Perhaps this may have happened to you. Your child receives “XYZ” diagnosis, and you hear a friend tell you, “You should get SSI!” Does that sound familiar? Your next few thoughts are probably: What is SSI? What do I need to do to get it? What can I do with it? Are there things that I need to know about SSI? These questions are asked again and again on social media and the responses may not all be accurate.
Since misinformation is as bad as no information, I will share what I have learned in the past 16 years as a Special Care Planner about SSI and how it works. I will refer to the POMS or Program Operations Manual System. This is a primary source of information used by Social Security employees to process claims for Social Security benefits. You can also refer to the Social Security Handbook which is written in plain language for use by the public.
What is Supplemental Security Income?
Supplemental Security Income (SSI) is a Federal income supplement program funded by general tax revenues (not Social Security taxes):
- It is designed to help aged, blind, and disabled people, who have little or no income; and
- It provides cash to meet basic needs for food, clothing, and shelter.
- The monthly rate for 2022 is $824.
Who qualifies for SSI?
For a child under 18
To be eligible for SSI benefits, a child must be either blind or disabled. There are two sets of eligibility criteria for receiving SSI: (1) medical criteria about the child’s impairment or combination of impairments; and (2) financial criteria, based on income and resources of the child and family.
Medical Criteria
A child is considered disabled for SSI purposes if:
- He or she has a medically determinable physical or mental impairment (or combination of impairments); and
- The impairment(s) result in marked and sever functional limitations; and
- The impairment(s) has lasted (or is expected to last) for at least one year or result in death.
The Disability Determination Services (DDS), a State agency, obtains the necessary information and makes the medical determination in childhood disability claims for SSA, using SSA rules. A DDS team, consisting of a disability examiner and a medical or psychological consultant, makes the disability determination.
To meet the statutory definition of disability, a child’s impairment(s) must be from anatomical, physiological, or psychological abnormalities that are demonstrable by medically acceptable clinical and laboratory diagnostic techniques. SSA requires objective medical evidence (signs, laboratory findings, or both). SSA needs evidence from acceptable medical sources to establish whether a child has a medically determinable impairment(s). This is where your child’s physician provides their diagnosis and findings.
Financial Criteria
A very important concept to understand when dealing with SSI for a child under 18 is deeming. If a child is under age 18, not married, and lives at home with parent(s) who do not receive SSI benefits, SSA may consider a portion of the parents’ income and resources as if they were available to the child. They may also count a portion of a stepparent’s income and resources if a child lives with both a parent and stepparent. This process is called “deeming.” Deeming ends on the date of the child’s 18th birthday.
The amount of income that or lack of income that would qualify for SSI is beyond the scope of this article. Allowances are made for the size of your family. I have also heard of SSA deeming part of an older sibling’s earnings if under age 18 and still living at home.
For a child age 18 or older
Eligibility for an individual age 18 or older is similar to under age 18 except the definitions are a little bit different.
Medical Criteria
An individual must not be able to engage in any substantial gainful activity (SGA) because of a medically determinable physical or mental impairment(s) that is either:
- Expected to result in death.
- Has lasted or is expected to last for a continuous period of at least 12 months.
You can find more information about what is meant by Substantial Gainful Activity (SGA) at www.ssa.gov.
Financial Criteria
This is a two-part qualification: limited income and limited resources.
What does “limited income” include?
Income for the purposes of SSI includes:
- Money you earn from work;
- Money you receive from other sources, such as Social Security benefits, workers compensation, unemployment benefits, the Department of Veterans Affairs, friends or relatives;
- Free food or shelter;
- And child support payments.
The calculations for the limited income limits can also be found at www.ssa.gov. Most of our special needs children that work on a part-time basis will meet these limits.
What are “limited resources”
Resources, for the purposes of SSI, are things you own such as:
- Cash;
- Bank accounts;
- Stocks, mutual funds, and U.S. savings bonds;
- Land;
- Vehicles;
- Personal property;
- Life insurance; and
- Anything else you own that could be converted to cash and used for food or shelter.
The SSI limits for resources that we do count are:
Individual/Child — $2000
Couple — $3000
What issues should we be aware of?
1. Representative Payee
This is a person that is responsible for receiving and managing funds from Social Security when a recipient is not able to manage it themselves. This includes any child or incompetent adult. As the representative payee, you will be responsible to report to the SSA any changes in circumstances that could affect your child’s eligibility to benefits (income, resources, change of address, living arrangements, etc.) Something as innocuous as a parent’s year-end bonus may cause a temporary loss or reduction of SSI. If this is not reported and is found later, the difference in SSI payments will be required to be reimbursed to SSA. This can be a pain.
2. Inheritance
An inheritance of any amount can be disastrous for a person on government benefits if it causes the resource amount (savings, property, etc.) to exceed $2,000. That is not very much! I’ve seen several times where a long-lost relative happens to include a SSI recipient as a beneficiary of a mere $15,000. It doesn’t seem to be much in today’s world, but it could cost the individual much more than $15,000 in lost government benefits. This is where proper planning is so important. Assume you have a disabled child on government benefits. Assume that you have two other children. At your death if you have not done any planning, the state will divide your estate and each child will receive 1/3. A fair way to handle it. Assuming that your estate is anything over $6,000 your disabled child just lost benefits until he/she can spenddown the inheritance. The simplest way to solve this potential problem is using a 3rd Party Special Needs trust. All inheritances can be put into a 3rd Party SNT and be used for the benefit of your special needs child without affecting their SSI payment or Medicaid coverage or any of the other government benefits.
3. Child Support Payments
If you have a child over 18 that is receiving child support whether court-mandated or voluntary, these payments are considered income to the child reducing or eliminating SSI payments and possibly Medicaid coverage. According to POMS, if the child support payments are irrevocably assigned to a 1st Party Special Needs trust (also known as a self-settled SNT or -d4A trust). The trustee can spend it each month as child support payments would be paid but by having it go through the 1st Party SNT, the government benefits will not be affected.