Q: child has social security disability wondering if we can use back pay for closing cost on a family home

A: Yes, it is generally possible to use Social Security Disability Insurance (SSDI) back pay to cover closing costs when purchasing a family home. Here are a few key things to keep in mind:

1. Lump-sum back pay: When an individual is approved for SSDI, they often receive a lump-sum payment covering the period from the onset of their disability to the approval of their application. This back pay can be substantial and can be used for various purposes, including closing costs on a home.

2. Asset limits: However, it's essential to consider the asset limits for means-tested programs like Supplemental Security Income (SSI) and Medicaid. If the child or family members receive these benefits, having too much money in the bank could jeopardize eligibility. As of 2023, the individual resource limit for SSI is $2,000, and the limit for couples is $3,000.

3. ABLE accounts: If there are concerns about exceeding asset limits, consider opening an ABLE (Achieving a Better Life Experience) account. These tax-advantaged savings accounts allow individuals with disabilities to save money without affecting their eligibility for means-tested government benefits.

4. Consult with a professional: It's advisable to consult with a disability attorney, financial planner, or benefits counselor to discuss your specific situation and ensure that using the back pay for closing costs won't negatively impact the child's benefits or future financial stability.

In summary, using SSDI back pay for home closing costs is an option, but it's crucial to consider potential implications for other benefits and to seek professional guidance to make an informed decision based on your family's unique circumstances.