25.2 Disabled Adult Child (DAC) Group

25.2.1 Introduction
25.2.2 Identifying a DAC Group
25.2.3 Determining the Income Disregard for DAC Group

25.2.3.1 Initial SSDC Payment Caused Loss of SSI
25.2.3.2 Increase to SSDC Payment Caused Loss of SSI

25.2.1 Introduction

Section 1634(c) of the Social Security Act requires states to consider disabled adult children who lose SSI eligibility as if they were still SSI recipients for Medicaid purposes so long as they would have remained otherwise eligible for SSI benefits but for their entitlement to (or increase in) Social Security disabled child (SSDC) benefits.

SSDC is a Social Security benefit for adults aged 18 and older who have a disability that began before they reached the age of 22. It is called a “child” benefit because it is based on the Social Security earnings record of the recipient’s parent (or grandparent, in some cases) who is disabled, retired, or deceased.

Note

Some people who receive SSDC and qualify for the DAC disregard may also receive Social Security benefits (such as SSDI) based on their own earnings record. If that Social Security benefit was received concurrently with SSI, then the person also qualifies as a 503 group. The portion of that Social Security payment that is attributable to COLA increases since SSI was lost must be disregarded in accordance with 503 policies (see Section 25.3 503 Group).

25.2.2 Identifying a DAC Group

Someone qualifies as a DAC for Medicaid purposes if they meet the following criteria:

They currently receive a Social Security disabled child (SSDC) payment.
They previously received SSI (or they were a 1619 participant), but they became ineligible for SSI/1619 due to excess income when they started receiving the SSDC benefit (or increase).

25.2.3 Determining the Income Disregard for DAC Group

When eligibility is determined for someone who meets DAC criteria, the disregard amount depends on whether it was the initial SSDC payment or an increase to the SSDC payment that caused the loss of SSI.

25.2.3.1 Initial SSDC Payment Caused Loss of SSI

If the initial SSDC payment caused the individual to lose SSI, the disregarded amount is the gross amount of the SSDC payment. The gross amount must include any Medicare premiums being deducted from the SSDC.

Example 1

While his mother worked, Harvey received a monthly SSI payment. When his mother retired, Harvey became eligible for an SSDC payment of $1,150. The SSDC payment exceeded the SSI income limits, causing Harvey’s SSI (and SSI Medicaid) eligibility to end. When Harvey applies for Medicaid, the entire amount of the initial SSDC payment ($1,150) is disregarded. Going forward, any subsequent COLA increases to his SSDC payment will be disregarded automatically as part of the annual COLA mass change.

If the initial SSDC payment caused the individual to lose SSI, and then the SSDC payment later increases (for example, when the parent passes away), the increase amount is counted as income and is not disregarded. All subsequent annual COLA increases are disregarded.

Example 2

While her father worked, Jane received a monthly SSI payment of $877.78. When her father passed away, Jane became eligible for an SSDC payment of $1,772 per month. The SSDC payment exceeded the SSI income limits, causing her SSI (and SSI Medicaid) eligibility to end. When Jane applies for Medicaid, the entire amount of the initial SSDC payment ($1,772) is disregarded. Two years later, Jane’s SSDC payment increased to $2,025 when her brother graduated from high school and stopped receiving Social Security survivor benefits. A new disregard amount is not calculated due to this increase. The original SSDC payment will continue to be disregarded for the Special Status Medicaid eligibility determination. However, the increase that occurred when her brother graduated will not be disregarded. Going forward, any subsequent COLA increases to the SSDC payment will be disregarded automatically as part of the annual COLA mass change.

25.2.3.2 Increase to SSDC Payment Caused Loss of SSI

SSDC payments can increase, for example, when the parent whose earnings record the SSDC payment is based on passes away, or when another person in the family who was getting Social Security benefits (resulting in a lower SSDC payment amount due to SSA’s “family maximum” rules) stops getting Social Security.

If an increase to the SSDC payment caused the individual to lose SSI, the disregard amount is calculated as follows:

Determine the gross SSDC payment amount immediately prior to the increase that caused loss of SSI.
Subtract that amount from the current gross SSDC payment. The gross amount must include any Medicare premiums being deducted from the SSDC.

Example 3

While his father worked, George received a monthly SSI payment. When his father retired and began receiving Social Security, George began receiving an SSDC payment of $600 per month. This caused George’s SSI payment to decrease, but he remained eligible for SSI (and SSI Medicaid). Ten years later, George’s father passed away and George's SSDC payment increased to $1,101, which caused George to lose SSI (and SSI Medicaid). George applies for Medicaid. The disregard amount must be determined as follows:

Determine through the SSA data exchange that the gross SSDC payment immediately prior to the increase that caused loss of SSI was $734 (the original $600 plus ten years of COLA increases).
Subtract $734 from the current gross SSDC payment amount ($1,101) to get a disregard amount of $367.

Going forward, any subsequent COLA increases to the SSDC payment will be disregarded automatically as part of the annual COLA mass change.

This page last updated in Release Number: 24-03
Release Date: 12/18/2024
Effective Date: 12/18/2024