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Don't Let DAC Benefits Interfere With Medicaid, SSI
A child with a special need whose parent has become disabled, retired, or died, may be entitled to Social Security Disability Insurance benefits based on the parents' work record. While these benefits, called Social Security Disabled Adult Children's Benefits (DAC), are a great option for many children with special needs, recipients need to be careful that they do not lose their Medicaid benefits.
Who Can Receive DAC Benefits?
DAC benefits are available to individuals who have had a special need since before turning 22 years of age. The amount of DAC is calculated based upon the parents' work records. Once the parents' Social Security benefits are determined, the child generally will receive a percentage of such benefits.
Monitor DAC Benefits to Avoid Losing Medicaid, SSI
If the individual receiving DAC benefits also receives SSI and Medicaid benefits, they will need to monitor the benefits closely to ensure they do not lose Medicaid benefits. DAC benefits are often much higher than the SSI benefits that the individual is also receiving.
As a result, receiving DAC benefits could cause the individual to lose their SSI benefits. A loss of SSI benefits may in turn cause a loss of Medicaid benefits. The loss of these benefits affects individuals who need the medical benefits more than the cash that DAC benefits provide.
Who May Be Able to Retain Their Medicaid Benefits
Congress passed a law to ensure that Medicaid benefits were not lost. Individuals who receive DAC benefits that are high enough to cause a loss in SSI benefits may be able to retain their Medicaid benefits if they:
- are unmarried or married to another beneficiary who is receiving DAC benefits;
- lost benefits for SSI after July 1, 1987, because of the increase in DAC benefits;
- had a special need before the age of 22; and
- would be currently eligible for SSI benefits if it wasn't for the DAC benefit.
If you are looking for guidance regarding eligibility for disability or public benefits and want to know your best options, be sure to consult with a special needs planner near you.