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The Arc Applauds U.S. Supreme Court Decision in Special Education Case: “The IDEA Demands More”

/in , /by The Arc

By: Shira Wakschlag, Director of Legal Advocacy & Associate General Counsel

On Wednesday, in the second major win for students with disabilities and their families before the U.S. Supreme Court this term, the Court issued a unanimous decision in the special education case Endrew F. v. Douglas County School District RE-1. In an opinion authored by Chief Justice John Roberts, the Court clarified the test for determining whether school districts have met their obligation to provide a free appropriate public education (FAPE) to students with disabilities, definitively rejecting the incredibly low standard utilized by the Tenth Circuit in this case. Specifically, the Court held that:

To meet its substantive obligation under the IDEA, a school must offer an IEP reasonably calculated to enable a child to make progress appropriate in light of the child’s circumstances…After all, the essential function of an IEP is to set out a plan for pursuing academic and functional advancement…A substantive standard not focused on student progress would do little to remedy the pervasive and tragic academic stagnation that prompted Congress to act.

Significantly, this is the first time the Court has articulated a specific standard of review for educational benefit required for schools to meet their FAPE obligations under the IDEA. In 1982, the Court held in Board of Education of Hendrick Hudson Central School District v. Rowley that the IDEA establishes a substantive right to FAPE for children with disabilities but declined to establish a specific standard for determining when children with disabilities are receiving sufficient educational benefits to satisfy the IDEA. Lower courts have thus interpreted this substantive right in a variety of ways, some applying an incredibly low standard of review as the Tenth Circuit did in this case, while others have established a higher bar and called for a “meaningful benefit” standard.

Here, Drew, a child with autism, was removed from public school in fourth grade by his parents when his behavior began deteriorating and he ceased making academic progress. His IEP repeated the same basic goals from year to year, indicating a lack of progress toward the IEP goals. His parents believed a dramatic change to the IEP was necessary, but the school district continued to present the same IEP without any meaningful changes. Accordingly, Drew’s parents put him in a private school that specialized in educating students with autism and developed a behavioral intervention plan as well as more meaningful and robust academic goals. As a result, Drew began making dramatic progress. Drew’s parents then met again with the school district who presented them with a new IEP that did not incorporate any goals or approaches that would match the level of services he was receiving at the private school.

His parents filed a complaint with the Colorado Department of Education seeking tuition reimbursement for Drew’s private school due to the school district’s failure to provide him with a FAPE since his final IEP was not “reasonably calculated to enable him to receive educational benefits.” The Administrative Law Judge disagreed and the district court and Tenth Circuit affirmed. Citing Rowley and prior Tenth Circuit precedent, the panel noted that it had long interpreted Rowley’s “some educational benefit” requirement to mean that an IEP was adequate as long as it was calculated to confer an educational benefit that is “merely more than de minimis.” “De minimis” is a Latin phrase meaning “so minor as to merit disregard.”

As noted above, the Supreme Court unequivocally rejected this bare bones approach to evaluating educational benefit and articulated a new, higher standard. The Court explained that when a child with a disability is integrated into the regular classroom, the IDEA typically requires providing a level of instruction that is reasonably calculated to permit advancement through the general curriculum. Where that is not a reasonable expectation, this does not mean that the IEP should be stripped of substantive and meaningful standards. Rather, the IEP:

must be appropriately ambitious in light of [the student’s] circumstances, just as advancement from grade to grade is appropriately ambitious for most children in the regular classroom. The goals may differ, but every child should have the chance to meet challenging objectives. (Emphasis added.)

It is important to note that this decision overturns a standard utilized by Judge Neil Gorsuch who just completed his confirmation hearing before the Senate Judiciary Committee following his nomination to the Supreme Court. Last week, The Arc published a review of Judge Gorsuch’s record on disability rights and highlighted his decision in Thompson R2-JSchool District v. Luke P. in which he employed the merely more than de minimis standard that was later used by the Tenth Circuit in the present case. Dr. Jeffrey Perkins, Luke’s father, testified before the Judiciary Committee on Thursday, noting that Judge Gorsuch’s articulated standard for an educational benefit that is “just above meaningless” was “devastating” to the family and “threatened” Luke’s “access to an appropriate education and thus to a meaningful and dignified life.” As Dr. Perkins explained:

Luke will always need support in a world that still seems perplexing and threatening to him. But his quality of life after 13 years of appropriate education is vastly better than it would have been otherwise. He cooks and does household chores. He is able to shop, work, eat and play in the community…His present life would not have been achievable without an appropriate education.

In his 10th Circuit ruling, Judge Gorsuch eviscerated the educational standard guaranteed by the IDEA…Legal philosophy and case law aside, such an interpretation clearly fails the common sense test. Why would Congress pass a law with such a trivial intent?

The Arc, as part of a large coalition of disability advocacy groups, participated in an amicus brief in support of Drew in November and attended oral arguments before the Court in January. While the standard articulated by the Court is not a detailed formula that specifically defines what appropriate progress will look like from case to case, it is unquestionably more demanding than the standard laid out by Judge Gorsuch and various other circuit court judges. In a time when the ability of people with disabilities to live in the community is under threat, the Court’s unequivocal statement that the “IDEA demands more” is a major victory for students with disabilities and their families that should be celebrated.

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What Are the Five Worst Things About the ACA Repeal Bill?

/in /by The Arc

Recently the House Energy and Commerce Committee and Ways and Means Committee passed legislation to cut Medicaid and repeal major portions of the Affordable Care Act (ACA). This bill is moving fast, and we expect the House to vote on it this week. Simply stated, this legislation is devastating.

Here are five reasons why:

For over 50 years Medicaid has been a Federal/State partnership where the costs were shared between the states and the federal government. Under this cut and cap proposal, the federal government is turning its back on the states and leaving huge funding gaps for the states to fill.
  1. People with disabilities get slammed by Medicaid cuts
    $880 billion would get cut from the Medicaid program over the next decade. This cut comes from 1) changing the financing structure of the program to a per capita cap model, and 2) phasing out the “Medicaid expansion,” which incentivizes states to cover people up to 138% of the federal poverty level (income of $16, 642 per year) for an individual.The result is a cost shift to states that would likely force states to choose among options such as:

    • Cut eligibility. People with disabilities, low income adults, children, pregnant women, and seniors could be cut from the rolls.
    • Cut services. Current “optional” services such as in home services, assistive technology, transportation, supported employment, and much more could be up for grabs.
    • Cut quality. If federal Medicaid regulations are lost, it could be cheaper for states to warehouse people with disabilities in institutions rather than provide quality home and community based services.
  2. Millions of Americans will lose health care
    According to the nonpartisan Congressional Budget Office, there will be 24 million more Americans without health insurance by 2026. This includes 14 million fewer people enrolled in Medicaid. This reality contradicts the many assertions from the President and many Members of Congress that no one would lose health care.
  1. Middle class families pay more
    For moderate-income families, the ACHA’s reduction in tax credits could make coverage out of reach. For families with income below 250% of poverty, estimates show that by 2020, when many provisions of the bill kick in, costs would increase by over $9,000.
  1. The tax breaks favor the rich, corporations, and health care providers
    The ACHA repeals many of the tax provisions that are used to help finance the ACA. Millions of low and moderate income people would lose their health insurance to pay for $600 billion in tax cuts for the rich and the insurance, drug, and medical device industries. This includes $285 billion in taxes for the top 2% of earners and the elimination of the cap that insurance companies can deduct from their taxes for executives making over $500,000 per year.
  1. Prevention Takes a Hit
    The Prevention and Public Health Fund, which provides crucial financial support for public health and other services that assist people with disabilities. would be gone in 2018. According to analysis by the Trust for America’s Health, the U.S. Centers for Disease Control and Prevention would lose 12 percent of its annual budget if the Prevention and Public Health Fund is repealed.
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Celebrating the Far Too Often Lost Right to Make Your Own Decisions

/in /by The Arc

During Developmental Disabilities Awareness Month, The Arc celebrates the decision to allow Ryan King, a man with intellectual and/or developmental disabilities (IDD), to make his own decisions.

According to a Washington Post column, Ryan King is a man in his 30s who was placed under the guardianship of his parents when he turned 18. For over 15 years, Ryan has worked at Safeway (a major grocery store chain in the Washington, DC area) and has been able to manage his own day-to-day needs. For far too long, families like Ryan King’s, have been told they must put their children under guardianship without educating them on other less restrictive decision-making options. Too often courts have approved petitions for guardianship without first carefully exploring whether less restrictive alternatives could be effective.

Last year, Judge Russell F. Canan of the Superior Court of the District of Columbia, Probate Division empowered Ryan King to make his own decisions. Judge Canan ruled that through the use of supported decision-making Ryan was able to independently “receive and evaluate information effectively” and “communicate decisions.” The court terminated the guardianship over Ryan King. In re: Ryan Herbert King, 2003 INT 249 (D.C. Super. Ct. October 6, 2016) (unpublished order).

The Arc believes that people with IDD, such as Ryan King, must be presumed competent to make their own decisions. Through the process of supported decision-making, people with IDD work with family members, friends, and other trusted advisors to get the support they need to make their own decisions and to build decision-making skills. Depending on each person’s needs, legal agreements can be put in place to enable supporters to help implement the person’s decisions. This can include appointing a representative payee or using powers of attorney, health care directives, and supporter agreements. Simply put, supported decision-making promotes autonomy and should always be explored along with other less restrictive alternatives before guardianship is considered.

The Arc and our Center for Future Planning® are committed to promoting autonomy and expanding the use of decision-making supports. Here are some things we are focusing on:

Information. Families should have access to information about all options for assisting their family member to make decisions over the life course. Schools should not give legal advice to students and families, and should provide students and families with information about less restrictive alternatives to guardianship.

Skill-building. Individuals with IDD should have access to supports and experiences to learn decision-making skills from an early age and throughout their lifetimes in educational and adult life service systems.

Less Restrictive Alternatives. State laws should require that less restrictive options are tried and found ineffective before guardianship is considered.

Rights. Regardless of their guardianship status, all individuals with IDD retain their fundamental civil and human rights (such as the right to vote and the right to make decisions related to sexual activity, marriage and divorce, birth control, and sterilization) unless the specific right is explicitly limited by court order.

To explore decision-making options and to get tips on how to build decision-making skills, visit The Arc’s Center for Future Planning®.

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What’s at Stake at the Supreme Court for People With Disabilities? The Arc Reviews Judge Gorsuch’s Record on Disability Rights

/in /by The Arc

By: Shira Wakschlag, Director of Legal Advocacy & Associate General Counsel

On January 31, 2017, President Donald Trump nominated Judge Neil Gorsuch of the Tenth Circuit Court of Appeals for a seat on the U.S. Supreme Court. Judge Gorsuch’s confirmation hearing before the Senate Judiciary Committee is set for March 20. A close review of Judge Gorsuch’s opinions pertaining to people with disabilities reveals a jurist with an exceptionally narrow view of the protections offered by federal disability rights laws—an approach that has led to deeply troubling results for members of The Arc in the Tenth Circuit’s jurisdiction. While Judge Gorsuch is a staunch proponent of the inherent dignity of all human beings, including those with disabilities, during his tenure on the Tenth Circuit he has not been a champion for robust enforcement of disability rights laws that are so crucial to enabling individuals with disabilities to lead dignified lives in the community, free from discrimination.

In cases involving the Americans with Disabilities Act (ADA), Individuals with Disabilities Education Act (IDEA), the Rehabilitation Act, and the Fair Housing Act in which Judge Gorsuch authored the majority or concurring opinion, he almost always ruled against the plaintiff with a disability. Perhaps the most common thread uniting these opinions is Judge Gorsuch’s strictly textualist approach to interpreting laws. This approach leads him to frequently disregard legislative history and Congressional intent in favor of deciphering the “objective” meaning of the law’s text in a vacuum, ultimately resulting in very narrow interpretations of the protections guaranteed by federal disability rights laws.

For example, in Hwang v. Kansas State University (2014), the plaintiff, a professor who had been employed by the university for 15 years, requested to extend her 6-month medical leave for a finite period. Due to a cancer diagnosis and weakened immune system, she sought to avoid a flu epidemic that arose on campus. When her employer refused to make an exception to its 6-month leave policy, the plaintiff sued, alleging disability discrimination under the Rehabilitation Act. Judge Gorsuch found for the defendant employer on the grounds that, as a matter of law, a leave of more than 6 months was not a reasonable accommodation. In this opinion, Judge Gorsuch demonstrated a troubling view of disability accommodations in the workplace, implying that the plaintiff employee was seeking not to work and should therefore be funneled into the public benefits system rather than the workplace:

Ms. Hwang’s is a…problem other forms of social security aim to address. The Rehabilitation Act seeks to prevent employers from callously denying reasonable accommodations that permit otherwise qualified disabled persons to work—not to turn employers into safety net providers for those who cannot work.

Remarkably, Judge Gorsuch affirmed dismissal of the case prior to fact discovery, thereby precluding the plaintiff from the ability to present evidence. He also failed to engage in the individualized inquiry required in such cases, in conflict with U.S. Supreme Court precedent, guidance from the Equal Employment Opportunity Commission, and four other circuit courts (in addition to a prior conflicting decision within the Tenth Circuit). An amicus brief on behalf of several disability rights advocacy groups requesting a rehearing referred to the decision as “unprecedented.”

Another standout case is Thompson R2-JSchool District v. Luke P. (2008), in which Judge Gorsuch articulated an extraordinarily low standard for educational benefit that is now under review before the U.S. Supreme Court in another case arising from the Tenth Circuit, Endrew F. v. Douglas Cty. Sch. Dist. Re-1. In Luke P., the hearing officer, administrative law judge, and the district court found for the student, noting that the district had failed to provide a free appropriate public education as demonstrated by the student’s inability to generalize the skills he learned at school to settings outside of school. These decisions were based on the notion that this level of minimal progress towards IEP goals was not enough to constitute a meaningful educational benefit under the IDEA. Judge Gorsuch disagreed:

[A] school district is not required to provide every service that would benefit a student if it has found a formula that can reasonably be expected to generate some progress on that student’s IEP goals…Rather, [the IDEA] much more modestly calls for the creation of individualized programs reasonably calculated to enable the student to make some progress towards the goals within that program.

In finding for the school district, Judge Gorsuch rejected the plaintiff’s argument that the purpose of the IDEA, as stated clearly by Congress, was to help students with disabilities achieve more meaningful progress that led to a greater possibility of independent living. Despite legislative history to the contrary, Judge Gorsuch noted that independence was not an outcome-oriented guarantee of the law. In November, along with a large coalition of disability advocates, The Arc submitted an amicus brief before the U.S. Supreme Court challenging this same low standard employed by the Tenth Circuit in the Endrew F. case. In another IDEA case, A.F. v. Espanola Public Schools (2015), where Judge Gorsuch found for the school district, the dissenting judge noted that the outcome “was clearly not the intent of Congress and…harms the interest of the children that IDEA was intended to protect.”

Judge Gorsuch has also demonstrated a narrow view of class actions, a crucial tool for individuals with disabilities to enforce their rights in court. For example, in Shook v. Board of County Commissioners of County of El Paso (2008), Judge Gorsuch affirmed the denial of class certification to a group of plaintiffs alleging that jail conditions for prisoners with psychiatric disabilities violated the Eighth Amendment’s ban against cruel and unusual treatment. In so finding, Judge Gorsuch reasoned that it would be too difficult to craft appropriate systemic relief for the class as a whole given the variety of psychiatric disabilities represented in the class.

These decisions are more than just abstract discussions of legal theories – they have real-life consequences for The Arc’s constituents. In particular, Judge Gorsuch’s effectively pro-school district stance has been devastating for students with disabilities and special education advocates in the Tenth Circuit. Advocates from AdvocacyDenver (a chapter of The Arc), noted that the Luke P. decision was “seismic” for students with disabilities in Colorado, leading school districts to believe that they had a champion in the Tenth Circuit. This dramatically changed their approach to IEP disputes and empowered them to act to the detriment of students with disabilities under the belief that they would almost always prevail in court. Overall, advocates from the chapter noted that the Tenth Circuit offers some of the weakest protections for students with disabilities and their families in the country and that Judge Gorsuch’s decisions on the IDEA have had deeply problematic results for special education advocates and students with disabilities in Colorado.

On the other hand, Judge Gorsuch, like The Arc, is a staunch opponent of physician-assisted suicide. While he has not yet addressed this issue in court, Judge Gorsuch authored a 2006 book, The Future of Assisted Suicide and Euthanasia, in which he notes that: “[a]ll human beings are intrinsically valuable…any line we might draw between human beings for purposes of determining who must live and who may die ultimately seems to devolve into an arbitrary exercise of picking out which particular instrumental capacities one especially likes.” Among other reasons for his opposition, Judge Gorsuch links the practice to the history of societal devaluation of people with disabilities embodied by the eugenics movement, flagging the inherent risk for abuse the system poses for people with disabilities.

Judge Gorsuch’s views on this subject and his recognition of the inherent dignity of people with disabilities reflect an important area of common ground. The question is whether his jurisprudence will ever link this belief in inherent dignity with a robust protection of rights that is so crucial to the ability of people with disabilities to learn, work, and lead dignified lives in the community among their peers. During his tenure on the Tenth Circuit, the answer to this question has largely been no.

More information about Judge Gorsuch’s majority and concurring opinions relating to disability rights can be found here.

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The Arc on CBO Score of American Health Care Act

/in /by The Arc

Washington, DC – The Arc released the following statement in response to the Congressional Budget Office’s report on the American Health Care Act, the plan to repeal the Affordable Care Act:

“The numbers are in, and they are devastating for people with intellectual and developmental disabilities. The Congressional Budget Office’s (CBO) score of the American Health Care Act confirms what we already knew – this bill is dangerous and the price we will pay is the health of millions of Americans including those with disabilities. We were promised a replacement for the Affordable Care Act, yet the plan laid out by this bill is insufficient to keep people with disabilities insured or support anyone with complex medical needs. The numbers underscore how dire the situation is, estimating that by next year 14 million more Americans would be uninsured and by 2026, 24 million will be without insurance.

“This bill is paid for by permanently altering the federal/state partnership of Medicaid, the primary health insurance program for people with disabilities. Thanks to the Medicaid expansion under the Affordable Care Act, millions of people, including people with disabilities, their family members, and their support professionals, have gained access to health coverage. Medicaid also is the single largest source of funding for the long term supports and services people with disabilities depend on to live and work in the community, and to avoid even more costly institutional care.

“The American Health Care Act will undo all of that by cutting $880 billion from Medicaid in the next decade, leading to 14 million fewer individuals being covered by Medicaid by 2026. Lives have been saved because people have had access to affordable, comprehensive health coverage, including long term supports and services. It isn’t hard to imagine what the outcome

will be as this program is cut and restructured. CBO anticipated that, in response to changes made by the bill, states could ‘cut payments to health care providers and health plans, eliminate optional services, restrict eligibility for enrollment, or (to the extent feasible) change the way services are delivered to save costs.’ Supporters of this bill are putting the health, wellbeing, and freedom of their constituents with disabilities at risk.

“This bill shows complete disregard for the health of people with disabilities. Claims that this bill makes health insurance more affordable are simply untrue. Look at the numbers, they show the reality of what this legislation will do,” said Peter Berns, CEO of The Arc.

The Arc advocates for and serves people with intellectual and developmental disabilities (IDD), including Down syndrome, autism, Fetal Alcohol Spectrum Disorders, cerebral palsy and other diagnoses. The Arc has a network of over 650 chapters across the country promoting and protecting the human rights of people with IDD and actively supporting their full inclusion and participation in the community throughout their lifetimes and without regard to diagnosis.

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Nuts and Bolts of Income Tax for Individuals With Disabilities and Their Families

/in /by The Arc

By Elizabeth L. Gray, CELA, Special Needs Alliance®

As we approach tax season, it is important to understand the different tax credits, deductions, and liabilities affecting individuals with disabilities and their families. This is a complicated subject. This article provides general information. If you would like to get advice for your situation, you should consult a professional with knowledge of both taxation and special needs planning.

Claiming a Dependent

The IRS defines an individual with disabilities as someone with a permanent and total disability that results in the inability of that individual to engage in any substantial gainful activity. A qualified physician must certify that the condition has lasted or can be expected to last continuously for 12 months or more, or that the condition can be expected to result in death. Substantial gainful activity is considered the performance of significant duties over a reasonable period of time while working for pay or profit, or in work generally done for pay or profit. Full-time work (or part-time work done at the employer’s convenience) in a competitive work situation for at least the minimum wage conclusively shows that the individual is able to engage in substantial gainful activity.

You can claim an individual with disabilities as a dependent when:

  • they have lived with you for more than half of the tax year;
  • you have provided at least half of their support for the tax year; and
  • they are your child, stepchild, foster child, or a descendant of these; or
  • your brother, sister, step-sibling, father, mother, grandparent or other direct ancestor of yours.
  • they are not filing a tax return of their own.

Tax Credits and Exemptions

  • Child tax credit – For each “qualifying child” who will be under the age of 17 at the end of the year, you may take up to a $1,000 credit, based on a sliding income scale.
  • Child and dependent care tax credit – This helps to defray the cost of care services needed in order for you and (if you’re married) your spouse to work. Married persons must both work, or one must work while the other is a full-time student, has a disability, or is looking for work (provided that the spouse looking for work has earnings during the year). There is no income ceiling on this credit, which can equal 20-35 percent of expenses incurred, up to $3,000 for one qualifying individual, and $6,000 for two or more qualifying individuals. People with higher incomes get a smaller credit than those with more modest incomes.
  • Earned income credit – This is available for people who work and have a child meeting the dependent qualifications previously described. The child must be under 19, a full-time student under 24, or have a permanent and total disability
  • Personal exemption for dependent – The maximum allowable for tax year 2016 is $4,050.The dependent’s gross income for the tax year must be less than $4,000. Gross income does not include income from services the person performs at a sheltered workshop.

Medical Deductions

The following deductions should be considered both by adults claiming a dependent and by individuals with disabilities who are filing for themselves. For most individuals, these medical expenses are deductible only when they exceed 10 percent of the taxpayer’s adjusted gross income. Until tax year 2017, a 7.5 percent threshold applies to filers who are 65 and older. Typical examples include:

  • Unreimbursed health care expense – Must total more than 7.5 percent of adjusted gross income. Remember to include travel expenses to and from medical treatments, certain insurance payments from already-taxed income (i.e., long-term care insurance), uninsured medical treatments (eyeglasses, contact lenses, false teeth, hearing aids), laser vision corrective surgery, and most medically necessary costs prescribed by a doctor. For example, if the doctor prescribes a humidifier for the home to help with chronic breathing problems, the device and the additional electricity costs to operate it, could be partially deductible. Remember to keep all receipts for any special medical needs.
  • Special schooling, training, or therapy, including medically recommended exercise programs. This includes amounts paid for meals and transportation.
  • Aides required for the dependent to benefit from his or her education.
  • Diagnostic evaluations.
  • Certain home improvements and/or modifications required as a result of your dependent’s condition.
  • Special medically recommended diets.
  • Conferences and seminars that are medically recommended and that deal specifically with the medical condition the child has, and not just general health and well-being. Unfortunately, this does not include deductions for meals and lodging incurred while attending the conference or seminar.

Considerations When Filing for Yourself

If you receive Supplemental Security Income (SSI) payments, those benefits are not taxable. In addition, the SSI payments do not get included in Social Security benefits.

What about regular Social Security or Railroad Retirement benefits? Part of the amount received may be taxable. Generally, if the only income received during the year was Social Security or Railroad Retirement, then the amount would not be taxable. However, if an individual received income during the year in addition to Social Security or Railroad Retirement, then half of the Social Security benefits plus the other income may be taxable, depending on your filing status (individual, head of household, etc.) and the total.

If you are receiving disability benefits under a disability retirement plan that was funded by your employer, those benefits are considered earned income until you reach your minimum retirement age. However, payments received from a disability insurance policy under which you have paid the premiums are not earned income.

Other considerations include:

  • Impairment-Related Work Expenses deduction – This is for attendant care services necessary for you to maintain employment. Such services qualify as a trade or business expense. This is available only if the you have a physical or mental disability that is a functional limitation to employment or that substantially limits one or more major life activities (i.e., walking, speaking, performing manual tasks, breathing, learning, or working).
  • Elderly and disabled tax credit – Available to every U.S. citizen, who is 65 or older at any time during the tax year. Tax payers who are under 65 may claim the tax credit if they are retired on permanent and total disability under an employer’s plan, or if they receive taxable disability income during the year and do not reach mandatory retirement age by the first day of the tax year.

Special Needs Trusts and ABLE Accounts

Special needs trusts (SNTs) and ABLE accounts are two important financial planning tools that can significantly contribute to an individual’s quality of life. It is important to understand tax liability for each.

Special Needs Trusts

Income generated by a SNT is taxable and trust expenditures are eligible for deductions, but who is liable depends upon the type of trust involved:

  • A third party trust is set up by an individual for the benefit of someone else (for instance, a parent may establish a trust for a child). When the trust is revocable, meaning that the person who created it can make changes, it is considered a grantor trust and taxes are paid by the person who established it. Once the trust becomes irrevocable, it must report any taxable income or gross income of $600 or more in a given tax year. The trust may either pay the tax itself or issue a form facilitating payment by the beneficiary. Issuing the form to the beneficiary may not be a bad thing because trust tax rates are high, while the beneficiary may be in a low-income tax bracket. Given the personal exemption and, in many instances, the standard deduction, no tax payment may be due. Distributions that represent trust income become a tax liability for the beneficiary.
  • First party trusts, created with funds belonging to the beneficiary with disabilities, are automatically considered grantor trusts in most states (in some locations, it may be necessary to add appropriate language to the trust document), so the beneficiary is responsible for taxes.
  • If an SNT is structured as a qualified disability trust, it may be eligible for larger exemptions. In addition to other requirements, the trust must be irrevocable, and the beneficiary must be under 65 when the trust is created.

ABLE Accounts

As a quick reminder, ABLE (Achieving a Better Life Experience Act of 2014) accounts are modeled after the Section 529 savings accounts and enable certain individuals with disabilities to save funds without endangering their eligibility for means-tested government benefits. Contributions to an ABLE account are not tax-deductible and are made with after-tax dollars. However, ABLE account earnings grow tax-free unless distributions in a given tax year are not made for the designated beneficiary’s qualified disability expenses. Qualified disability expenses consist of a wide range of expenditures: education, housing, transportation, employment training and support, assistive technology and personal support services, health prevention and wellness, and more. In addition, distributions for qualified disability expenses are not considered income.

This overview is not intended as tax advice. Individuals with disabilities and their families should consult a tax professional about their specific circumstances.

The Special Needs Alliance (SNA)® is a national non-profit comprised of attorneys who assist individuals with special needs, their families, and the professionals who serve them. SNA is partnering with The Arc to provide educational resources, build public awareness, and advocate for policies on behalf of people with intellectual/developmental disabilities and their families.

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The Arc on House Health Care Bill: “Medicaid Will Be Decimated”

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Washington, DC – The Arc released the following statement on the draft legislation that repeals the Affordable Care Act (ACA) and pays for it by decimating Medicaid, a program critical to the lives of people with intellectual and developmental disabilities:

“This legislation ends Medicaid as we know it. If it is enacted, Medicaid will no longer be a state and federal partnership – the federal government will cap what it provides, leaving the states to pick up the pieces. It will have a dire impact on the lives of people with intellectual and developmental disabilities who rely on Medicaid and the Affordable Care Act for their health care, community supports, and as a way to live independently in their communities.

“Thanks to the Medicaid expansion under the Affordable Care Act, millions of people, including people with disabilities, their family members, and their support professionals, have gained access to health coverage. Lives have been saved because people have had access to affordable, comprehensive health coverage. The tax credits and changes to health savings accounts proposed in this bill are not adequate to meet needs of people with intellectual and developmental disabilities or those with chronic health conditions. And we have no idea how much this approach will cost, or how many people will lose coverage as Congress is rushing this bill through before the budget experts can do the math on the price tag in dollars and impact on lives.

“The bottom line is that under this legislation, Medicaid will be decimated. People will lose vital benefits and services that support their basic human right to a life in the community. It will turn back the clock on the progress we have made as a society over the last 65 years. It’s morally reprehensible, and our nation cannot let this happen,” said Peter Berns, CEO of The Arc.

The Arc advocates for and serves people with intellectual and developmental disabilities (IDD), including Down syndrome, autism, Fetal Alcohol Spectrum Disorders, cerebral palsy and other diagnoses. The Arc has a network of over 650 chapters across the country promoting and protecting the human rights of people with IDD and actively supporting their full inclusion and participation in the community throughout their lifetimes and without regard to diagnosis.

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The Arc Applauds U.S. Supreme Court Decision Allowing Independent Disability Discrimination Claims Against School Districts

/in , /by The Arc

By: Shira Wakschlag, Director, Legal Advocacy & Associate General Counsel

The Arc applauds this decision which removes important barriers for students with disabilities seeking redress under the ADA and Section 504. The Arc has long advocated for the rights of students and others with intellectual and developmental disabilities to live their lives free from discrimination and with necessary accommodations, to which they are entitled under federal law. This decision is an important step in ensuring robust enforcement and protection of those rights.

In a major win for students with disabilities and their families, the U.S. Supreme Court issued a unanimous decision authored by Justice Elena Kagan on Wednesday in Fry v. Napoleon Community Schools that allows students to bring lawsuits directly under the Americans with Disabilities Act (ADA) and Section 504 of the Rehabilitation Act of 1973 (Section 504) without requesting an administrative hearing under the Individuals with Disabilities Education Act (IDEA) when their claim is not related to the adequacy of their education. The IDEA requires schools to provide specialized instruction and related services to eligible students to help them make progress on their educational goals. In contrast, the ADA and Section 504 prohibit discrimination of people with disabilities of all ages, both in and out of schools, in any public facility or federally funded program. This decision eliminates certain roadblocks that have prevented students from seeking relief directly in federal court when their claims involve disability discrimination under the ADA or Section 504, rather than their educational services and supports under the IDEA. Attorneys from The Arc attended oral arguments in this case before the U.S. Supreme Court last October.

Ehlena Fry, the plaintiff in the case, has cerebral palsy and uses a service dog, Wonder, to assist her with daily activities, such as “retrieving dropped items, helping her balance when she uses her walker, opening and closing doors, turning on and off lights, helping her take off her coat, [and] helping her transfer to and from the toilet.” When her parents asked the school to allow Ehlena to use Wonder in her kindergarten classroom, the school refused. Ehlena’s individualized education program (IEP) under the IDEA included use of a human aide, and the school argued that the aide met all of Ehlena’s “physical and academic needs,” rendering Wonder unnecessary. As a result, Ehlena’s parents removed her from the school and filed a disability discrimination complaint under the ADA and Section 504 with the U.S. Department of Education’s Office for Civil Rights (OCR).

OCR investigated and concluded that the school had discriminated against Ehlena by denying her use of her service dog, just as it would be discrimination to require a student who uses a wheelchair or a blind student to be carried or led around by a teacher or aide rather than permitting the student to use a guide dog or a cane. Following OCR’s investigation and findings, the school agreed to allow Ehlena to attend school with Wonder, but the family chose to enroll her in another school for fear of retaliation. The family also filed a lawsuit in federal court against the school system alleging disability discrimination and seeking monetary damages under the ADA and Section 504 for the school’s previous refusal to reasonably accommodate Ehlena’s use of her service animal. The lawsuit was dismissed by both the federal district court and the Sixth Circuit Court of Appeals who concluded that any claims that were educational in nature had to undergo the administrative hearing process in the IDEA before they could be filed in federal court.

In finding in favor of Ehlena and her family, the U.S. Supreme Court stated that students do not have to exhaust the administrative proceedings required in the IDEA when the essence of their claim is not about the IDEA’s free and appropriate public education (FAPE) requirement, as was the case here. The Court’s opinion offered some general guidance on how to identify whether the IDEA’s FAPE requirement is the essence of a lawsuit against a school, distinguishing between a student who uses a wheelchair suing a school for not having an accessible ramp (which is not about FAPE) and a student with a learning disability suing the school for not providing math tutoring (which is about FAPE). A concurring opinion from Justice Samuel Alito, joined by Justice Clarence Thomas, criticized this part of the Court’s guidance as creating confusion for the lower courts. In addition, because the Frys were not claiming that Ehlena was denied a FAPE under the IDEA, the Court explicitly chose not to address the question of whether students must exhaust the IDEA’s administrative hearing process when the complaint does allege a denial of FAPE but the specific remedy being requested is not available under the IDEA, such as monetary damages.

Though the decision in Fry leaves some questions unanswered, it does eliminate certain roadblocks that have prevented students from seeking relief directly in federal court when their claims involve disability discrimination under the ADA or Section 504, rather than their educational services and supports under the IDEA.

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The Arc Responds to House Republican Leadership Plans to Repeal the Affordable Care Act and Decimate the Medicaid Program

/in /by The Arc

Washington, DC – The Arc released the following statement following the release of the House Republicans’ new plan to repeal and replace the Affordable Care Act:

“Politicians are being very cavalier with peoples’ lives as they attempt to pay for the repeal of the Affordable Care Act by slashing Medicaid funding for states. Regardless of how this is packaged, it doesn’t change the reality that this proposal will have a dire impact on people with intellectual and developmental disabilities who rely on Medicaid and the Affordable Care Act for their health care, community supports, and as a way to live independently in their communities.

“This proposal suggests paying for the ACA repeal by changing the way Medicaid is funded. Giving states a choice between per capita caps and block grants would be devastating for people with disabilities and would also negatively impact already cash-strapped states. The talking points sugar coat it, but the reality is simple – less money would be available despite the fact the needs of people who rely on Medicaid have not decreased. Inevitably, what we will see is a decline in services for those reliant on Medicaid as the financial burden is passed on to states.

“A per capita cap is a financing tool that would result in significant cuts to Medicaid. As it works today, Federal Medicaid funding is based on the actual costs of providing services to Medicaid beneficiaries. Currently, as costs go up or numbers of people needing services increase, funding grows as well. A per capita cap or block grant would limit the Federal government’s payment to states with a preset formula that does not take into consideration growth in cost or need. The bottom line is that people will lose vital benefits and services that support their basic human right to a life in the community. That is a fact that elected officials need to understand and it is exactly why they must oppose this proposal.

“It is morally reprehensible to use Medicaid to pay for the repeal of the ACA. People who have serious health conditions and disabilities require more than the bare bones coverage being proposed. For those reliant on Medicaid, the ability to access appropriate quality care could mean the difference between life and death. There is too much at stake for us to stand by while politicians show complete disregard for the needs of low income constituents with disabilities, adults, older Americans, and children. We oppose the plan on the table and will work with Members of Congress to find a solution that actually takes into consideration the needs of people with intellectual and developmental disabilities,” said Peter Berns, CEO of the The Arc.

The Republican plan leaves many questions unanswered. It is not addressed whether insurance companies will be able to return to insurance policies that discriminate against people with disabilities and/or pre-existing conditions. It does not address whether insurance companies will be able to cap health care services or use health status to increase premiums. It does not address whether the critical health care services such as rehabilitative and habilitative devices and services, prescription drugs, mental health services, maternity coverage, and others will be available in the health plans. These protections, and many other critical provisions in the ACA, helped people with disabilities gain access to affordable and comprehensive health insurance. The meager solutions in the Republican plan that rely on high risk pools and limited tax credits are insufficient to help people with disabilities meet their healthcare needs

The Arc advocates for and serves people with intellectual and developmental disabilities (IDD), including Down syndrome, autism, Fetal Alcohol Spectrum Disorders, cerebral palsy and other diagnoses. The Arc has a network of over 650 chapters across the country promoting and protecting the human rights of people with IDD and actively supporting their full inclusion and participation in the community throughout their lifetimes and without regard to diagnosis.

Editor’s Note: The Arc is not an acronym; always refer to us as The Arc, not The ARC and never ARC. The Arc should be considered as a title or a phrase.

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Chapters of The Arc Are Getting Media Coverage on the ACA and Medicaid

/in /by The Arc

Members of Congress are constantly seeking ways to know what’s going on back home and what their constituents care about. One way their offices do this is by monitoring their local and state newspapers every day. When constituents get published or quoted, members of Congress and their staff pay attention.

Several chapters of The Arc have gotten such well-deserved attention in the last several weeks. They have clearly and persuasively articulated the concerns of thousands of people with intellectual and developmental disabilities (IDD) in their communities regarding the Affordable Care Act (ACA) and the Medicaid program.

David Thielen, CEO of The Arc of East Central Iowa, had a guest column printed in the Iowa Gazette at the end of December regarding the effects of block granting Medicaid. He made the point that there are only three main levers when costs are shifted to cash-strapped states under a block grant – reducing eligibility, limiting services and supports, and cutting reimbursement to providers. Three weeks later, he followed up with another guest column published in the Cedar Rapids Gazette explaining the tangible benefits of the ACA to individuals with IDD. These include improvements to long-term supports and services, tax credits to improve affordability of health insurance, banning discrimination based on pre-existing condition, ending annual and lifetime caps, and requiring plans to provide a comprehensive set of benefits including rehabilitative and habilitative services and devices.

Robert Hage, President of The Arc of New Jersey wrote a letter to the editor on January 15 that appeared in five local news outlets. He discussed the increased access to private insurance and Medicaid expansion provided by the ACA, and noted that “repeal may make a good soundbite – but what Americans with IDD need now is more than talk – they need action that keeps the promise of the ACA.”

Three other chapters were interviewed in news stories in January, including a television interview. Nancy Murray of The Arc of Greater Pittsburg at ACHIEVA was quoted in the Pittsburgh Post-Gazette regarding Medicaid block grants, “Right now, [this] is the No. 1 concern among disability advocates. We are scared to death.” In an article in the Wisconsin State Journal, Lisa Pugh of The Arc Wisconsin reinforced the few, stark options that states would face under a block grant, “Any form of a reduced funding structure from the federal government means likely one of three things: cuts to programs, cuts to benefits, or elimination of certain populations of people in Medicaid.”

Heather Denman, Executive Director of The Arc of Harrison and Rockingham, appeared in a segment on Virginia’s WHSV 3 to highlighted the ACA’s provisions on ending annual and lifetime caps on health insurance coverage, eliminating pre-existing condition discrimination, and providing funding for services outside of institutions. “The biggest piece is just taking something away and not having anything that is there to replace it and worrying about people who have preexisting conditions,” she stated.

The Arc is proud of its network of over 660 chapters across the country who work hard everyday advocating for people with IDD and their families. We are pleased to see more and more in the press as a result of this as informed and passionate spokespersons.