How to handle financial challenges when supporting loved ones with disabilities 

It’s a scenario many people aren’t prepared for: A loved one becomes disabled and requires your care. That care can bring financial challenges you may not be prepared for. In fact, the Centers for Disease Control and Prevention (CDC) reports that a person with a disability in the U.S. will spend $17,431 each year on average for healthcare expenses—in many cases, for the rest of their lives.

What’s more, medical costs may only scratch the surface of the financial repercussions. A person with a disability may lose some or all of their wage-earning ability, and the individual caring for them might also have to work fewer hours. You may incur additional expenses for home modifications, assistive devices, or occupational therapy, and a child or adult with a disability may also need specialized caregivers.

If all of this sounds overwhelming, take heart. Many financial resources exist that are designed to help people who are supporting a disabled adult or child, as well as to help secure your loved one’s financial future. Here are important things you need to know to make that happen.

Defining a disability

A basic definition of disability is any condition that challenges a person’s ability to perform certain activities or interact with their surroundings. But that definition may become more nuanced when it involves someone’s ability or inability to work, as well as any government benefits they are entitled to receive. 

For adults, the Social Security Administration (SSA) defines a disability as any mental or physical condition that is expected to be continuous in nature for at least 12 months that renders a person unable to perform the duties required by a job. To meet the SSA’s definition, people must have “a severe impairment(s) that makes you unable to do your past relevant work … or any other substantial gainful work that exists in the national economy.”  

Per the SSA, a child is considered to have a disability (and be eligible for benefits) if they “have a physical or mental condition that very seriously limits his or her activities” and if this condition has lasted or is expected to last for longer than a year.

Assessing whether your loved one’s disability meets the SSA’s definition is the first step in researching available benefits. Your family healthcare provider or a professional advisor who specializes in disability benefits may be able to help you make this determination.  

Benefits for children with disabilities

Children with disabilities are entitled to multiple government benefits to ensure they have quality healthcare, as well as services and supplies to meet their basic needs. One form of aid is Supplemental Security Income (SSI), which is distributed by the SSA. The requirements for children to receive this supplemental income include: 

• The applicant must have little or no income.
• The applicant must have few or no assets. 
• The applicant must have a disability (including blindness).

The amount of money received by each approved applicant is determined by various factors, such as where they live and how much they own.  

“Qualifying for SSI is critical,” says CPA James Lange of Lange Financial Group in Pittsburgh, “because it simultaneously qualifies you for other benefits.” 

For example, in most states, children with disabilities who qualify for SSI are automatically eligible for Medicaid healthcare coverage. If a child with a disability does not qualify for SSI, they can sometimes still receive Medicaid benefits via a Medicaid waiver, which waives the income- and resource-related thresholds for qualification—in other words, your child could receive Medicaid benefits regardless of your income or assets. These policies can differ from state to state, so check your home state’s department of health and family/social services website for the most accurate and current information. 

The bottom line when it comes to SSI, Lange reiterates, is to be proactive. “Don’t procrastinate,” he explains. “Getting all of this right will make a huge difference in your and your child’s life. You may be in for a long and difficult process of providing for your child and should do everything you can to take advantage of government programs.”

Finally, families who earn too much to qualify for Medicaid may still be eligible for the Children’s Health Insurance Program (CHIP), a government program that offers low-cost health insurance to children. If the parent of a child with a disability earns too much to qualify for Medicaid benefits but still struggles to pay healthcare expenses, CHIP can be a helpful solution. As with Medicaid, each state runs its CHIP program differently, so check your home state’s website for more information.

Benefits for adults with disabilities 

Adults with a disability may also be eligible for SSI if they have little or no income, few or no resources, and have a disability (including blindness) or are age 65 or older. They may also be eligible for Medicaid benefits and Medicaid waivers. 

In addition, those who previously worked a certain number of years and paid into Social Security may qualify for Social Security Disability Insurance (SSDI) benefits. Eligibility for SSDI is based on two requirements. The individual must have: 

• A disability that prevents the individual from working for at least a year
• Years of work during which they have earned sufficient Social Security credits  

Of course, each case is different, and eligibility will be determined by the SSA. 

“It can be tricky to navigate some of the rules around SSDI,” says Dan Stous, a Certified Financial Planner^® and lead wealth advisor at Flagstone Financial Management in Lincoln, Nebraska. “But in a nutshell, you should be aware that your disabled loved one may qualify for federal financial aid.”

Adults with disabilities who continue to work  

People with disabilities can receive disability benefits and continue to work—up to a point. Someone receiving SSDI payments may not earn more than what’s known as substantial gainful activity (SGA). As of 2024, that amount is $1,550 per month. However, people who are blind have a higher SGA of $2,590.

Adults ages 18 to 64 with a disability who want to work can get a leg up through the Ticket to Work program, a government program designed to help people with disabilities find employment that’s right for them. The program guides participants through free employment services that can help them determine whether they are able to work, prepare to enter the economy, find a job, and be successful in the workplace. 

Veterans with disabilities 

Veterans with certain disabilities can qualify for monthly pension benefits, depending on yearly income and net worth. To be eligible, Veterans:

• Must not have been dishonorably discharged
• Must have served a certain length of time in the military—including at least one day during wartime—or have served as an officer
• Must be at least one of the following:
  • Over the age of 65, permanently and totally disabled, living in a nursing home or long-term care facility due to a disability, or receiving SSDI or SSI payments

Caregiver support

A caregiver may get overwhelmed by aspects of providing care to a loved one, including managing finances. They may also struggle with the everyday demands of caregiving. Fortunately, resources exist that can help ease these hardships.

Some states offer programs that compensate family members or friends caring for a relative who receives Medicaid benefits. These programs vary significantly between states and often have complex eligibility requirements, so it’s important to do your research before applying. 

If the individual you’re caring for (say, your spouse) previously purchased a long-term care insurance policy, they may be eligible to submit claims for in-home care. Some policies will also provide compensation for a family caregiver. Contact your insurance agent and ask for a written confirmation of benefits.

For Veterans specifically, in-home care is accessible through Veteran-Directed Care, a government program that provides services to Veterans who need assistance with daily activities. This program can supplement the caregiving provided by a loved one to ease their care workload. Veterans who qualify can also make use of Aid and Attendance benefits or Housebound benefits, which are monthly payments that can be put toward in-home care for those with permanent disabilities. 

If you’re the parent of a child under the age of 18, are unemployed or underemployed, and can demonstrate that you have a low or no income, you may qualify for Temporary Assistance for Needy Families. This government program provides states with grant money to assist families that are struggling financially. If you qualify, you may receive a monthly cash payment for a set period. For many states, the lifetime limit of this aid is five years.  

You might also consider applying for benefits from the Supplemental Nutrition Assistance Program (SNAP), which offers subsidies for food purchases to ensure that those with low or no income can maintain good nutrition. The SNAP program has special eligibility guidelines for those with disabilities, which may make it easier for those who already qualify for SSI or SSDI to also qualify for food assistance.

Banking options for people with disabilities

People who are disabled have access to special banking accommodations, including ABLE accounts, which allow people with disabilities to set aside savings without being taxed on the earnings of those accounts, as long as they spend the money on qualified expenses. (In this way, these accounts are similar to 529 college savings accounts.)

Another key benefit: For the most part, savings in an ABLE account won’t affect eligibility for SSI, Medicaid and other means-tested programs. 

Right now, ABLE accounts are available to people who became disabled before the age of 26. But thanks to the recent ABLE Age Adjustment Act, that threshold will increase to age 46 starting on the first day of 2026.

“I’ve found that ABLE accounts aren’t as well-known as I would have hoped among parents of children with disabilities,” says Stous. “They’re a great tool to help financially care for a disabled loved one and can act as a first step in that journey of preparing for when you may no longer be around and your child can no longer rely on your income to help meet their needs.”

There are limits to the amount of money that can be deposited into an ABLE account each year—$18,000 in 2024, with additional annual contributions allowed for ABLE account holders who work and who don’t participate in an employer-sponsored retirement plan. There are also limits to what the beneficiary can spend the money on—qualified expenses include things like education, healthcare, assistive devices, and employment training. It’s also helpful to keep in mind that even if your state doesn’t offer an ABLE account program (though most do), you can enroll in another state’s program even if you’ve never lived there. 

Accessible facilities and products

Many banks also provide assistive technologies for people with disabilities to make their banking experience easier. These can include things like spaces designed to accommodate people who use wheelchairs or other mobility devices, digital banking interfaces that can be used even by those who have difficulty seeing images or colors, and ATMs that are accessible to all. 

You can help a loved one with a disability

For people with disabilities and the loved ones who care for them, financial concerns can be significant—but there are numerous solutions to make them easier to navigate. With the right tools and the needed know-how to make wise decisions, meeting the financial challenges that a disability can bring becomes infinitely more manageable. 

Looking for ways to pay for upgrades that make your home more accessible? Learn how to finance home modifications that will support your loved one with disabilities.

The article and information provided herein are for informational purposes only and are not intended as a substitute for professional advice. Please consult your financial advisor with respect to information contained in this article and how it relates to you.

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