Regular Guest Blogger and Financial Adviser Allan Cuthbert specialises in financial planning for in the area of special needs and disabilities and sets out in practical terms what families need to consider for sound financial planning.
A question I have been asked so many times: Is there a Special Needs Bank Account? the answer is, Yes there is.
Most parents find it very complicated to open, operate and manage a bank account for someone with special needs and parents eventually run in to numerous issues.
I’ve had families tell me shocking stories such as, one family where their son who has an intellectual disability had his bank account cleaned out and his parents were unaware. Banks have also refused to open up accounts for many of my families as they state that the person with special needs does not understand the terms and conditions. I ask who does!
When speaking to parent I find most have opened joint accounts with their children but this is only a temporary fix and will cause issues when the parent passes away as this account will have to be frozen and goes back in to the Estate.
An even bigger issue is when the Department of Social Protection is carrying out a Means Tested assessment then all money in a joint bank account can be allocated to either party.
Financial Wellbeing Solution
A Special Needs Bank Account allows both parents to legally manage the account on behalf of their child. Having full access to the account then parents can make decision on their own or jointly with their child, depending on his/her ability to manage their own financial affairs.
In to this account you should direct your child’s Domiciliary Care Allowance or Disability Allowance. I recommend keeping all other entitlement out of the account such as Carer’s Allowance, Respite Care Grant and having those payments put in to the parents’ personal bank accounts.
From the Special Needs Bank Account you should pay for your child medical needs such as any private therapies, equipment, health insurance, hospital, doctors and consultant visits. You should also use this account to pay for your child’s personal needs such as phone, hobbies, clothes, entertainment and eat out.
Keep you bank statements & do not shred them at any stage. The statements will be used when applying for entitlements and will show proof of the financial position of your child.
To open the account
A parent needs to complete the application form on behalf of their child with special needs and produce two forms of identification (passport, driver’s license, proof of address, etc). The application form also needs to be signed by your child’s doctor or a doctor’s certificate can also be attached to provide evidence of their disability.
When opening the account you should also request a laser card, cheque book, standing order forms and direct debit facilities. You must also ask for DIRT exemption to be applied to the account. This will prevent the government taking 41% as a tax on any interest achieve on the account.
Contact your local bank and they can guide you through the process. If you are one of the many families that already have a Financial Wellbeing Trust Plan then I will be personally contact you soon to supply you with the specific forms and guide you through the process.
Fund Your Special Child’s Trust From Entitlements Today – For A Brighter Tomorrow
This article was prepared by Allan Cuthbert, a Special Needs Trust Planner. If you have a Trust planning question, feel free to email firstname.lastname@example.org or call 021 482 3635. To see why all parents must set up a Special Needs Trust, check out www.financialwellbeing.ie