Educating Children With Special Health Care Needs –CSHCN

Federal Mandate...3 Federal Laws
Financial Services Professionals need to be aware that federal law mandates that every child will receive a free and appropriate education in the least restrictive environment. To support their ability to learn in school, three Federal laws apply to children with special needs:

• The Individuals with Disabilities Education Act (IDEA) (1975)
• Section 504 of the Rehabilitation Act of 1973 
• The Americans with Disabilities Act (ADA) (1990).

Different states have different criteria for eligibility, services available, and procedures for implementing their laws. It is important for parents to be aware of these laws and regulations in their particular area.

The Laws and Statute

• IDEA is a federal law (1975, amended by the Office of Special Education Programs in 1997) that governs all special education services for children in the United States. Under IDEA, in order for a child to be eligible for special education, they must be in one of the following categories: serious emotional disturbance, learning disabilities, mental retardation, traumatic brain injury, autism, vision and hearing impairments, physical disabilities, and other health impairments.
• Section 504 is a civil rights statute (1973) that requires that schools not discriminate against children with disabilities and provide them with reasonable accommodations. It covers all programs or activities, whether public or private, that receive federal financial assistance. Reasonable accommodations include untimed tests, sitting in front of the class, modified homework and the provision of necessary services. Typically, children covered under Section 504 either have less severe disabilities than those covered under IDEA or have disabilities that do not fit within the eligibility categories of IDEA. Under section 504, any person who has an impairment that substantially limits a major life activity is considered disabled. Learning and social development are included under the list of major life activities.
• The ADA (1990) requires all educational institutions, other than those operated by religious organizations, to meet the needs of children with psychiatric problems. The ADA prohibits the denial of educational services, programs or activities to students with disabilities and prohibits discrimination against all such students. Source: The American Academy of Child and Adolescent Psychiatry 3615 Wisconsin Avenue, N.W. Washington, D.C.20016-3007  AACAP

What Percentage Of Students With Disabilities Are Educated In Regular Classrooms?
The percentage of time special needs students spent in a general classroom varied by race/ethnicity. For example, White students with disabilities were more likely than students of any other race/ethnicity to spend 80 percent or more of their day in a general classroom. In contrast, Black students with disabilities were more likely than students of any other race/ethnicity to spend less than 40 percent of their day in a general classroom and were the most likely to receive education in a separate facility for students with disabilities. American Indians/Alaska Natives and Hispanics with disabilities were less likely than students of any other race/ethnicity to receive education in a separate school facility for students with disabilities. Source: The National Center for Education Statistics (NCES), located within the U.S. Department of Education and the Institute of Education Sciences, is the primary federal entity for collecting and analyzing data related to education.

Lifetime Care for Children With Special Health Care Needs –CSHCN

• Current federal law requires that any inheritance of more than $2,000 can disqualify an individual from federal assistance. For example, Supplemental Security Income (SSI) could be reduced or cancelled for up to three years if a special needs child receives an inheritance or life insurance benefit. Inheritances could also affect eligibility for state assistance programs.
• Leaving assets directly to the child from a parent, grandparent or other relative may disqualify them from government benefits and they may not be capable of managing the asset.
• Naming the child as beneficiary of the life insurance policy, annuity or retirement plan can disqualify them from government benefits.
• If you leave the child's inheritance to another family member to manage on behalf of the child...These assets would then be subject to any bankruptcy, divorce or litigation against the assets' owner. If the owner may predecease the child, the assets would be subject to the terms of the owner's will.

Special Needs Trusts
Special Needs Trusts can help. Special Needs Trusts are legal entities that owns assets i.e. savings, stocks, property or benefits paid from a life insurance policy. A trustee manages the assets (such as investing them or dispersing them) and is not allowed to personally benefit from the trust. The beneciariy is the special needs child.

Reasons to Establish a Special Needs Trust
Special needs Trusts –SNTs play an important role in helping families plan for children with special needs. Here are some of the most compelling reasons to speak with your attorney about establishing an SNT.

1. Preserve public benefits while enhancing your child’s lifestyle. As adults, many individuals with significant special needs obtain basic support from Supplemental Security Income (SSI), which also is the gateway to Medicaid and other critical programs. Since SSI covers only essential expenses, most parents want to supplement their child's lifestyle. But because SSI imposes limits on income and assets, providing funds to the child directly can jeopardize benefits eligibility. Generally, the best solution is placing funds in an SNT. The Social Security Administration (SSA) does not count assets in an SNT as income for determining benefits eligibility because the assets are owned by the trust rather than the child beneficiary.
2. Ensure assets will be used as intended. With an SNT, distribution of assets is directed by trust documents as well as SSA and IRS guidelines. By comparison, if you leave assets to a n “able-bodied” child and ask that some of the funds be used for the sibling with special needs, the child may fail to honor your request, lose the assets to creditors or die prematurely and leave the funds to his or her own children.
3. Allow others to contribute. If you establish the trust now, grandparents and others interested in helping your child can make annual gifts (current federal annual gift exclusion) to the SNT of up to $12,000 ($24,000 for a married couple) without triggering the gift tax or generation-skipping tax. Anyone interested in leaving your child money should be advised to direct bequests to the SNT.
4. Fund the SNT as you wish. SNTs can be funded with cash, securities or other resources. Often, a second-to-die life insurance policy offers the most affordable option, enabling a family to fund an SNT without depleting assets required for other household needs. If assets in an Individual Retirement Account (IRA) will represent a large portion of your estate, it’s important to speak with an attorney about the most tax-efficient way to transfer those assets to an SNT.
5. Identify appropriate distributions. If you establish and fund an SNT while your child is young, you can use the trust like a checking account to pay the child’s expenses. A future trustee can then refer to a record of these payments as a guide in determining necessary and appropriate distributions.
6. Maximize the benefits of a personal injury settlement. If your child wins a sizable settlement, having the payout (often a lump sum plus a structured settlement) directed to a self-settled SNT offers several benefits. Your child will still qualify for public benefits, can use settlement funds for nonessential expenses and may enjoy the financial security of receiving regular payments for life.
7. Enhance matrimonial settlements. If an adult child who receives SSI and Medicaid divorces, having a self-settled SNT drafted through the divorce decree will allow any alimony or lump-sum payment from your child’s ex-spouse to be paid to the trust. With public benefits intact, it’s possible your child may need less from the ex-spouse. That could help ease matrimonial negotiations while still providing your child with ample resources.

"Anyone can give up, it's the easiest thing in the world to do. But to hold it together when everyone else would understand if you fell apart, that's true strength." - Christopher Reeves (Superman)

    Permalink | Print

Tara Chabria posted on Wednesday, February 10, 2010

Tags: Childern Special Health Care Needs, CSHCN, Special Needs Children

Posted in: Site News, Special Needs

Related Articles

Who Are Special Needs Children? Who Are Children With Special Health Care Needs –CSHCN The Department of Health and Human Services, Health Resources and Services Administratio...

top