Financial Planning For People With Disabilities

Note: This post is pretty specific to the United States, because that’s the area where I have the most experience, although some of what I say here may hold true for other areas of the world. I would LOVE for readers in other regions of the world to talk about financial planning issues for people with disabilities in the comments here, and I’d be very interested in comparing and contrasting the way in which financial planning is handled for/by people with disabilities around the world.

I am not a planner. I am sometimes accused of being the anti-planner, especially when it comes to finances, and have operated for years under the “oh, there’s money in my bank account? That’s because I haven’t spent it yet” school of financial planning. However, it’s been brought to my attention on numerous occasions that financial planning needs to start early, and if you “only” save some pittance (which seems very large to me) every year you’ll be set up for life when you want to retire.

Which brings me to a whole lot of assumptions about financial planning when you’re a person with disabilities, because things get a lot more complicated. People with disabilities are at increased risk of being poor, and of being financially abused by family members and caregivers. We are among the most vulnerable in the population, and probably most in need of financial planning, because one of the most serious expenses people can face is medical expenses.

Yet, we’re put in a position here in the United States where financial planning is actively discouraged.

First of all, try meeting with a financial planner to explain that you are a person with disabilities making plans for yourself. Most financial planning conversations literally surround people with disabilities. The assumption is that you are a parent or family member making plans for someone else. The idea of financial autonomy for a disabled person is actually treated as almost laughable. Are people with disabilities not allowed to be worried about our financial future? Are we presumed to be incompetent because of our disabilities? Is it assumed that any finances available to a person with disabilities come from someone else anyway, so why should the person ostensibly being planned for have control over them?

Once you’ve managed to convince a financial planner that you really do want to make plans for yourself, you are going to run up against the fact that if you are disabled, the government believes that you should be in a state of poverty. If you make any money at all, your share of cost when it comes to government benefits is going to increase. Thus, there’s functionally no difference between making some money every month and making no money every month, because when you make any money, it will be taken. The idea of saving, of making plans for the future, is simply ludicrous.

The only way to set up any sort of long-term financial planning, if you are a person with disabilities in the United States, is to establish a trust. A trust which is controlled by someone else. A trust which holds all your assets, except that they aren’t yours anymore, because they belong to the trust. And the trust has to be carefully structured to avoid running afoul of government regulations.

It is incredibly humiliating to be told that the only way you can plan for the future is to surrender all assets to someone else so that this person can act as a trustee. And, all this while, you must hope that the trustee will not abuse the trust, will administer it responsibly, won’t accidentally disburse too much and get you knocked out of government benefits plans.

If you inherit money, you will be deemed ineligible for government benefits until the money’s all gone. If you get a job, ineligible for government benefits. Almost any assets which come into your hands will be taken away; you are “allowed” to have $2,0001. That’s it.

This is not acceptable. People with disabilities want to plan for the future just like everyone else. Some of us would like to try and set aside funds for our children to use to go to college. Some of us would like to be able to buy houses. Some of us would like to know that we have a safety cushion of funds in case something happens; in case we need to leave marriages, find a new house in a hurry, pay for something the government won’t fund, repair the car. Some of us like to do really frivolous things like eating.

For me, there’s an active disincentive to plan. It’s in my best interests to not set funds aside, to not care for my finances wisely. For many people with disabilities, working (if you can and want to) is not in your best interests. People wonder why we don’t “contribute more to society”? It’s because we are barred from it by policy; we can’t work or produce creative works which are purchased by others or we risk losing access to the benefits we need to survive. Paul Longmore wrote about this in his excellent essay “Why I Burned My Book,” and it’s something which really needs to be addressed. We are treated like second class citizens in so many areas, but not being allowed to engage in financial planning is especially problematic and dangerous.

Acting like government benefits are enough is disingenuous. Telling us that we can’t be fully active in society if we want to retain those benefits is discriminatory. And pretending that disabled persons have no interest in their future is just plain hateful.

  1. Yeah, on its own, $2,000 is not a paltry sum. But what if you need to move and you need money to pay first, last, and deposit? What if you have to go to the hospital? What if your car needs a new engine? What if…?

10 Comments

  1. It starts really early. My brother is lucky that my parents started planning for him at an early age. Others aren’t so lucky. But the surrounding starts early, I’m involved right now in a study involving the siblings of autistic individuals and the information the interviewer gave me was so disheartening — parents literally being told to have another child to take care of their brother or sister, without a thought that an autistic person can provide for themselves. It’s unfair to both parties.

  2. In setting up the Registered Disability Savings Plan for Don in December, a lot of these issues were staring us right in the face. The RDSP, in its execution, is designed for parents with minor-aged children who have “severe” disabilities, and the easiest way to take advantage of it is to be an able-bodied middle class adult.

    For example, I went with Don to open the account, but he did all of the setting up. I was there when he was assured that we could transfer funds from our primary bank account into this RDSP through telephone banking. Telephone banking struck both of us as ideal, because it should be something that can be done after hours, and probably can be done through just a touch-tone phone. {Don, as many people now know, can’t talk above a whisper, and is difficult to hear on the phone.}

    That… turned out to be incorrect at our bank. Ultimately it required Don himself to go back into the bank – which, while accessible to wheelchair users, is not easy for him to get to using his wheelchair – and deal with a financial planner again, as well every subsequent deposit. While this may not be true at other banks, it is true at ours. I even called the head office of our bank to confirm the policy and to make a formal complaint about it, because I see no reason why Don – a full-time wheelchair user going through freaking cancer treatments – needs to be physically in the bank to transfer funds from one account he is primary account holder on to another account he is the only account holder on.

    *sigh*

  3. There’s 3 of us (autistic children of my parents), we’re going to have to take care of each other.

    I can’t really do my own finances, but I refuse to give control to anyone else, in any form. I have my partner and occasionally one of my parents keep an eye on my finances and other assorted things that are related or like it. Even so it often feels embarrassing to have someone else look through all my recent expenses etc, like I have to feel guilty or justify what I spend my money on. Then again, I do miscalculate a lot and can’t keep an oversight with anything related to numbers, and I have been in deep trouble before, which is why I asked them to in the first place.

    I think with the right help, I might be able to hold down a job (maybe even a job I like), however, I doubt I’d be able to make enough hours to make enough money to even come close, per month, to what I receive now in disability income (which, I understand, is very generous compared to many other countries, but still barely enough, certainly not enough for me to save any money at all, let alone save specifically for old age, and it’s really only enough because I can split stuff like rent with a partner). There is a list of things I need, that I don’t have the money to pay for (like glasses, for one).

    Technically, if I make money and it’s less than disability income, they pay me the difference, but in practice it doesn’t necessarily work that way. Last time I tried, I was making less money in total than when I wasn’t working. I was also heading for a major breakdown because of the work. Even for good pay it wouldn’t have been worth it, but the pay was awful.

    They say they want to help disabled people find jobs, but so far anything they did for me just showed how I was better off on disability income; at least I can pay rent and eat on it, while not being in a state of complete overload and extreme stress to boot.

    I don’t really know about financial planners, maybe we have those, never really heard of them.

  4. I now feel so privileged really, because I don’t have any financial problems. One of the main reasons is that I don’t spend a lot of money. In fact, I have been criticized by my parents and my former social worker for being scrouge for the simple reason that I have relatively much money in my savings account, and I sometiems get rather annoyed at it. You know, when people see my bank review in January, they sometiems go like “OMG don’t save so much, you may need to pay interest tax!” (I don’t) in a really snobby tone. Thank goodness my parents no longer see my bank reviews and my current social worker is all for financial planning so she doesn’t criticize me over how much I save.

    On the other hand, I can see somewhat how the people who criticize me ove rmy financial situation, get there, because financial issues do stress me out. It is usually interpreted as that I am worrying for nothing because I have it so good, when in reality it is not that I worry that much about not being able to get by financially, but about all the administrative stuff involved with financial management. I refuse to give control to someone else though, firstly because I want to remain financially independent, and secondly because I have seen the problems budget management creates for people who use it (having to ask for extra moeny to buy incidentals a while in advance even if you know you have it, lots of paperwork involved with the setting up of the management, etc.).

    However, I do have to say I don’t do any conscious financial planning. I think in fact I could learn some, because even though I have it good now, there is no guarantee that will remain this way.

    Oh, this comment is not meant to trivialize any problems faced by people who are actually in more financial hardship than I am. In fact, I often realize how lucky I am that I actually at this point don’t have to watch my finances that much and can live as comfortably as I want to (at least financially speaking).

  5. There’s no such thing as a pittance to save when your entire disability check covers the cost of your rent every month, and you are pay your utilities, buy your food, and pay for medical treatment with the $0 you have left over.

    When what you have to plan is “which bill is safest to go delinquent on this month” — every single month, for perpetuity — you might not exactly feel like spending your time on “planning.”

  6. amandaw, you remind me how very privileged I am to be able to do things like mooch off my parents and use my student loans to live on campus.

    On the topic of the post I really hate not being able to save money. I could set up a trust, but my parents would need to run it and I’m just not willing to hand over that control.

  7. @amandaw – Yeah, that’s about it. Don’t foresee this changing much, ever.

  8. oh, FTR, that is not my financial situation right now, luckily.

    It was before I moved across the country and got married to a nondisabled man. Even then, we struggled hard for our first year — even the job he could get with his bachelor’s degree was low-pay and we were having trouble staying afloat. I was working 5-6 hours a week (and when it was six instead of five, I suffered the consequences as though that extra hour were an able-bodied person’s twenty) at just above minimum wage (which I got only because I got that job through a connection with my husband). Even after I finally became eligible for Medicare and didn’t have to pay for all my medicine out of pocket anymore.

    Then, he got a job with the state, and our situation improved drastically with only a small increase in pay.

    I’m ok now. Because I am lucky enough to have a partner. A long-term partner who is willing to support me. A nondisabled partner who is able to work a full-time job and do the vast majority of the housework on top of that. A partner of the opposite sex, where we share the heterosexual privilege to be able to legally marry and to have our relationship approved-of by the people around us. A partner who was raised with class privilege who has the knowledge and connections contained therein.

    So now, financial planning applies to us! We can decide where to “invest” our money (would we rather maintain a savings account or pay down debt? the debt has the higher interest rate, but the savings would be actual cash on hand, not just credit that might not be there when we need it). That’s an incredible privilege, to be making that decision, rather than deciding which debt we can most safely miss a payment on, or which account to take out more debt in order to pay off another debt.

    And people seriously think that anyone would fake disability to get that disability check. Because it’s such an easy life, living on that tiny little check.

  9. This is a really good post. My family’s financial situation has always been–turbulent. And they’ve never been able to save.

    Unfortunately, I seem to have a tendency to poor financial management myself. I’m not sure whether it’s disability-related, but I have an extremely hard time budgeting effectively when left to my own devices. I mean, not that I have any money to budget, but…

    In future I’d like to set up something that helps me save money, once I have a job. In practice, I am extremely uncertain I’d be able to get a job that pays enough to allow me to do so.

    Uh…I’m not really going anywhere with this comment. But thank you for this post.

  10. “If you inherit money, you will be deemed ineligible for government benefits until the money’s all gone. If you get a job, ineligible for government benefits. Almost any assets which come into your hands will be taken away; you are “allowed” to have $2,0001. That’s it.”

    Sometimes, I let myself dream of coming into a large sum of money and how nice that would be. Then I realize it would have to be large enough to cover all of my expenses ever for the rest of my life or it would be no good to me because I would lose my benefits and have extreme difficulty getting them back when the money ran out. It’s a strange strange life in which you have to worry about coming into a large sum of money!!