Child support paid on behalf of your child with special needs impacts the amount they receive from SSI, whether they are under the age of 18 or receive child support as an adult paid beyond the age of 18. The child who receives SSI under the age of 18 will have up to two-thirds of the child support payment reduce the SSI benefit. When your child with special needs turns 18 and becomes an adult, the entire amount of the child support payment will be treated as income to the child and reduce his or her SSI benefit, all but for $20.
Child support is designed to be a financial benefit to the child and to help support the child’s basic needs. In similar fashion, SSI’s purpose is to provide cash to meet the basic needs for food and shelter, or a minimum level of income for persons who are disabled. Unfortunately, the benefit provided by child support payments for a disabled child is lost due to this, resulting in an offset against the receipt of any SSI benefit.
There is a little known solution to this problem of not receiving the benefit from both the child support payments and the SSI benefit. At any point in time, child support payments may be directed to an irrevocable first party special needs trust. By assigning the child support payments to the trust, usually by action through the Court, the SSI benefit will not be reduced; and the child support payment will no longer be seen as income received by or on behalf of the child for SSI purposes.
Please contact us if you would like to know more about this solution to protect your child’s SSI benefit if he or she is receiving child support.