Here are some guidelines on planning finances for parents of children with special needs -
1) Higher Savings and Investments – A differently abled person may have restrictions which affect his earning capability. The parents should save as much as possible so that there is a sizeable emergency fund and more money can be invested which can give more returns. The emergency fund should consider the health status of the child in future as well. If there are chances that it might deteriorate, then the savings must be appropriately higher. Investments should be diversified and such that optimum returns are delivered. At the same time, the risk should be managed well.
"Build a secure financial future for your child with special needs using smart investments, trust, tax breaks and insurance"
3) Insurance – It is important to insure the parents' lives or the primary caregiver's life and opt for a medical cover for the child.
The caregiver/parents can purchase a term policy with the child nominated to receive the proceeds. A life insurance cover with monthly payouts or endowment policy can be purchased so that the money received can be allotted to the child/ trust. There are some insurance schemes that covers medical expenses for disabled people. As a parent, you should take a medical cover for your child. Some insurance policies are Nirmaya and Swavlamban (New India Assurance). Please check the terms and conditions before buying the policy.
4) Taxation – Tax breaks are given to persons who support disabled persons.
As per Section 80DD of the Income Tax -
- If you have a family member with 40% to 79% of disability, you get additional Rs. 75,000 deduction.
- If you have a family member with greater than 80% of disability, you get additional Rs. 1,25,000 deduction.
The relevant documentation like medical certificate etc. should be in place to claim the deduction.
5) Schemes and Subsidies – There are some entitlements available for persons with disabilities. You should find out the one suited for you and utilize it. Here are some of them -
- Scheme of National Scholarship for Persons with Disabilities – Scholarship is given for some professional and technical courses that have a duration more than a year. If the student has autism / cerebral palsy / mental retardation / multiple disabilities, the scholarship is provided from Class 9.
- Rajiv Gandhi Fellowship scheme – This scheme provides scholarships to persons with disabilities to pursue higher education such as M Phil / Ph D provided base requirements are fulfilled.
- Medical Details - Details of doctor and doctor visits, therapy sessions, medicines and the dosage. The medical history and current medical conditions should be recorded. Allergies should be specified.
- Habits - Diet plan, Likes/Dislikes, daily routine, strengths/weaknesses and wishes.
- Contact Details – Contact information of doctors, lawyers, NGOs, persons whom your child shares a bond and lawyers.