Supplemental Security Income (SSI) is a federal public assistance program that offers financial support to people who are disabled and living on limited resources. SSI provides monthly payments to adults and children with a disability or blindness, and to adults aged 65 and older, who have limited income and resources. Individuals that apply for and are receiving SSI must meet SSA eligibility requirements, including income and resource limits.
In addition to the resource limitation of $2,000 plus certain exempt assets, a disabled individual who receives SSI is limited to the amount of income he or she can receive each month. For 2024, a single SSI recipient can receive a maximum payment of $943 per month. However, the receipt of income will reduce an individual’s monthly SSI award. If their monthly income exceeds their monthly SSI award, they are at risk of losing all or part of their benefit. In some cases, they could lose their ability to qualify for the program altogether.
Income for SSI purposes is not taxable income. SSI has several classes of income. Each type of income has its own rules on how it reduces an individual’s monthly SSI benefit.
Earned income includes wages, net earnings from self-employment, certain royalties and honoraria, and money from sheltered workshops.
Unearned income includes all income that a person doesn’t earn. This includes Social Security benefits, workers’ compensation, certain veterans’ compensation or pension payments, unemployment, pensions, support and maintenance in kind, annuities, rent, interest income, dividends, and cash from friends and relatives.
In-Kind Support and Maintenance (ISM) is a type of income that occurs when payments are made by a third party for food, rent, mortgage payments, condo dues, gas, electricity, water, sewer, and garbage collection. This type of income is any payment from a third party, including a Special Needs Trust for food and shelter expenses. Effective September 30, 2024, the SSA will no longer count “food” as ISM. After September 30, 2024, only shelter expenses paid by a third party will be treated as ISM.
When a third party previously paid for food and shelter expenses (ISM), the recipient’s SSI benefit was s reduced by up to one-third. Under the new rules the SSI recipient is no longer required to report food purchased by a third party.
The elimination of food as ISM is a major victory for all SSI recipients. A trustee that is administering a special needs trust for an individual receiving SSI can now pay for food directly without it affecting the beneficiary’s SSI benefit.
If you have any questions about these changes or would like to learn more, please contact us today.