Spring 2024:
The MLO Minute: “Breaking News: Food Will No Longer Be Counted as ISM for Purposes of SSI”
By Lesley Mehalick, J.D., LL.M., Supervising Partner of The Estates and Trusts Department —
On March 27th, 2024, Social Security announced a significant change to the way that it will calculate In-Kind Support and Maintenance (ISM), which is a type of income for purposes of SSI. Specifically, Social Security provided that effective September 30, 2024, food will no longer count as ISM. Thus, ISM will only extend to shelter costs now. Shelter includes rent or mortgage payments (including property insurance required by the mortgage company), real estate taxes, and essential utilities, including electric, gas, water, heat, trash, and sewer. ISM used to include clothing as well, but clothing was removed from the definition in 2005. The exclusion of food from the definition of ISM will greatly simplify the ISM calculation as families can now focus only on the shelter expenses. An SSI recipient will no longer have to report food assistance received from others, and the elimination of food from the ISM calculation should reduce administrative efforts at the Social Security Administration.
An individual’s SSI payment is supposed to be used for and cover their shelter expenses. Should an SSI recipient have their shelter paid for by another person, a trust, or if they are living rent-free in a parent’s home, then Social Security counts that as In-Kind Support and Maintenance (ISM) to the SSI recipient. The effect of the ISM is that the individual’s SSI payment will be reduced by an amount that is 1/3 of the then-current maximum SSI benefit rate, plus $20.00. This reduction in SSI is capped at this amount, regardless of the amount of shelter expenses that are actually paid. Ways to avoid this reduction include charging fair market value rent to a disabled adult with whom you live, or funding an ABLE account and having that account pay the shelter expenses instead of the trust or family member making the payment. If you would like to discuss these options in greater detail, please contact our office to consult with an attorney.
