• Tricia Au Zhi Zhng

Financial Planning for Parents with Autism Children

Written by F.D.


Introduction

Parents today are aware of the ever changing economic situation and they need to budget within their capability in order to fund their daily routines. Their priorities become even more important when they have children with Autism as they need to fund additional money towards improving the children’s overall development. According to a research, the average cost incurred by families with Autism Spectrum Disorder children in 2014 is RM36,728.43. To put that into perspective, RM21,928.58 is for the developmental costs which are expenditures for special needs education, special diet, supplementary diet and autism child care services. Meanwhile, the remaining RM14,799.85 is for direct costs which are all expenditures related to the medical treatment associated to Autism directly. From the direct costs, RM9,021.01 is allocated to all expenditures directly related to medical treatment sources in treating or preventing condition complication like outpatient services, warded fees, diagnoses, medical treatment, surgery, medication and rehabilitation services. The remainder of RM5,770.84 is for non-medical direct cost which involves the transportation and accommodation cost related to the usage of medical services facilities. This may seem like a lot to take in, hence good financial planning and strategy need to be taken into consideration.


Planning for the Child’s Financial Plan


First of all, parents should not be rushed into making financial decisions in getting their children’s treatment done immediately. Before the early diagnosis of their children can be done, proper research should be carried out. For instance, parents should recommend finding a support system like a parent support group so that they can collect information on what would be the best option for their child in their current financial state. Aside from support groups that can be found from the internet or Facebook, parents can seek out hospitals or their pediatrician’s opinion as well. Once the information is gathered, parents would be able to gauge which program or services would be best for their child and is still affordable for the parents in the long run.


Another way to ensure proper financial planning is to build cash reserves. Cash reserves is an emergency fund used by families to finance any unexpected fees. Unexpected expenses could include medical therapies, babysitters, legal and financial services, routine costs such as home modifications or specialized daycare and other unpredictable expenses like natural disasters that affect the family directly. Therefore, having excess cash savings in handling unplanned expenses is critical in making difficult financial decisions due to taking on debt or forced account reallocation.


Build a Timeline


Once proper research has been done, the next step would be to build a timeline of the estimated expenses that would be needed for the therapy services. To build the timeline, parents have to first focus on the family’s current situation. From there, parents can estimate the amount needed throughout the phases of their child’s life. For example, parents can divide the budget by planning the child’s treatment plan according to the child’s needs, taking into consideration which program and services should be prioritized first.


After that, they can list all the financial charges ranging from household income to the cost of medical expenses and therapy. Firstly parents can look into the monthly costs they need to pay on a day to day basis which are recurring payments like mortgage, car insurance, groceries, eating out and gas. After that, there are supplemental needs for their children which are necessary for assisting in treating their children’s disabilities. For example, medication, therapy, medical supplies and others connected with the children’s needs. Comparing the expenses and the income that the parents are earning would give a clearer picture when planning the finances.


Once that is done, parents then need to find any potential gaps which could likely be weaknesses in the planning of money or other types of support for their children. Some examples for these gaps can be caused by the lack of savings, premature passing of spouse or difficulty of securing funds from the federal. To fill those gaps, parents should utilize necessary financial safety nets like creating an emergency fund, or downsizing expensive items like purchasing a budget car rather than a sedan for improving cash flow. The recommended emergency fund is worth 3 to 6 months of monthly expenses. Finally, always keep up to date on reviewing timelines in sticking with the families’ goals and adjust on the timeline if something unexpected happens.


Long Term Financial Planning


As everyone knows, changes in the fees for treatments is inevitable. With all of the unexpected expenses and all the changes in the structures of expenses, especially the therapy fees, parents need to plan on how they are able to invest on their long-term expenses. Thus, families have to be encouraged to address some financial adjustments when there are inevitable changes to the structures of the fees of the therapies. Once the families are prepared to discuss the financial adjustments, a qualified attorney needs to be hired focusing on special needs planning. An attorney is necessary in drafting a will to name guardians for their children and talk through a family trust in assets handling in order to plan on how they are able to finance their autistic children on their therapies and their daily lives. For instance, the percentage of funding for their childrens’ Early Intervention Program, Speech Therapy, Occupational Therapy and their daily necessities as well as long term planning for their school and university education.


If their children may qualify for the Supplemental Security Income or other supports, consider the special needs trust to preserve their eligibility. A special needs trust is a special type of legal document setting up benefits to anyone with disabilities. Those who qualified and received the special needs trust are still eligible to be qualified to receive the government benefits. The trust is often necessary as anything other than a modest gift to disabled individuals could lead to autistic individuals being left out from government and state assistance because they exceed the resource and income eligibility limits.


The special needs trust can be divided into 2, First-Party Special Needs Trusts and Third-Party Special Needs Trusts. First-Party Special Needs Trusts is a trust funded by the beneficiaries’ assets. For instance, once money is deposited to the trust, the money won’t be considered as an asset or income thus allowing the children to be eligible for the government and state benefits. There are two types of first party trusts available. There are the first-party stand-alone trusts which can be established by a parent, grandparent, guardian, or court and must be drafted by the attorney and approved by the court which is quite expensive as well as a qualified trustee or an institutional trustee in managing the trusts. Then, there are pooled special needs trusts are more flexible sub-trusts the children can manage, if capable, in proportion to their share along with other individuals, such as a parent, grandparent, or guardian that are created and managed by non-profit organizations by combining the children’s assets with a master’s special needs trust.


Meanwhile, the Third-Party Special Needs Trusts are established by a third party which other family members and friends are able to contribute to the trust. The trust is under the name of the grantor who created the trust owning all of any assets in the fund. Thus making the trust safe from any creditors and an appointed trustee is free to invest the funds under a financial advisor. A good example of a third-party special needs trust here in Malaysia is from Rockwills which they provide their own special needs trust. They have a special third-party special needs trust, UCare Junior, where they give protection to the beneficiaries from the trust they provide for the parents’ children in planning ahead for their special child’s health, maintenance and education.


Conclusion


In conclusion, autistic children required a sufficient fraction of the family’s financial portions in order to pay for their developmental needs. Short term and long term financial planning holds the key in ensuring that the parents are able to spend and invest on the appropriate therapies for their child. Thus, ensuring the family can have a peace of mind and free from any debts or obligations.


Resources:


Special Needs Trusts Available in Malaysia:

Financial Costs for Families with Autism Children in Malaysia:

References:

  1. Kamaralzaman, S., Hasnah, T., Mohamed, S., Nazmin, A. (2018). The Economic Burden of Families with Autism Spectrum Disorders (ASD) Children in Malaysia. Journal of International Conference on Special Education in Southeast Asia Region (ICSAR); 2 (1), 71 - 77.

  2. Mahadeva, S., Yadav, H., Everett, S. M. (2012). Economic impact of dyspepsia in rural and urban Malaysia: a population-based study. Journal of Neurogastroenterology and Motility; 18(1), 43 - 57

  3. Rice, D. P. (1966). Estimating the cost of illness. Washington, D.C.: US Government Printing Office)

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