South Dakota Medicaid Income Limit for DD Waivers — 300% SSI Rule

The 300 Percent SSI Rule in South Dakota

South Dakota's two developmental disability waivers — CHOICES and Family Support 360 — use a specific income threshold to determine financial eligibility: 300 percent of the federal Supplemental Security Income (SSI) benefit rate. For 2026, the individual SSI rate is $994 per month, which puts the Medicaid long-term care income cap at $2,982 per month.

This is not the same income limit that applies to regular Medicaid. The 300% SSI rule is used for the HCBS waiver eligibility described here; the services available depend on the waiver.

What Counts as Income

The Division of Developmental Disabilities evaluates only the applicant's own income, not the family's household income. For a young adult turning 18 who is applying for CHOICES or Family Support 360, this distinction matters enormously.

Income that counts toward the $2,982 monthly cap includes:

• SSI payments (currently up to $994/month for an individual)
• Any earned wages, after applicable exclusions
• Disabled Adult Child (DAC) benefits from Social Security
• Other unearned income like interest or dividends

Income that does not count toward the waiver cap:

• Parental earnings — these are waived entirely for adult applicants

Separately, in-kind contributions of food no longer reduce SSI under the SSA's In-Kind Support and Maintenance rules; the SSA eliminated food from those calculations on September 30, 2024.

Most transition-age adults with developmental disabilities fall well under the $2,982 threshold. A young adult receiving only SSI at $994/month has nearly $2,000 of headroom before any employment earnings would push them toward the cap.

The Asset Limit

Alongside income, the applicant's countable resources cannot exceed $2,000. Countable resources include cash, checking and savings accounts, stocks, and bonds.

Critical exclusions that do not count toward the $2,000 limit:

• The first $100,000 held in an ABLE account
• A primary residence
• One vehicle
• Assets held in a properly drafted Special Needs Trust
• Personal property and household goods

The ABLE account exclusion is particularly relevant for transition planning. South Dakota does not operate its own state ABLE program, but state law permits residents to open accounts in any national plan that accepts out-of-state participants. For 2026, the annual ABLE contribution limit is $20,000 per year.

CHOICES vs. Family Support 360 — Same Financial Rules

Both waivers apply the same $2,982 monthly income cap and $2,000 asset limit. The difference between them is the service model, not the eligibility criteria.

CHOICES provides more intensive supports: residential habilitation, group supported employment, day services, and career exploration. Participants work with an independent case manager and receive services through regional Community Support Providers.

Family Support 360 is self-directed, designed for individuals living with their families or independently. Services include respite care, personal care, companion care, and home modifications. Families coordinate scheduling through Consumer Direct Care Network South Dakota, the state's fiscal agent.

Both waivers require clinical eligibility in addition to financial eligibility — the applicant must meet an Intermediate Care Facility for Individuals with Intellectual Disabilities (ICF/IID) level of care, evaluated through the ICAP assessment.

When the Income Limit Becomes an Issue

For most families entering the waiver system at age 18, the income cap is not the barrier. The more immediate concern is the interest list — South Dakota maintains a waitlist of approximately 185 individuals for funded waiver slots, with wait times ranging from one to two years.

The income limit becomes relevant in two scenarios:

Working adults: If a young adult in supported employment earns $1,600/month and receives SSI of $994/month (reduced by earnings), their total countable income needs careful monitoring. The Student Earned Income Exclusion — which shelters up to $2,410/month in earnings for students under 22 — applies to SSI calculations but does not directly affect the waiver income test.

DAC beneficiaries: A young adult receiving Disabled Adult Child benefits on a parent's Social Security record may receive more than a standard SSI payment. If a parent had high lifetime earnings, the DAC benefit could approach or exceed the $2,982 monthly cap. Families in this situation should consult with a benefits counselor before applying.

What to Do Before Applying

Start planning during the student's 17th year; contact Dakota at Home at age 18 at 1-833-663-9673 (Option 2) to open an inquiry. The DDD must issue a formal eligibility decision within 45 days of receiving a completed application, but the interest list wait begins only after eligibility is confirmed.

The South Dakota IEP Transition to Adulthood Guide includes a waiver comparison worksheet that walks through the financial eligibility calculation, an application timeline tracker, and the adult services handoff checklist that coordinates SSI, Medicaid, and waiver applications so nothing falls through the gap between school exit and adult service enrollment.

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