Independent financial living for the neurodiverse

What does it mean to be neurodiverse?

Neurodiversity refers to a uniquely functioning brain that works differently than that of the average person. There are over 600 neurodivergent conditions, including autism spectrum disorder, attention-deficit/hyperactivity disorder (ADHD) and obsessive-compulsive disorder (OCD).

Many neurodiverse people such as Olympic gold medalist Simone Biles and Oscar-winning actor Sir Anthony Hopkins are highly successful. Some speculate even Albert Einstein was neurodivergent.

What are some unique challenges?

Neurodiversity, depending on how it’s expressed, can make achieving financial independence difficult.

Some may have difficulty understanding credit card terms or how to balance a checkbook. Others may find social interactions such as applying for a job or loan disproportionately difficult. Both the capacity to manage financial affairs and the ability to work may be diminished as a result of these challenges. Those unable to attend college or work will need to rely on assistance from public and private sources.

Resources and workarounds

There are numerous ways the neurodiverse population can achieve financial independence. These range from government programs and legal structures to diversity-friendly employers.

Medicaid is one option available to those whose financial resources are limited. The program, which is both state and federally funded, provides health insurance and pays for services. Eligibility has both a financial and functional needs basis. Services may include in-home support through a special provision of the Medicaid Home and Community-Based Services (HCBS) waivers. These benefits will vary by state.

Supplemental Security Income (SSI) is another program designed for those that have limited financial resources and who meet the Social Security definition of disability. For adults, this means an inability to work. Even so, there are ways to work and retain these benefits.

Other state-specific entitlement programs for low-income households include things like the Supplemental Nutrition Assistance Program (SNAP), which helps pay for food, low-income housing and subsidies for public transit and child care.

For those who rely on these benefits, being disqualified is a concern given the low threshold for assets. A loss of government benefits can occur if countable resources – i.e., your cash, bank accounts, etc. – exceed $2,000. However, there are ways to set aside funds to cover the cost of caring for a person with a disability that won’t trigger a loss of public assistance, like a special needs trust.

Special needs trust

The assets in a special needs trust aren’t in the name of the beneficiary and therefore aren’t counted when determining eligibility for programs like SSI and Medicaid. The trust may provide for the special needs beneficiary for a lifetime and is managed by an appointed trustee. One popular strategy is to make the trust the named beneficiary of a life insurance policy, the death benefit from which is generally received free of U.S. federal income tax by the trust.

ABLE accounts

ABLE accounts are similar in some ways to the popular 529 college savings plan and offer tax-advantaged savings for individuals with disabilities. ABLE accounts are used to provide for qualified disability expenses and allow savings to grow without adversely affecting eligibility for Medicaid or SSI. Earnings grow tax-free, and withdrawals aren’t taxed if used for qualified expenses. Although contributions to ABLE accounts aren’t tax deductible at the U.S. federal level, some states may offer tax incentives for contributions made to the accounts.

The accounts have guidelines on eligibility, contribution limits and criteria limiting what is considered a qualified expense. Having said that, funds may be used for a wide variety of disability-related expenses, including education, housing, transportation and health care. As a result, the funds can help provide the financial means to maintain independence.

Individual circumstances may vary, and everyone should consider the potential complexities of setting up such accounts. Discussing these things with a tax professional and financial advisor can help ensure you’re doing what’s best for your needs.

The bottom line

Financial independence comes in many forms and signifies different things to different people. And for the neurodiverse, its meaning may encompass a broader sense of agency. It’s important to know that there are resources and support available and that individuals with neurodivergent conditions like autism spectrum disorder, ADHD or OCD can thrive independently.

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