Making ends meet is difficult for most families who care for children with disabilities. The practical costs of raising a child with learning disabilities, cognitive impairments, developmental delays or any of the numerous diagnoses included under the umbrella of “special needs” won’t be the same for every family. But by any estimation, caring for a child with disabilities costs far more than caring for one without disabilities.
The Average Cost To Raise A Child
Bracketing the question of special needs, how much a family spends on their child depends largely on income. Our latest government data, which is somewhat confusingly collected by the Department of Agriculture, suggests that a middle-income family will spend around $245,340 to raise a child born in 2013 to the age of 18.
That number, which is equal to $13,630 per year includes everything from baby food and diapers to education and housing. Logically, the number drops for low-income families, to about $176,550, and rises for higher-income families, to $407,820.
Raising A Child With Special Needs Costs More. How Much More?
When we look at families of children with special needs, these costs can easily quadruple, before even mentioning that, for many families of children with disabilities, there’s no assumption that the child will be able to live without care after reaching the age of majority. Thus lifetime costs of care are likely a better way of estimating the economic burden of raising a child with special needs. Little economic data, however, is available on this topic. Nuanced statistics, ones that take the nature of a child’s disability into account, are even more scarce.
Our best estimates come in relation to autism spectrum disorders. Autism Speaks estimates the lifetime cost of caring for a person with an autism spectrum disorder is around $1.4 million. For children with autism and an intellectual disability, that lifetime cost can nearly double, to $2.3 million.
Experts Estimate $7,625 To $8,742 More Per Week
In their 2007 review of the published literature, researchers from Canada reported that families of children with special needs, irrespective of the disability’s nature, could expect to pay up to $8,742 more dollars, per week, than families in the general population.
This number is remarkably consistent with the $7,625 identified in a 2012 study conducted by the Future of Children, a collaborative public policy think tank out of Princeton University and the Brookings Institution. The Future of Children number, it should be noted, takes into account far more than the direct cost to families of child care, including indirect costs, like reductions in wages, and the cost of public assistance programs as well.
Extrapolating from these numbers, we arrive at an extra $396,500 to $454,584 per year. Time, of course, is another resource that must be factored into the equation. On average, parents of children with special needs have been found to spend anywhere between 5 and 52 more hours per week on child care than other families. Naturally, this is time that cannot be spent earning income.
Financial Burdens Weigh Heavy On Families
At any one time, around 8.69 million American families are actively caring for children with special needs. 4 in 10 of these families experience significant financial burdens related to their child’s condition, according to researchers at Massachusetts General Hospital. In fact, there is troubling evidence that low-income families are more likely to have children with special needs. Worse, families that once lived above the poverty line often slide towards poverty after beginning to care for a child with disabilities.
Single-parent families are more likely to parent children with special needs than couples. With only one possible source of income beyond government assistance programs, single-parents are at an even greater disadvantage when they need to take time off work, or decline overtime, to care for their children. In one study of British families with severely disabled children, 12 out of 16 mothers were unable to return to work after their children were born. Likely, an increasing number of fathers are also asked to face the choice between their jobs and caring for their children, especially as gender roles tend toward equity.
Saving Money & Preparing For The Future
Taking care of day-to-day expenses can be enough of a struggle, but investing money early, if possible, is absolutely crucial.
John Nadworny, author of The Special Needs Planning Guide, suggests thinking about your financial situation as you would college tuition. The basic idea is to save as much as you can as often as you can, taking advantage of compound interest, but it’s just as important to keep that money in your own name. Having a lot of money in your child’s name can jeopardize necessary government benefits, like Social Security Income (SSI) and Medicaid, which are means-tested programs. SSI, for example, is only available to people with $2,000 or less in assets.
Establishing a special needs trust, which allows people with disabilities to benefit from savings while maintaining government benefits, can be a good option. When well-drafted, a special needs trust allows assets to be spent on “supplemental” purchases, ones that don’t overlap with services covered by the government. Thus children with special needs can benefit from the proceeds of investments and continue receiving SSI and Medicaid at the same time.
We strongly suggest contacting a financial planner, preferably a professional with experience helping families of children with special needs, to explore more of your options.