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Social Security Childhood Disability Benefits (formerly called Disabled Adult Child Benefits) provide monthly income to disabled adult children of parents who 1) have sufficient work record and 2) retired, became disabled, or died. The monthly Childhood Disability Benefit is meaningful: 50% of a parent’s full retirement or disability benefits, and up to 75% of the parent’s basic Social Security benefit upon the parent’s death.
Many of our clients either receive Childhood Disability Benefits themselves or have disabled children who do or someday will. The catch is, to receive Medicaid after receiving Childhood Disability Benefits, one must first receive Supplemental Security Income (“SSI”).
This trap for the unwary arises under Section 1634 of the Social Security Act (42 U.S.C. § 1383c(c)), which currently provides an individual must receive SSI before receiving Childhood Disability Benefits before the Childhood Disability Benefit income is disregarded for Medicaid qualification.
This creates an unintended trap of making disabled persons whose parents die young, are older and retire, or who fail to apply in time, ineligible for Medicaid.
The Special Needs Alliance has crafted proposed legislation and is advocating to address that significant problem. The proposed bill closes the trap and grants equal access to Medicaid among disabled adult children receiving Childhood Disability Benefits regardless of whether the individual first received SSI.
A Primer on the Benefits and the Problem
SSI
SSI is means-tested. It is a monthly income stipend for individuals who are unable to work due to a Social Security-determined disability. In 2025, individuals can receive up to $967 per month in SSI benefits to cover their food and shelter expenses. Individuals who qualify for SSI automatically receive Medicaid. Most children with disabilities do not qualify for SSI when they are under the age of 18 because their parents’ assets and income are “deemed” to them. However, once the disabled individual attains the age of 18, the parents’ income and assets are no longer counted, and the individual can become eligible for SSI and Medicaid. In the State of Delaware, SSI recipients are automatically eligible for Medicaid.
Childhood Disability Benefit for Individuals Disabled Before Age 22
In addition to SSI and the automatic Medicaid that comes with it in the State of Delaware, the child may be eligible for Childhood Disability Benefit. The amount of Childhood Disability Benefit is linked to his or her parents’ Social Security earnings. The Childhood Disability Benefit is an insured benefit under Title II of the Social Security Act. It is one of three types of benefits collectively known as Social Security Disability Insurance benefits. An individual who becomes disabled prior to age 22 and continues to be disabled can receive the Childhood Disability Benefit when his or her parent retires or becomes disabled, or upon a parent’s death. The child can receive up to 50% of the parent’s full retirement or disability benefits and up to 75% of the parent’s basic Social Security benefit upon the parent’s death. In addition, after two years of receiving Childhood Disability Benefits, a disabled adult child can receive Medicare.
Loss of SSI …
Once a disabled adult child begins receiving the Childhood Disability Benefit, they typically lose SSI benefits because the income from the Childhood Disability Benefit exceeds the SSI benefit.
… But Not Loss of Medicaid
Section 1634 of the Social Security Act gives an important protection for disabled adult children on the theory that disabled adult children (who by definition of being “disabled” by the Social Security Administration are significantly limited in ability to work): it provides that an individual who receives SSI before receiving Childhood Disability Benefits can have his or her Childhood Disability Benefit income disregarded for Medicaid qualification.
This allows the disabled adult child to receive the higher Childhood Disability Benefit, Medicare for primary health insurance, and Medicaid as secondary health insurance to cover those services not covered by Medicare and supported living community services.
The Problem
While well-intended, the SSI-first requirement as drafted creates an unintended trap for disabled individuals who do not apply for SSI before receiving Childhood Disability Benefits. How might this happen?
One way this happens is what the Special Needs Alliance is when a child’s parent retires, becomes disabled, or dies, before the child turns 18. In these comparatively rare instances, the child never gets the chance to apply for SSI: before she turns 18, her parents’ income and assets are too high; but once she is 18, at which time normally she would be eligible for SSI because her parents’ income and assets are no longer deemed to her, she is disqualified from applying for SSI because she is already receiving Childhood Disability Benefits.
Another way this happens is when a disabled adult child simply does not apply for SSI when he otherwise could. Perhaps he lives with his parents who provide for him all his life. Then his parents retire or die. At that point he applies for and starts receiving the Childhood Disability Benefit, not realizing he should first apply for SSI in order to get and keep the Medicaid that comes with SSI. I sometimes call this the “leapfrog” lily pad concept. A person should first land on the SSI lily pad, get the SSI and automatic Medicaid, then leap to the Childhood Disability Benefit lily pad.
Special Needs Alliance’s Proposed Amendment
The Special Needs Alliance is requesting an amendment to 42 U.S.C. § 1383c to allow all disabled adult children to have their Childhood Disability Benefit income disregarded for purposes of Medicaid eligibility regardless of whether they were receiving SSI prior to receiving Childhood Disability Benefit, so long as they would have been eligible for SSI, but for the Childhood Disability Benefit income.
Source: https://www.specialneedsalliance.org/blog/childhood-disability-benefit-fairness-act/
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