Everything You Need to Know About Disability and Divorce

In the United States, according to worldpopulationreview.com, somewhere between 35%-50% of first marriages in the United States end in divorce. For second marriages, that percentage jumps up to around 60%. For third marriages and beyond, it rises even further, with more than 70% ending in divorce. Some studies have shown that divorce rates rise when disabilities are introduced into the situation. Going through a divorce is never an easy or fun situation. Divorces tend to be messy and confusing. They are seldom straightforward. Aside from the emotional toll a divorce can take on the parties involved, it can also take a heavy financial toll. If one or both of the parties involved in a divorce have a disability and are receiving any kind of disability pay from the government, this can further complicate the process and may become a major source of contention. 

Additionally, the type of disability a person possesses may affect their rights to file for divorce. Of course, speaking with a qualified divorce lawyer is an important step for anyone contemplating taking this route with their relationship. If you have a disability and are planning to divorce, before speaking with an attorney, you may want to know a little more about what rights you have when it comes to your disability income, as well as what rights you have to initiate divorce. 

Can My Spouse Take My Disability Income in a Divorce?

This is an important question with a complicated answer that is best addressed by asking a series of other related questions. The shortest reply is: Maybe. There is a chance that your spouse will be entitled to some of your disability payments in the event of a divorce. However, how much they are entitled to, if any, will depend on multiple factors. Here are several questions to consider before you enter into divorce mediation. The answers may help you determine what will happen with your disability payments after your divorce:

• What kind of disability income are you receiving? 

• Where is it coming from? (Are you receiving federal, state, or private disability payments?) 

• How long have you been receiving disability income, and how long will it last?

• Were you receiving disability payments before you were married? 

• Did you become disabled while serving in the military? 

Let’s delve a little deeper into each of these questions and why they matter. 

Federal Disability Benefits Vs. State and Private Disability Benefits

The two largest federal disability benefits programs are Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). If you or your spouse have been receiving either of these types of benefits, here’s how a divorce may affect your payments:

• SSDI is based on an individual’s work record, not their spouse’s. So, your benefits won’t change after a divorce, but if you’ve been ordered to pay alimony or child support, a portion of your benefits may be garnished. 

• If you were receiving SSDI benefits based on your spouse’s coverage while married, you would continue to receive them after divorce, provided that you are older than 62 years old, were married for more than ten years, have not remarried, and are not eligible for greater benefits based on your own work history. 

• SSI benefits are based on need. Your SSI payments could actually increase after a divorce. Additionally, these benefits are protected and cannot be garnished in order to pay alimony or child support. 

According to the Patient Advocate Foundation, a small handful of states offer temporary benefit programs for short-term disabilities. Presently, only five states (CA, HI, NJ, NY, and RI) have state-sponsored disability programs funded by compulsory employee contributions. Eligibility requirements for these benefits differ from state to state. In the event of a divorce, payments from these programs are unlikely to enjoy the same protections offered by the larger federal benefits programs. The same is true for private disability benefits, which are typically funded by an individual or provided through large commercial insurers as part of an employer’s benefits package and paid for by monthly premiums. 

Service-Connected Injury Benefits

A service-connected disability is an injury or illness that occurred while actively serving in the military, or that previously existed and was exacerbated by time served. This includes physical and mental health concerns. Veterans with these types of disabilities who did not end their time in the military under dishonorable circumstances are eligible to receive monthly disability compensation. The amount of compensation varies for each individual and is dependent on the degree of each disability and the number of eligible dependents. Some Veterans with extremely severe disabilities may also be eligible to receive extra benefits, known as special monthly compensation (SMC). These benefits are exempt from income taxes at both the state and federal levels. They are also somewhat protected in the event of a divorce. According to federal law, service-connected benefits are not considered to be marital property, meaning they cannot be divided as such in a divorce. They may be counted as income when considering alimony and child support payments. 

Loss of Earning Capacity or Deferred Compensation

Are your benefits intended to compensate you for a personal loss of current or future earning capacity? If so, they are more likely to be viewed as yours and yours alone in the event of a divorce and so would not be subject to division. Do your benefits stop when you reach retirement eligibility? If so, a case can be made that they are tied to your loss of earning capacity. In contrast to benefits meant to compensate an individual for loss of earning capacity, benefits that stem from a deferred compensation package are much more likely to be considered joint property in the event of a divorce and, as such, will be subject to division. 

When Did Your Disability Benefits Begin?

Depending on when your disability benefits began and where they are derived from, it’s possible that only a small portion of your benefits would be subject to division in your divorce settlement. If your benefits come from a deferred compensation package, but you were contributing to that compensation package before your marriage, and the amount of benefits you are eligible for increased after your marriage based on a change in contributions made, then you might only be subject to divide the amount you started adding to your contributions after you were married. 

Social Security Retirement

Social Security Retirement benefits are monthly payments intended to replace a portion of your income when you reach retirement age and reduce your working hours or stop working entirely. This benefit is not likely to replace your entire former income, so appropriate planning is encouraged. As with SSDI, mentioned above, so too can you receive Social Security Retirement benefits based on your ex-spouse’s record, provided you meet the following eligibility requirements:

• You are at least 62 years of age

• You are unmarried

• You were married for at least ten years

• You are not entitled to benefits of a greater value based on your own merit

If you receive benefits this way, the amount you receive will have no bearing on the benefits your ex-spouse will receive. 

Medicare

Medicare is a federal health insurance plan available to people aged 65 or older.  It is sometimes also made available to people with certain disabilities and those who have been diagnosed with end-stage renal failure, or ALS. It consists of four parts:

• Medicare Part A: Hospital Insurance

  • Hospital stays, nursing facility care, and hospice care are covered under Part A

  • This part of Medicare is free for most

• Medicare Part B: Medical Insurance

  • Various doctor visits, outpatient services, medical supplies, and preventative care are covered under Part B

• Medicare Part C: Medicare Advantage Plans

  • Offered by private companies, approved by Medicare

  • Will generally offer everything covered by Parts A and B but may also offer extra coverage, such as dental, hearing, or vision; may also offer prescription drug coverage (Part D)

• Medicare Part D: Prescription Drugs

  • Prescription drug costs, as well as some recommended shots and vaccines, are covered under this part

Your marital status has no impact on your eligibility for Medicare. It may, however, affect the price of your monthly premium for Medicare Part A. As previously stated, Medicare Part A is free for most. Those who have worked and paid Medicare taxes for at least ten years (40 quarters) should be qualified to receive free-premium Part A. If you have not qualified for the free premium based on your own work history, you may be eligible to use your former spouse’s work history to qualify, provided that you were married to them for at least ten years, and provided that they worked and paid into Medicare taxes for at least ten years. 

What If One Spouse “Lacks Capacity” to File for Divorce?

What does it mean when we say that someone “lacks capacity”? Put simply. This means that a person is unable to make decisions on their own. They may be considered mentally unstable due to some kind of cognitive impairment, such as dementia or brain trauma, or due to a mental health disorder, such as schizophrenia. The laws surrounding whether or not a person who lacks capacity can file for divorce differ from state to state. Some jurisdictions will only allow a mentally incapacitated individual to initiate divorce proceedings if a guardian or conservator can prove that it is in their best interests to do so. If a person is determined to lack the mental capacity to file for divorce, typically, their spouse may still file for divorce. 

How to Establish a Special Needs Trust

A Special Needs Trust  (SNT) is a legal arrangement made in order to preserve a person’s eligibility for government benefits that are based on need. Under a Special Needs Trust, a person with a disability (also called a beneficiary in this situation) arranges for another person or financial institution (known as a trustee) to hold and manage all of their assets. As the beneficiary will not have ownership of whatever assets are in the trust, they can remain eligible for needs-based benefit plans that place limits on assets. Typically, this type of trust is intended to supplement but not replace a person’s government-provided benefits. 

There are first-party SNTs, which are typically funded by the beneficiary themself. Under federal law, this type of SNT will not count for Medicaid or SSI purposes unless the beneficiary is under 65 years of age when the trust is created and funded. The trust must be created solely for the benefit of the beneficiary and must also be irrevocable. It must stipulate that Medicaid will be paid back when the trust is terminated or if the beneficiary passes away. 

A third-party SNT is funded by assets belonging to anyone other than the beneficiary. This type of trust does not provide stipulations regarding Medicaid. The person who creates this trust will be responsible for determining what happens to the assets in the event of the beneficiary’s passing. 

In the event of a divorce, a person with disabilities will benefit from having a first-party SNT to harbor their portion of any divided marital assets, as well as any required monthly alimony or child support payments. It is important to note that an ex-spouse would likely find it difficult to claim any assets harbored in a third-party SNT, but they may be able to lay claim to certain assets belonging to a first-party SNT. Which assets in a first-party SNT are protected from division during divorce proceedings will vary from state to state. 

Resources for Folks with Disabilities Going Through a Divorce

Anyone going through a divorce needs a good support system. The emotional, practical, and sometimes financial support of friends, family, and loved ones can be invaluable in such a situation. If you are going through a divorce and you have a disability, in addition to leaning on your traditional network of support, you may need to find other outside resources to help with things like life planning, childcare, or advocacy. Below are some organizations and websites that may be able to give you the extra support you need. 

Help with Disability Case Management and Financial Aid

The Patient Advocate Foundation is a national non-profit organization that provides case management assistance and financial aid to Americans with chronic, life-threatening, and debilitating disabilities. You can call them Mon - Fri, from 8:30 am to 5:00 pm, EST, at 1-800-532-5274

Planning for the Future

The Arc of the United States is a national organization whose mission is to promote and protect the rights of those with intellectual and developmental disabilities and to actively support their full inclusion and participation within the community throughout their lives. Contact the, at 202-534-3700

Help for Parents With Disabilities

The Child Welfare Information Gateway has links to multiple useful services for parents with disabilities. 

Parenting and Custody Agreements</h3>

Numerous websites provide free or inexpensive custody templates or co-parenting plan templates to serve as a guideline when going through a divorce. TemplateLab is one such website.