Parent of a Disabled Adult Child Receiving Medicaid: “When Should I Claim Social Security?”
“When should I claim Social Security?” It’s a question as old as time for retirees.
Take your benefit early and you get cash in hand sooner. Wait until age 70 and your annual benefit is larger for the rest of your life. As with most retirement decisions, the right answer depends on your personal situation.
But for retirees with special needs children, there’s an often-overlooked factor that can have serious consequences: your Social Security benefit could flow through to your child, and it would increase cash in hand and possibly impact your child’s Medicaid eligibility. Many families don’t discover this until they’ve already lost benefits or are facing difficult choices.
Let’s level set.
In Virginia, Medicaid eligibility for developmentally disabled individuals is based on their earned income and assets. In 2026, an individual must earn no more than $2,982 per month and cannot have more than $2,000 in assets in their name.
So where do mom and dad’s Social Security checks come into play?
A Disabled Adult Child (DAC) receives 50% of a parent’s Social Security benefit once that parent begins claiming. Upon the parent’s death, that benefit increases to 75%, subject to a household maximum determined by the Social Security Administration. In some cases, if multiple family members are drawing benefits, those amounts may be reduced due to that household cap.
The Problem Pre-Virginia House Bill 37
Until recently, Virginia counted that 50% Social Security benefit as earned income to the disabled adult child for Medicaid developmental disability waiver eligibility purposes.
This created a real problem for working individuals with disabilities, and for those whose parents claimed Social Security benefits. The child’s Social Security benefit was added on top of their earned income when determining Medicaid eligibility.
For example:
- A child earns $1,500 per month from part-time work
- A parent receives $3,000 per month in Social Security
- The child receives $1,500 (50%) as a DAC benefit
That puts the child’s total countable income at $3,000 per month, pushing them over Virginia’s Medicaid limit.
At that point, families were often forced to make tough choices:
- Reduce the individual’s work hours (which employers may not accommodate)
- Remove them from the workforce entirely, stripping away independence and purpose
- Keep working but lose Medicaid, making essential supports like job coaches, day programs, and housing financially out of reach
What Changed: Passing of Virginia House Bill 37
Virginia has now taken a major permanent step forward.
With the passage of HB 37, the Commonwealth will remove a 2026 sunset provision and permanently disregard a portion of a parent’s Social Security benefit when determining Medicaid eligibility for a disabled adult child.
This is a significant shift.
By excluding some or all of that dependent Social Security income from Medicaid calculations, HB 37 helps ensure that:
- Disabled individuals can continue working without being penalized
- Families are less likely to lose Medicaid due to a parent claiming social security
- Adult children are better protected financially after a parent’s death
Why This Matters for Claiming Strategy
This change doesn’t eliminate the need for planning, but it does reduce one of the biggest risks families previously faced.
Before HB 37, the timing of a parent’s Social Security claim could unintentionally trigger a loss of Medicaid benefits for their child. Now, families have more flexibility and less pressure to delay or restructure claiming decisions solely for Medicaid purposes.
That said, every situation is still unique. Factors like total household benefits, work income, waiver services, and long-term care planning still matter. If a DAC has a social security benefit to gain, then the parents deferring their own benefit until 70 may not be the right decision.
The Bottom Line
HB 37 is a meaningful improvement that closes a long-standing gap in Virginia’s system. It allows families to make Social Security decisions with greater confidence and helps ensure that disabled individuals can maintain both employment and essential benefits. If you’re a parent of a disabled adult child, this is still an area where careful coordination between financial planning, benefits planning, and legal strategy is critical.
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