When parents who are divorcing have a child with a disability, child support payments can inadvertently jeopardize the child’s eligibility for SSI (Supplemental Security Income) and other public benefits if specific rules are not followed.
When a minor child lives with a parent, a portion of the parent’s income and assets may be deemed available to the child when determining financial eligibility for SSI. Financial support obligations for children without disabilities typically end when a child reaches age 18 or graduates from high school, but some states require continued child support for children with disabilities who are older than 18 and who are unable to work.
SSI is to be used to pay for food and shelter expenses of a disabled individual. If SSI is paying a child with disabilities $994 per month (the maximum SSI payment for 2026), those funds can help a family pay for the child’s shelter expenses, such as the child’s portion of rent or mortgage. If one parent is granted custody when the parents divorce, the other parent may become obligated to pay child support.
If one parent is ordered to pay child support, these payments will reduce the child’s SSI benefit, because the payments will be “deemed” received by the child even though they are paid to one of the parents, and the result is a reduction in the SSI payment to the child by one-third. On the other hand, if a court requires a parent to pay the support payments into a first-party Special Needs Trust (“SNT”, also referred to as a “(d)(4)(A)” trust), the child could receive the full SSI benefit amount. A first-party SNT holds funds that come to or are paid in the name of a disabled individual, but since this special type of trust allows—actually requires—the trustee to manage the trust funds in his or her complete and total discretion to supplement, not replace, public benefits received by the disabled child, child support payments made payable to this type of trust are not counted by SSI.
To avoid child support payments being “counted” and treated as unearned income for Supplemental Security Income (SSI) purposes, these payments must be irrevocably (not subject to any change) directed by a court order to be paid into a first-party SNT. This type of trust, as well as a third-party SNT, which is a trust funded with the assets of third parties, such as parents, grandparents and others, preserves eligibility to public benefit programs such as SSI, Medicaid, and SNAP (Supplemental Nutrition Assistance Program–“food stamps”) while ensuring that funds are available to enhance the quality of life of a disabled person through the use of the SNT funds.
First-party SNTs are subject to a Medicaid payback requirement. Upon the beneficiary’s death, the trust must repay any state Medicaid program that provided benefits to the beneficiary, up to the total amount of Medicaid assistance received, before any remaining funds may pass to other beneficiaries.
If a child develops disabilities after parents have divorced, or if the parents were never married, the attorney representing the parent who will receive child support should ask the court to incorporate the need for additional support (directed to an SNT, if appropriate) into the divorce decree or child support order. In addition, if child support payments are already being made directly and not to a trust, in many cases the child support order can be modified to irrevocably direct these payments to a first-party SNT.
The interplay between child support and a disabled child’s eligibility and receipt of public benefits requires careful legal planning. The family law and estate planning attorneys at Paule, Camazine & Blumenthal. P.C. can explain all of your options and give you peace of mind to help your disabled child receive all the benefits they are eligible for.
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