Military families with special needs children know it takes an extra measure of love and support to meet their needs. Fortunately, the government offers several programs and has recently made some important legislative changes that help military families support children with special needs throughout their lives.
Most recently, Congress changed the rules for the Survivor Benefit Plan (SBP). Military retirees who elect and pay into SBP can designate their surviving spouse and children to receive an annuity of up to 55 percent of their retirement pay. Previously, retirees could designate that annuity for an adult child with a disability, but that income could disqualify that child for some federal and state benefits. Thanks to recent changes, military retirees can now direct payment of an SBP annuity for a dependent child to a Special Needs Trust (SNT).
An SNT is a legal instrument specifically designed for the benefit of a person with a disability. It provides a way for income to support the disabled beneficiary’s special needs, while potentially preserving the beneficiary’s eligibility for other federal or state benefits.
The law and DoD implementation instructions provide for different options, depending upon the military member’s status. Current servicemembers can designate their SBP election to a SNT upon retirement. Retirees who have already designated child coverage for SBP can change the payment so that it goes directly into an SNT. After a retiree dies, the surviving parent or guardian can change the designation to an SNT on behalf of the beneficiary.
Beyond the recent changes to the law, there are other important steps that the military parent of a special needs child should consider. Designating a child over the age of 18 as an Incapacitated Dependent, for example, allows the dependent to keep the benefits that would otherwise expire after the age of 18. These include military post privileges and, in many cases, TRICARE benefits. Additionally, Veterans with VA disability rating over 30 percent who continue to care for their disabled adult children should ensure that the government officially considers these dependents part of their household for purposes of their VA benefit award.
Although these issues are complicated and the paperwork can be challenging, ensuring your children receive all the support they deserve will give you the peace of mind to breathe easy.
For more information, visit this AAFMAA brief on Special Needs Trusts: https://www.aafmaa.com/Newsroom/INTELCenter/tabid/108/EntryId/168/Planning-for-Special-Needs-Beneficiaries-with-a-Special-Needs-Trust.aspx.
If you have additional questions on benefits in general, email MemberBenefits@aafmaa.com. To discuss Special Needs Trusts in particular email WealthManagement@aafmaa.com.