Supplemental Security Income (SSI)

What it is and how to make the most of it

Jan 19, 2022

You’ve probably been told you need to apply for SSI, or perhaps your child is already receiving it. I’m betting most, if not all, of you, are like I was. You don’t know much about what SSI is other than your child will get money every month as long as they are:

(1) over the age of 18,

(2) don’t work, and

(3) don’t have any money in their name.

Some of you may be saying “but wait, Eric, you’re not telling the full story”. If this is you, bravo - you’re right. I grossly oversimplified, and in the next couple of paragraphs, I will explain in more detail. This is meant to be a “primer”, so if you feel you have a solid grasp of SSI then don’t read any further.

Still here? Great, let’s dive in!

Qualifications

First and foremost let me lead by saying everything to follow is focused on those ages 18 and older. If you would like more information about SSI for minor children I encourage you to check out my YouTube video.

You can, and should, apply for SSI on the first day of the month your child turns 18. I encourage parents to wait until the child is 18 because that’s when the rules change. Prior to their 18th birthday, the child’s application will be evaluated using the parents’ income and assets. Once the child turns 18 the child is an “adult” and their case is considered using their assets and income.

The word “asset” can be tricky, especially if you don’t have a background in finance. Put simply, an asset is something of value that you own. In the eyes of the Social Security Administration (SSA), it will include a house, car, bank account, investments, cash value life insurance, etc. When applying for SSI you are allowed to have a house and (1) car without penalty. All other assets must equal less than $2,000 if you are single ($3,000 if married).

Income doesn’t have the same clearly defined limit. It’s possible for you to work and still receive SSI. The Social Security Administration considers two types of income - earned and unearned. SSI is reduced dollar for dollar by unearned income and has an exclusion for the first $20. An easy way to think of it - if you got money but you didn’t work it is unearned income.Want to know more about the types of unearned income? Here is a link to the Code of Federal Regulations. This spells out what is considered unearned income.

Earned income follows different rules. SSI will be reduced by $1 for every $2 earned. There is also an exclusion to the first $65 earned, for a total of $85 of earned income excluded. Because the government wants people to become self-sufficient, they provide incentives to workers and students. Here’s a link to the complete list of Social Security’s income exclusions (it’s long).

Benefits

In 2022 the Federal SSI benefit amount is $841/month. Although almost all states will provide a supplement (the exceptions are Arizona, Mississippi, North Dakota, and West Virginia), it will usually go unnoticed. This is because many of the states ONLY pay supplements for individuals living in approved residences. When someone lives in an approved residence the Federal SSI is reduced to $30/mth, by law. This is all the individual will receive. The rest of the money goes to the agency providing the housing to help offset the cost of care.

In addition to SSI being reduced for earned/unearned income or living in a residential facility, you could have your SSI reduced by up to 1/3 if someone is supporting you. This is called “In-Kind Support and Maintenance” or “ISM”. This is common when a child is still living with their parents because parents will often not require the child to pay for room and board.

Provided you don’t live in Connecticut, Hawaii, Illinois, Minnesota, Missouri, New Hampshire, North Dakota, Ohio, Oklahoma, or Virginia you will be automatically enrolled in Medicaid when you are approved for SSI. Medicaid will be a future topic, for now, all I’ll say is it provides health insurance.

Interested in figuring out how much SSI you may receive? You can get your calculator here. If you’d like more information about using the calculator, here’s an explainer video. I also offer a free rental agreement template if you’re thinking of charging your child rent to increase your odds of getting their maximum benefit.

This concludes the first issue of Waypoints. On the 4th Thursday of every month, from 7 - 8 pm EST, subscribers will also have the opportunity for live Q & A. Here’s the link to January’s. I look forward to “seeing” you. Have feedback or a topic you’d like me to cover? Send me an email, eric@specialneedsnavigator.us, or post a comment.