of grants available for families affected by autism spectrum disorder.
Additionally, United Healthcare Children’s Foundation provides medical grants to children across the country with special needs.
You may also be able to find grants available in your local community by connecting with Easterseals, a non-profit organization dedicated to supporting people with disabilities for over 100 years. Find your local Easterseals office.
Disability or housing grants can help families with special needs pay for medical treatment, adaptive equipment, and living expenses.
Financial Tips for Families of Children With Disabilities
Since many financial resources available to families depend on strict eligibility requirements, the first step is to conduct a needs assessment of your child.
By assessing what special equipment and home accommodations your child will need, you can get an understanding of costs.
You will then need to understand your household income and how it relates to the Federal Poverty Level (FPL).
You can review the latest FPL chart here:
| Family Size | 2022 Income numbers | 2023 Income Numbers |
|---|---|---|
| Individuals | $13,590 | $14,580 |
| Family of 2 | $18,310 | $19,720 |
| Family of 3 | $23,030 | $24,860 |
| Family of 4 | $27,750 | $30,000 |
| Family of 5 | $32,470 | $35,140 |
| Family of 6 | $37,190 | $40,280 |
| Family of 7 | $41,910 | $45,420 |
| Family of 8 | $46,630 | $50,560 |
| Family of 9+ | Add $4,720 for each extra person | Add $5,140 for each extra person |
Financial Planning for Adulthood
If your child has a severe disability, the reality is that you should not only plan for childhood but also for when they reach adulthood.
When your child reaches 18, they are considered an adult, even if they have a disability. Therefore, your family’s eligibility for disability benefits will change.
According to the American Bar Association (ABA), there are certain milestones and tools that can help families create a financial plan.
Lifetime planning for an individual with special needs may include:
- Applying power of attorney to grant certain legal rights and decision-making authority to someone you trust
- Building your savings
- Creating a special needs trust and naming a trustee
- Educating family members by sharing the lifetime plan
- Naming a guardian to replace you when the time comes
- Planning for your child’s independence
- Writing your will laying out clear instructions for your child’s care
ABLE Accounts are tax-advantaged savings accounts for individuals with disabilities and their families.
Birth Injury Lawsuits
Many disabilities cannot be prevented. However, there are certain cases when they can result from medical negligence during pregnancy, labor, or delivery. In these tragic cases, families may have the option to access the money through a birth injury lawsuit.
While many parents may be uncomfortable at the thought of a lawsuit, those harmed should not have to suffer extreme financial burdens for someone else’s mistakes.
Some families who file birth injury lawsuits have recovered millions of dollars for lifelong care.
Filing a birth injury medical malpractice lawsuit can help you obtain the financial compensation needed to support your family and provide your child with the treatment they need.
For more information and resources that can help, download our Free Birth Injury Guide.
