Financial Benefits for Disabled People: A Comprehensive Guide

Please Note: These benefits will differ between states and even between counties.

Navigating the complex world of disability benefits, such as SSI and SSDI, can be a daunting task for disabled people. Common hurdles include strict income limits, rigorous disability criteria, not enough work credits, and marital status restrictions.

Luckily, there are often overlooked financial benefits available to disabled people, even if they don't qualify for traditional disability benefits. By understanding and leveraging these opportunities, you can improve your financial situation and potentially reduce your tax burden.

As a DeafBlind woman, I understand firsthand the challenges of navigating the disability benefits system. My husband and I are just over the income limit for me to qualify for disability benefits. Instead, I focus on maximizing the potential of various disability tax breaks and various nonprofit offerings.

These benefits are different government and nonprofit programs designed to provide financial relief to disabled people and their families. These tax benefits can help offset the additional costs often associated with living with a disability, such as medical expenses, assistive technology, and specialized care.

I'll discuss various benefits such as property tax relief, vehicle-related tax benefits, medical and healthcare benefits, and more.

Understanding and taking advantage of disability benefits and breaks is important for several reasons. First, it can significantly reduce your overall tax burden, giving you a much-needed financial relief. Second, it can help you maximize your income potential by offsetting certain expenses. Finally, by claiming these benefits, you're ensuring that you receive the support you deserve.

Understanding How to Qualify for Disability Benefits

Here's a basic rundown between SSI & SSDI, two different government benefits available for disabled people.

What is SSI

Supplemental Security Income (SSI) is a federal program providing monthly benefits to low-income individuals who are aged, blind, or disabled. To qualify, you must be a U.S. citizen or national residing in the U.S. or its territories, have $2,000 or less in countable resources (or $3,000 for a couple), and meet specific disability or age requirements

Note: Specific eligibility and benefit amounts vary by state. While SSI offers financial assistance, the monthly payments are often insufficient to cover basic living costs. For instance, the average monthly SSI payment is around $697.89, and beneficiaries can earn up to $1,971 monthly without impacting their benefits (but subject to adjustments based on marital status and dependents).

What is SSDI

Social Security Disability Insurance (SSDI) provides monthly payments to people with disabilities that prevent them from working. To qualify, you must have a disability, be blind, or have a combination of both, and meet specific work history requirements.

SSDI benefits include monthly payments based on your past earnings and Medicare health coverage. The average monthly payment is $1,542, but individual amounts vary.

You can work while receiving SSDI, but your earnings must remain below the substantial gainful activity (SGA) limit. For non-blind individuals, the SGA limit is $1,470 per month, and for blind individuals, it's $2,460 per month.

To apply for SSI - https://www.ssa.gov/ssi/text-apply-ussi.htm

To apply for SSDI - https://www.ssa.gov/disability/disability.html

The irony of these programs is that the benefits often fall short of meeting basic needs, while disabled people are expected to work, even though their disabilities may prevent them from doing so.

Property & Rental Tax Exemptions

Property tax exemptions and reductions can significantly reduce your tax burden. These programs vary by state and county, but typically include:

• Total or Partial Exemptions: Eliminating or reducing property taxes. For instance, Oklahoma offers homestead exemptions of up to $2,000.
• Reduced Assessments: Lowering property value to reduce taxes. California's Homeowner exemption can reduce your assessed value by $7,000.
• Property Tax Credits: Directly offsetting your tax bill. The "Circuit Breaker Program" provides a 10-50% tax reduction for low-income disabled homeowners.

To learn about specific property tax benefits in your area, contact your local county assessor's office.

For those renting their places, there are a few exemptions or reductions available.

• Section 8 Housing Choice Voucher Program - A federally funded program assists in finding decent, safe, and affordable housing in the private market.
• State & Local Programs - Some states and local governments have specific programs that provide rental assistance or other housing support for people with disabilities. One such program is Massachusetts Rental Assistance for Families with Disabilities (RAFD). This program provides rental assistance to low-income families with a member who has a disability.

Search your state's .Gov website for any that are available in your area.

Vehicle-Related Tax Exemptions

Disabled individuals may need specialized vehicles. Vehicle-related tax exemptions can help reduce costs. Some of these include:

• Vehicle Registration: Many states offer waivers or reductions on registration fees for disabled individuals to help with vehicle maintenance.
• Vehicle Purchases: Some states exempt sales tax on vehicles specifically designed for disabled individuals, making them more affordable.
• Vehicle Modifications: The IRS allows tax deductions for vehicle modifications necessary for disability, such as wheelchair lifts or hand controls.

Some nonprofit groups like Free Charity Cars can help applicants in need obtain reliable transportation.

You can check with your state's Department of Motor Vehicles (DMV) and tax agencies for requirements and forms. This website lists vehicle discounts offered in various states.

Medical and Healthcare Expenses

Disabled individuals often face significant financial burdens related to their healthcare needs. To alleviate these costs, several tax benefits and exemptions are available.

• Medical Expenses: Deductions may be available for medical and dental expenses exceeding a certain percentage of income. For example, you can deduct expenses that exceed 7.5% of your adjusted gross income. Say you have an AGI of $50,000, and your family has $10,000 in medical bills for the tax year. You could deduct any expenses over $3,750 ($50,000 × 7.5%), or $6,250 in this example ($10,000 - $3,750).
• Healthcare Costs: Tax credits may offset healthcare insurance premium costs. The yearly health insurance tax credit varies depending on your income and household size. It's best to use the HealthCare.gov website to calculate yours.
• Long-Term Care: Certain long-term care expenses may be deductible or eligible for tax credits. Some local agencies may provide low-cost or free long-term care such as The United Way and your State's Medicaid program.
• Financial Assistance or Forgiveness: Many hospitals have a department in their business office that offers financial assistance or bill forgiveness. On your billling statement there should be a section explaining this. We have personally used this service several times due to long hospital stays.

Other Tax Benefits

Let's look at a few more benefits you may qualify for:

Education Benefits

• Qualified Tuition and Related Expenses (QTR) - Help offset the cost of higher education for eligible students, including those with disabilities.
• Tuition Excemption - Some states have free tuition for disabled students. Texas Blind and Deaf students get free tuition for colleges and universities in their state.
• Vocational Rehabililtation - This Department will pay for education and education expenses for disabled students.

Work Xxpenses

• Deduction for Qualified Business Expenses - Self-employed individuals with disabilities may be able to deduct certain business expenses, which can include expenses related to their disability.
• Disability-Specific Assistance - Some employers may offer financial assistance programs. These programs could vary widely, such as assistive technology reimbursements, transportation costs, or flexible spending accounts and Health Savings Accounts.

Retirement Savings

• ABLE Accounts - These accounts allow individuals with disabilities and their families to save money tax-free for qualified disability expenses.
• 401K & 403B - Some allow withdrawals for disability-related expenses.

It's best to contact your HR department for any discounts or benefits you qualify for and apply for all that you can.

Conclusion

Some of these benefits you may already be familar with, some you may not, it's best to research, research, research. Then apply, apply, apply.

This may seem overwhelming, but remember that every dollar saved or gained can make a significant difference. Don't let limited knowledge prevent you from accessing the support you deserve.

Please share this information with other disabled folks in your community. Together, we can raise awareness about these valuable resources and ensure that everyone has the opportunity to access the support they need.