Supplemental Security Income (SSI) Benefits: Who Qualifies?
Low-income adults and children with disabilities who meet certain medical and financial standards are eligible to receive Supplemental Security Income (SSI), a monthly cash payment from the Social Security Administration (SSA). Many individuals with special needs are never able to work due to their disabilities and rely on this monthly cash benefit to provide for their most essential needs. An individual over 18 is considered disabled for SSI purposes if 1) he has a physical or mental condition which results in the inability engage in any substantial gainful activity, and 2) the condition can be expected to result in death or last for more than 12 months. SSA interprets substantial gainful activity as work that earns an individual more than $1,090.00 per month. A child is considered disabled if 1) he has a physical or mental condition that results in marked and severe functional limitations, and 2) the condition is expected to last for at least 12 months or result in death. Essentially, a child must have a disability that severely impacts his ability to function at the same level as his peers.
SSI financial eligibility for an adult with disabilities is based on a resource and income test. To qualify, an individual’s resources must be under $2,000.00. Resources are things that an individual owns, such as a bank account, stocks, and bonds. Certain resources, such as a house and a car, do not count towards the $2,000.00 limit. In addition to the limit on resources, monthly income must be under a certain amount. Income includes assets received on a monthly basis, such as wages, pension payments, annuity payments, interest, and food stamps. Unlike the resource test, the income test is a fairly complex calculation based on the amount and type of asset received. Income earned, such as wages, is treated differently than unearned income, such as pension payments and interest. The first $20.00 of all income is not counted, and the first $65.00 of income earned from working is not counted. Other government benefits such as food stamps and energy assistance are not counted in the income calculation.
A child with disabilities financially qualifies for SSI based on his own resources and income, as well as the income and resources of his parents. When the SSA looks at the resources of someone other than the individual applying for benefits, it is referred to as “deeming.” The deeming calculation from parent to child is very complex, and this article will not cover all aspects of the deeming rules.[1] In general, if a child is under age 18, the SSA will look to the resources and income of the parents. For married parents, SSA deems resources over $3,000.00 to the child, and for an unmarried parent, SSA deems resources over $2,000.00. Certain resources do not count towards the limit, such as a house, car, and pension funds of a parent (which includes Individual Retirement Accounts (IRAs)). Certain parental income is also not counted, such as food stamps, tax refunds, and irregular/infrequent income. The SSA publishes a table which sets forth the maximum monthly gross income that a household may have based on the number of children in the household and the type of income. However, the table is a guideline only.
If an individual with special needs is medically eligible for SSI but owns resources that put him over the resource limit of $2,000.00, he may transfer his assets to a Self-Funded Special Needs Trust in order to qualify for benefits. The Special Needs Trust allows the individual to become or remain eligible for resource based public benefits while maintaining assets to supplement his special needs. Commonly, a child with special needs applies for SSI benefits when he turns 18 due to his inability to work. If he received bonds throughout his childhood, the value of the bonds over $2,000.00 will render him ineligible for SSI. If he cashes out the bonds and transfers the cash to a special needs trust, he will be eligible for SSI (assuming he has no other resources and meets the income test), and may retain the cash in the trust to pay for things other than food and shelter payments. A trustee manages the trust assets and makes distributions for the benefit of the SSI recipient. Since SSI recipients automatically qualify for Medical Assistance benefits it becomes critical to retain SSI and Medical Assistance. Another common example concerns an SSI recipient who receives an inheritance or personal injury settlement. Instead of losing benefits and spending down the monies before reapplying, the recipient may transfer the assets to a Special Needs Trust to maintain SSI and Medical Assistance, and also retain the inheritance/personal injury proceeds to use for his special needs.
The SSA accepts applications for SSI benefits online at ssa.gov or in person at your local Social Security office. The applicant will be required to submit evidence of disability, such as medical records, and financial documents, such as bank statements, to demonstrate financial eligibility. It is important to submit the necessary documentation in a timely manner, as many applications are denied due to lack of appropriate documentation. Should you wish to further discuss eligibility for SSI benefits, please contact McAndrews Law Offices.
[1] For a detailed article on parent to child deeming rules for SSI benefits, please see the article “SSI Deeming: Parent to Child” by Crystal L. Welton, Esquire at www.mcandrewslaw.com.