Transition-Aged Youth with Disabilities and Social Security Benefits, with a Focus on Childhood Disability Benefits
Description: This article provides an essential guide on how transition-aged youth with disabilities navigate the shift into adult Social Security benefits. It places a special focus on Childhood Disability Benefits (CDB), outlining eligibility criteria, impact on family dynamics, and critical strategies for preserving vital work incentives during this pivotal life transition.
Introduction
Transition-aged youth are often defined as those in the 14 to 25 age group. These young people, their families, and their service providers face the challenge of understanding various forms of Social Security available to youth in their later teens and into their early 20s. This article will focus on the following range of Social Security Benefits encountered by some individuals in the 14 to 25 age group:
Child’s Insurance Benefits (CIB), typically available on a parent’s Social Security record and available through age 18 or 19 if in elementary or secondary school.
Childhood Disability Benefits (CDB), available as early as age 18, when the child becomes an adult.
Social Security Disability Insurance (SSDI) as a wage earner.
Supplemental Security Income (SSI), available in some cases to supplement payments received through one of the three Social Security programs.
We will also briefly touch on eligibility for Medicare in connection with CDB and SSDI eligibility, and Medicaid in connection with SSI eligibility in most states.
CIB: Available through Age 18 or 19, on the Earnings Record of a Parent
Child’s Insurance Benefits are often referred to as dependent’s or auxiliary benefits. They are available to an unmarried natural child, adopted child, stepchild, or (in limited cases) dependent grandchild of a wage earner who paid into the Social Security trust fund and who is now getting SSDI or Retirement benefits, or is deceased.
Since eligibility is based on a dependency relationship with a parent, stepparent, or other person in a parent-like relationship, there is no need to establish a disability. Benefits continue through age 18 or 19 if the child is a full-time student attending an elementary or secondary school. Benefits will only be payable so long as the wage earner, e.g., parent, continues to be eligible for their payment. There is no Medicare eligibility associated with CIB. Social Security Administration (SSA), Benefits for Children (June 2021), https://www.ssa.gov/pubs/EN-05-10085.pdf.
Eligibility for Childhood Disability Benefits at Age 18 or Older
Establishing Eligibility for CDB
Social Security Childhood Disability Benefits, in the past referred to as Disabled Adult Child (DAC) benefits, are available to unmarried youth with disabilities as early as age 18. Like CIB, these benefits are most often paid on the earnings record of a parent who is now disabled, retired, or deceased. A CDB application can be filed with SSA any time within six months before the child turns age 18. SSA Program Operations Manual System (POMS) RS 00203.080 B, https://secure.ssa.gov/apps10/poms.nsf/lnx/0300203080.
Disability onset before age 22. CDB disability criteria are the same as for adults seeking SSDI as a wage earner. For information on how disability is determined, see Disability, SSA Pub. No. 05-10029 (August 2018), https://www.ssa.gov/pubs/EN-05-10029.pdf. CDB policy requires that the onset of disability must have occurred before age 22. While our focus is on youth up to age 25, many CDB beneficiaries first become eligible in their 30s, 40s, or later when their parents qualify for Social Security Retirement benefits. These older applicants must be able to show that their disability began before age 22.
Retroactive payments. Children should apply for CDB before age 18 if they appear to meet the eligibility criteria. If they apply after 18, the right to retroactive benefits will differ depending on the parent’s status:
A CDB-D case. If the application is on the record of a parent who is disabled and receiving SSDI payments, the retroactive period can be for up to 12 months before the month of application.
A CDB-R case. If the application is on the record of a parent who is receiving Social Security Retirement benefits or who is deceased, the retroactive period can be for up to six months before the month of application.
Keep in mind that these retroactivity rules apply in all CDB initial eligibility cases, including those involving much older adult children. POMS GN 00204.030 E, https://secure.ssa.gov/apps10/poms.nsf/lnx/0200204030#g.
No five-month waiting period. The SSDI benefit for wage earners imposes a five-month waiting period if an application is approved. This means that an SSDI application approved with an initial eligibility date of January 2021 would not create eligibility for a payment until the period starting in June 2021. The five-month waiting period does not apply to CDB benefits. A CDB application approved with an eligibility date of January 2021 would create eligibility for a payment as of that month. POMS DI 10115.001 A., https://secure.ssa.gov/apps10/poms.nsf/lnx/0410115001.
Medicare after 24 months of CDB eligibility. Like SSDI for wage earners, the CDB beneficiary will be eligible for Medicare after 24 months of entitlement to a CDB payment. Given that entitlement to payments often goes back to a month that predates the final approval of the application, the wait time for Medicare can be much shorter by the time of the final approval.
After the 24-month waiting period, the CDB beneficiary will be automatically eligible for cost-free Medicare Part A (Hospital Insurance) and will have the option of enrolling in Part B (Supplemental Medical Insurance) and Part D (the Prescription Drug Benefit).
The optional Part B and Part D benefits each come with monthly premiums and other potential out-of-pocket expenses, with the possibility of special programs to help with these expenses (i.e., Medicare Savings Programs for Part B and the Extra Help program for Part D). Medicare Part C, the Medicare Advantage Plan, is the managed care option delivered through private insurance companies. These plans exist in most parts of the country. Medicare Advantage Plans will often, for an increased premium, provide services that go beyond what is available through traditional Medicare. Further details on Medicare are beyond the scope of this article.
No income or resources test. CDB is not means-tested, and the payment amount is never reduced based on an individual's earned income. A beneficiary with earnings will either be entitled to their entire benefit or no benefit at all if earning at the substantial gainful activity level after their nine-month trial work period and three-month grace period. Most unearned income will not result in a reduced CDB payment. However, worker's compensation benefits and some types of disability payments from a federal, state, or local government, for medical conditions that are not job-related, can result in a reduced payment. See How Workers’ Compensation and Other Disability Payments May Affect Your Benefits, Social Security Publication No. 05-10018 (July 2017), https://www.ssa.gov/pubs/EN-05-10018.pdf. Unlike SSI, which limits non-exempt countable resources to $2,000, the CDB program has no resource limit.
Choosing to retain CIB, or to apply for CDB when 18 and still in school. As noted above CIB eligibility continues up to age 19, if the beneficiary is a full-time elementary or secondary student. However, if that person has a disability there are several benefits to getting approved for CDB at age 18:
Spouse's, mother's or father's benefits may be payable if the “in care” requirements are met (i.e., caring for the CDB beneficiary with a disability).
Follow-ups to establish continued student status are unnecessary.
It will avoid the automatic termination of CIB at age 19, even if still a student.
The beneficiary is entitled to Medicare after 24 months of entitlement to CDB.
See POMS RS 00203.090, https://secure.ssa.gov/apps10/poms.nsf/lnx/0300203090 (if a child could be eligible for either CIB or CDB, SSA staff are instructed to process for eligibility as CDB). As noted above, the CIB beneficiary should be encouraged to apply for CDB within six months of age 18, allowing their application processing to begin before they turn 18.
The CDB Monthly Payment Amount: Multiple Dependent Beneficiaries and the Concept of Family Maximum
Two or more children can qualify for CIB payments against the Social Security record of a parent, if that parent is disabled or retired and getting Social Security on that basis, or if the parent is deceased. Similarly, two or more adult children can qualify for CDB payments on the same earnings record. Finally, a combination of CIB and CDB beneficiaries may receive benefits on the same parental earnings record.
When two or more qualify for a form of dependent’s benefits on the same Social Security record, the pool of money known as the “Family Maximum” is split between or among the beneficiaries. The Family Maximum will generally be one-half of the parent’s Primary Insurance Amount (PIA) (before deductions for Medicare Part B premiums or other deductions) for a parent who is getting disability or retirement benefits, and three quarters of the parent’s PIA when that parent is deceased. If one of two or more dependent beneficiaries ceases to be eligible, the remaining beneficiary or beneficiaries will usually qualify for a larger share of the Family Maximum. An example of this appears in Part IV.E, below. NOTE: If a parent’s PIA is too low, their dependents might not be eligible for CIB or CDB.
Readers should understand that, in any individual case, the determination of Family Maximum and CIB or CDB payment amounts can be extremely complicated. See, e.g., Understanding the Social Security Family Maximum, Social Security Bulletin, Vol. 75, No. 3 (2015), https://www.ssa.gov/policy/docs/ssb/v75n3/v75n3p1.html. Despite this complexity, benefits counselors should find it helpful to understand the basic principles involved as explained in this article, so they can present thoughtful questions to SSA staff in individual cases.
Marriage May Result in Termination of CDB.
Marriage will result in a termination of CDB unless the marriage is to a Social Security beneficiary other than: a CIB beneficiary under 18; or a CIB between ages 18 and 19, entitled to benefits as a full-time elementary of secondary student. A person entitled to SSI is not considered a Social Security beneficiary in this context and marriage to an SSI recipient will result in termination of the CDB. POMS RS 00203.035 A, https://secure.ssa.gov/apps10/poms.nsf/lnx/0300203035. NOTE: If the marriage is dissolved through divorce, annulment, or death, or is void, then the marriage ceases to be a bar to initial eligibility. POMS RS 00203.020 A, https://secure.ssa.gov/apps10/poms.nsf/lnx/0300203020.
Getting Both CDB and SSI Benefits
It is common for adults with disabilities to be dually eligible for CDB and SSI. If the countable CDB payment (CDB amount less a $20 exclusion) is less than your state's maximum SSI rate, the person should be eligible for an SSI supplement if their countable resources are no more than $2,000. For example, let’s assume Devi lives in a State that pays the 2022 SSI federal benefit rate of $841 with no state supplement. If Devi receives a monthly CDB payment of $620, $600 will be countable income ($620 – 20) and Devi will get an SSI supplement of $241 per month ($841 – 600). Devi’s total benefit will be $861 (CDB of $620 and SSI of $241) due to the $20 unearned income exclusion applied in the SSI budgeting formula.
SSI means automatic Medicaid in most states. In 41 states and the District of Columbia, a person who receives any amount of SSI will become automatically eligible for SSI, although eight of those states will still require that a separate Medicaid application be filed. In the other nine states, known as 209(b) states, separate Medicaid eligibility criteria will apply and their application with be processed by their State or local Medicaid agency. See POMS SI 01715.010, https://secure.ssa.gov/poms.nsf/lnx/0501715010 (listing the 209(b) states).
The Case of Coby: Transition from CIB to CDB and SSI
Coby and Sister Qualify for CIB Payments.When Coby was 16 and his sister was 13 their father died, and each became eligible for $520 per month in CIB payments. Although Coby has a disability – cerebral palsy, with the need for a wheeled walker or manual wheelchair for all mobility outside the home – disability is not relevant to CIB eligibility. Also, because Coby’s mother works full time and earns $70,000 per year, her earnings combined with Coby’s CIB payment make Coby ineligible for SSI.
Coby is Eligible for CDB and SSI at Age 18.Since Coby will likely meet the adult disability criteria at age 18, the mother files a CDB application for him six months before he turns 18. The application is approved and Coby, upon turning 18, begins receiving $520 per month in CDB payments, the same as the CIB payment rate. Coby’s sister, now 15, continues getting CIB of $520 per month.
The SSI program considers Coby to be an adult at age 18. This means that the income and resources of Coby’s mother will no longer be deemed to Coby by the SSI program. He will now be eligible for a $341 SSI payment to supplement the CDB, based on $500 of countable CDB after a $20 general income exclusion. We will assume that Coby’s countable resources are no more than the $2,000 SSI limit.
NOTE: To minimize complexity, we will use the same CDB and SSDI payment amounts and the 2022 SSI federal benefit level of $841 per month for all case scenarios throughout this article. Those payments would usually be subject to annual cost-of-living adjustments.
Coby’s Medicaid and Medicare eligibility. Coby resides in one of 41 states in which receipt of an SSI payment means automatic eligibility for Medicaid (with a separate Medicaid application required in some states). After a 24-month waiting period, Coby will become eligible for Medicare at age 20.
SSDI Eligibility for Wage Earner in Late Teens or Early 20s
How a Youth Earns Social Security “Credits”
A youth who works and pays into the Social Security trust fund through payroll deductions, may eventually earn enough "credits" to qualify for SSDI on their own record so long as they also meet the disability criteria. They can earn up to four credits (sometimes referred to as “quarters of coverage”) in a calendar year.
In 2022 gross earnings of $1,510 earns one credit whether earned in a short period or over several months. A youth with full-time employment may be able to earn a maximum of four credits for a calendar year after working for a few months. Even youth who work part-time while in high school could earn enough to get at least one or two credits during a calendar year, so long as Social Security taxes are taken out of their paycheck. Once they have $6,040 in gross earnings during 2022, they receive the maximum of four credits for the year. The amount needed to earn one credit is adjusted each year. See How You Earn Credits, Publication No. 05-10072 (January 2018), https://www.ssa.gov/pubs/EN-05-10072.pdf (includes a discussion of credits needed, at various ages, to qualify for SSDI); and Quarters of Coverage (2019 update), https://www.ssa.gov/oact/COLA/QC.html (includes a table showing the amount of earnings, by year, needed to earn one credit or a quarter of coverage).
If Age 31 or Older, 20 Credits are Needed During the Last 10 Years to Establish “Insured Status.”
When age 31 or older, 20 credits are required during the most recent 10-year period. For example, an individual seeking to establish disability at age 33 would need 20 credits between ages 23 and 33 to establish insured status. Those credits could be spread out in any number of ways so long as the individual acquires 20 credits during the 10 years prior to the onset of disability.
Special Insured Status Rules Apply to Those Age 31 or Younger.
Transition-aged youth will be subject to these less onerous rules, POMS RS 00301.140, https://secure.ssa.gov/poms.nsf/lnx/0300301140:
Before age 21. A person will qualify with a minimum of six credits in the 12-quarter period ending with the quarter of the onset of disability.
Before age 24. A person will qualify with at least six credits earned in the three-year period ending with the quarter of the onset of their disability.
Consider Olga, age 22 who applies for SSDI, alleging disability onset as of the month she turned age 22. She has worked various part-time jobs during the past three years. During that three-year period, between ages 19 and 22 (and ending in the quarter she turned 22), she earned a minimum of six credits to establish insured status (as a person under age 24) and qualify for an SSDI payment of $480 per month on her own earnings record.
Ages 24 to 31. A person will qualify with credits equal to half the quarters between age 21 and the quarter in which they become disabled. For example, an individual who becomes disabled in the quarter they turn age 25 needs eight credits between ages 21 and 25. The needed credits could be spread out over the full four-year period or could all occur within a much shorter period.
NOTE: In many cases, disability onset may have occurred before the person started working or shortly after they started working. In those cases, the person will need to earn enough credits to establish insured status before they can establish SSDI eligibility as a wage earner.
Can be Dually Entitled to Both SSDI as Wage Earner and CDB
It is possible to be dually or concurrently eligible for CDB on a parent’s Social Security record and eligible for SSDI on your own earnings record:
Back to Olga’s case. At age 22 she became eligible for SSDI as a wage earner. Then, two years later at age 24 her mother begins getting Social Security Retirement payments, and Olga establishes eligibility for CDB on the mother’s Social Security record.
SSA will always pay the higher of the SSDI amount or the CDB amount. If SSDI as a wage earner is the higher amount that is all that is paid. If the CDB is the higher amount, then SSA will first pay SSDI on the individual’s record and make a CDB payment to bring the total up to what the CDB would be if that was the only benefit.
Back to Olga. She has been receiving a monthly SSDI payment of $480 and is then found eligible for CDB benefits of $800 per month. SSA will make two payments to Olga: first they will pay her SSDI of $480 per month. Then it will provide her a CDB payment of $320 per month to bring the total up to $800 per month.
Two sets of work incentives. All SSDI and CDB beneficiaries are eligible for the same work incentives, regardless of the type of benefits they receive. But work incentives will be applied independently to each benefit based on when they became eligible for each benefit and when their work started.
Olga’s two separate trial work periods (TWPs). She became eligible for SSDI as a wage earner at age 22 and separately eligible for CDB at age 24. Assume Olga started working at age 23, earning enough to start using TWP months ($970 or more in gross earnings during 2022). In the month Olga becomes entitled to CDB she has already used six TWP months and continues to work at or above the earnings level to continue using TWP months.
In this case, Olga will have separate TWPs for SSDI and CDB. The SSDI TWP began when she started work at age 23 and the CDB TWP began only after she became eligible for CDB payments. It is likely, then, that Olga will finish her nine-month TWP for SSDI while she is in the early months of her TWP for CDB purposes. This means that Olga’s right to additional work incentives – e.g., benefit cessation and grace period, Extended Period of Eligibility, and Extended Period of Medicare Coverage – will also run at separate times for each benefit.
NOTE: If Olga had not started working until age 26, when she was already eligible for SSDI and CDB, she would be eligible to two separate sets of work incentives, but they would run simultaneously.
See Work Incentives Counseling for Dually Entitled Beneficiaries, VCU – WIPA National Training and Data Center, https://vcu-ntdc.org/resources/WIPA_OtherResources/WorkIncCounselDualEntBene2021.pdf (January 2021), for a more comprehensive discussion of these issues.
SSDI for wage earner continues if CDB terminated due to marriage. The critical principal here is that each benefit will continue, be suspended, or terminated based on the rules governing that benefit.
Olga’s marriage. At age 26 she gets married. Her spouse does not receive any type of Social Security benefit. This marriage will result in a termination of Olga’s right to receive CDB payments. However, her SSDI payments of $480 per month will continue along with her Medicare eligibility. It is possible that she will once again be entitled to SSI, depending on her other income and resources, including income and resources deemed to her from her spouse.
Coby’s Sister Loses Right to CIB at Age 18 After High School Graduation
Sister’s Loss of CIB at Age 18. Coby’s sister turns 18 in April of her senior year and graduates from high school in June. This means her CIB benefits will terminate upon graduation as she is no longer a full-time high school student. Unlike Coby, she will not transition to CDB benefits because she does not have a disability.
Coby’s CDB will Increase, and SSI will Terminate. When the sister loses her right to CIB, Coby will now get an increase as his sister is no longer getting half of the available benefits for dependents. This means that Coby’s benefits will increase from $520 to $1,040 per month. With $1,020 of countable monthly income, after a $20 income exclusion, Coby will no longer be eligible for SSI (based on 2022 SSI federal benefit rate of $841, with no State supplement).
Coby’s Right to Automatic Medicaid Continues Despite Loss of SSI. Ordinarily, when SSI is terminated as a result of excess unearned income, the right to automatic Medicaid (in all but the nine 209(b) states) terminates as well. An exception allows Medicaid to continue when the former SSI beneficiary loses SSI as a result of eligibility for CDB or an increase in the CDB payment. In this situation federal law and policy require state Medicaid programs to continue to treat CDB beneficiaries as SSI recipients “so long as they would have remained otherwise eligible for SSI benefits but for their entitlement to (or increase in) [CDB] benefits.” In the 41 states where SSI recipients qualify for automatic Medicaid, Medicaid should continue so long as the person would be eligible for SSI if the CDB payment or increase is ignored. In the nine 209(b) states, the person must be treated as an SSI recipient and must meet any other State Medicaid rules. POMS SI 01715.015 B.4, https://secure.ssa.gov/apps10/poms.nsf/lnx/0501715015; POMS NL 00804.110, https://secure.ssa.gov/apps10/poms.nsf/lnx/0900804110.
When we apply this special provision to Coby, his state or local Medicaid agency will be required to treat him as an SSI recipient, for Medicaid purposes, so long as he would be eligible for continued SSI in the absence of the CDB increase that Coby received. In this case example, Coby does not have other, non-CDB unearned income that would make him ineligible for SSI if the CDB increase is ignored. We will assume that countable resources remain within SSI’s $2,000 limit and Coby will need to keep resources within those limits. See NY Administrative Directive, 95 ADM-11 (July 21, 1995), https://www.health.ny.gov/health_care/medicaid/publications/docs/olderadm/95_adm-11.pdf, for an example of how New York has implemented this provision, through settlement of a lawsuit brought by these two authors.
Conclusion
Benefits counselors must bear in mind that the transition from youth to adult for beneficiaries can be a very important time for parents and young adults with respect to benefits counseling. This article provides benefits counselors with a foundation for understanding the various Social Security benefits, as they apply to youths with disabilities up to age 25. We have focused on the many facets of Social Security Disability eligibility, for both benefits collected against the earnings records of a parent or other family member (Childhood Disability Benefits) and benefits collected against the youth’s own earnings record (SSDI as a wage earner). Using the tools highlighted in this article, benefits counselors must be ready to explain the options to parents of children with disabilities so the youth in transition applies and receives all the benefits to which they are entitled on a timely basis.
Date of Article: May12, 2022
Authors: James R. Sheldon, JD (Board Member), Disability Consultant and Edwin J. Lopez-Soto, JD (NABWIS member), Extension Faculty, Cornell’s Yan Tan Institute (YTI)
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