(The material in this article is not to be regarded as providing advice for any individual case. Because regulations vary from state to state, you should consult appropriate legal professionals before acting on any information in this article. This article was originally published in Exceptional Parent, November 1997.Parents of children with disabilities have special planning needs that need to be addressed if the parents are in the midst of a divorce.)
Divorce Issues When A Child With A Disability Is Involved
by Theresa Varnet
Eligibility For Benefits
When the parties in a divorce action have a child with a disability who is receiving Supplemental Security Income (SSI) or Medicaid, the divorce agreement should be structured so that the child does not lose his or her eligibility for SSI. SSI and Medicaid may be affected if the parent who has custody of the child with the disability receives alimony or if the custodial parent receives child support which is to be used for food, shelter and/or clothing.
If the parent receives alimony in the form of a cash payment directly from his or her ex-spouse, the amount of alimony will be deemed as income. If this amount is in excess of the SSI family income allowance, the child will lose his or her eligibility for SSI and may also lose his or her eligibility for Medicaid.
However, under current regulations, the Social Security Administration will not count the value of the alimony received as “income” if it is not received in the form of a cash payment to the custodial spouse. The non-custodial spouse could agree to pay the same amount of money, normally paid for alimony, directly to the cost of living expenses. These expenses include shelter, homeowner’s insurance, real-estate taxes, automobile insurance or maintenance, sewer, heat or utilities. This will not result in a decrease in the child’s SSI cash benefits. The non-custodial parent must actually pay the bills directly to the landlord, bank, service provider; etc, and not give the custodial parent money to pay the bills. If the non-custodial parent pays for “inkind supports” in lieu of cash alimony and pays for these goods or services directly, this type of inkind support is not deemed to the child and will not affect his or her eligibility for SSI.
In the same way, child support may also affect a child’s eligibility for SSI
depending on whether or not the child support is in the form of a direct payment to a custodial spouse or whether it is in the form of “In-kind support” for non-food, shelter or clothing expenses.
Under current regulations, it will be more beneficial for the child if the non-custodial spouse agrees to provide child support in the form of payments for items such as therapies, after-school child care tutors, educational equipment or supplies, transportation, private school or summer camp tuition, medical care not otherwise covered by Medicaid, etc. If the non-custodial parent pays the service provider directly for these items and not the custodial parent, the purchase of these in-kind services will not affect the child’s eligibility for SSI.
These strategies should be considered for all families, but especially for those families who have marginal assets and whose receipt of SSI may be critical to the ability of the custodial spouse to maintain the child in his or her home. Obviously, these strategies are less useful for upper income families who are in a financial position to comfortably provide for a child’s extraordinary care needs.
Theresa Varnet, Esq., author of
Divorce Issues When a Child With a Disability is Involved,
is a partner at the law firm, Spain, Spain & Varnet, P.C. with offices in Illinois and Massachusetts. She also holds a Masters of Social Work degree. She is the parent of a daughter with tuberous sclerosis and mental retardation. Ms. Varnet is known for her advocacy on behalf of people with disabilities and for her workshops on future planning for people with disabilities and their families. She is the current the President of the Board of Directors of Arc Massachusetts.