Protecting Military Survivors Benefits for Children with Special Needs

Career military retirees have long been able to defer a portion of their retirement pay to provide income for a surviving spouse or dependent child upon the retiree's death. However, parents who chose these benefits for a disabled child sometimes caused the child to lose valuable Medicaid benefits. Disabled children have additional financial considerations, such as Medicaid benefits, setting up ABLE accounts, or establishing special needs trusts as they grow up.

Through the National Defense Authorization Act of 2015, Congress enacted the Disabled Military Child Protection Act to address this concern. Retirees may now designate a special needs trust as a beneficiary of their Survivor Benefits Plan (SBP). Because the income will be paid directly to the trustee, it will not be countable income for Supplemental Security Income (SSI) or Medicaid. Military children with special needs will benefit from the SBP without losing other government benefits.

You need to have the correct type of special needs trust in place before making the election for SBP for your disabled child. Read more about SBPs for disabled children here or call Jean Galloway Ball or Loretta Morris Williams to learn how SBP benefits fit into planning for you and your family.