Financial Resources for Parents of Children with Special Needs

Financial Resources for Parents of Children with Special Needs

Supporting children with special needs typically goes far beyond age 18 and often is a lifelong commitment. Children with special needs may also have more financial needs than other children, especially if they have complex medical problems or require a high level of supervision and care. While current systems are imperfect and without private subsidy may be inadequate for many families with children with special needs, the government programs and other financial resources available for these families are often essential.

Illinois PUNS List

Getting services for your child with special needs can be challenging. In Illinois, if your child has developmental disabilities, you should enroll your child on the “Prioritization for Urgency of Services” or PUNS list as early as possible, even if your child doesn’t currently need services. Waiting lists for services are extremely long, and funding for these services varies from year to year and even from month to month. By placing your child’s name on the list, you will have a better chance of getting your child services, which may include adaptive care, group homes and residential living arrangements, in-home supports, respite care, and job coaches.

Social Security Benefits

Children with special needs, whether minors or adults, may qualify for Social Security benefits based on disability. These programs vary depending on the situation.

SSI Benefits

These benefits often take the form of Supplemental Security Income (SSI), a means-tested program. Therefore, your child will only be eligible for SSI benefits if your household income falls below certain levels and you meet specific asset limits. However, once the child is over the age of 18, only their personal assets and income count toward eligibility and the parents’ assets and income are irrelevant.  Some assets or resources are exempt from these asset limits as the applicant’s primary residence and one vehicle.

Social Security Disability Insurance

Suppose a child previously worked as an adult and became disabled later in life.  Or they received SSI when they turned 18 but worked part-time and earned six social secutiy quarters before turning 24. In that case, they may have earned sufficient work credits to draw Social Security Disability Insurance (SSDI) benefits. Depending on the number of work credits the child has earned, they also may be able to draw a combination of SSI and SSDI benefits. SSDI benefits are usually greater than the maximum of SSI benefits and are not need-based. Nonetheless, if the child can work and engage in substantial gainful activity for nine months, they will move into a 36-month period of extended disability. After that extended disability period lapses, SSDI benefits will terminate if the child engages in substantial gainful activity in any month.

Childhood Disability Benefits

If a child became disabled before the age of 22 and has a parent who passed away or receives SSDI or Social Security Retirement benefits, the child may qualify for Childhood Disability Benefits (CDB). CDB benefits often are far greater than SSI benefits and are not need-based. However, if the child can work and engage in substantial gainful activity in any month before a parent passes away, retires, or becomes disabled, the child could become permanently ineligible for CDB.


In some cases, Social Security recipients automatically qualify for Medicaid, but that is not true in Illinois. As a result, children with special needs must apply for Medicaid separately. However, like the SSI program, Medicaid has strict income and asset limits that can make this public medical insurance program inaccessible for families with anything but the lowest incomes.  However, just as with SSI, once a child turns 18, their parents’ assets and income generally become irrelevant to qualification for disability based Medicaid.

Housing Assistance

Children with special needs may qualify for various living arrangements and financial assistance with housing, depending on their age, the extent and nature of their special needs, and their income. Available options may include the following:

  • Community Integrated Living Arrangements (CILAs)
  • Supportive Living Programs
  • Community Living Facilities (CLFs)
  • Intermediate Care Facilities for Individuals with Developmental Disabilities (ICF/DD)
  • State Operated Developmental Centers (SODCs)
  • Section 811 Project-Based Rental Assistance Program (PRA)
  • Independent Living with Supportive Services through DHS

ABLE Accounts

ABLE accounts allow children with special needs to save up to $17,000 (as of 2023) without affecting their eligibility for means-tested government assistance programs. These tax-free savings accounts, similar to 529 college savings plans, allow individuals who became disabled before age 26 and have a qualifying disability to save money without unwanted consequences. For instance, in Illinois a divorced parent may be ordered to pay child support to a child with special needs indefinitely; by paying the support to an ABLE account, the support income will not render the child ineligible for income-based government assistance under current SSI and Medicaid rules as they currently apply to individuals with disabilities in this state.

Special Needs Trusts

Special needs trusts are another mechanism to shelter funds for children with special needs. A special needs trust can be self-settled in that the child support funds or personal injury settlement funds are paid directly to and owned by the child. Self-settled special needs trusts must have a Medicaid payback provision that goes into effect as to any funds that remain after the child’s death.

Conversely, a special needs trust can be a third-party trust that a parent establishes. Parents or other family members typically fund these trusts through gifts or inheritances, and the trustee holds and manages the funds on behalf of the child. These trusts are not required to contain a Medicaid payback provision.

Contact Us Today to Learn More About Our Legal Services

Rubin Law is the only Illinois law firm to dedicate itself exclusively to providing compassionate legal services for children and adults with special needs. We offer unique legal and future planning techniques to meet your family’s individual needs.

Call us today at 866-TO-RUBIN or email us at to learn more about the services we can offer you and your family.