Stebler & Sulak, PLLC
Supplemental Security Income (SSI)
Our firm provides assistance to individuals who need advice regarding the effect of income and resources on eligibility for SSI. While we do not typically assist clients with the actual SSI application process, we can help clients understand the financial planning that may be required for eligibility, including (when appropriate) establishing special needs trusts to manage assets. Our firm also assists clients who have an existing special needs trust that the Social Security Administration has determined to be a countable resource. In many cases, we are able to appeal the Social Security Administration's decision, or work to modify the existing trust to ensure that it does not continue to interfere with SSI eligibility.
What is SSI?
Supplemental Security Income (SSI) is a small cash benefit provided by the federal government for certain persons who have very limited income and resources and are disabled. The maximum SSI benefit payable in 2019 is $771.00 per month for an individual, or $1,157.00 for an eligible married couple (if both spouses qualify). SSI is administered by the Social Security Administration, and not the State of Texas.
Who qualifies for SSI?
To qualify for SSI, you must be either (1) over the age of 65, (2) blind, or (3) disabled, AND, you have limited resources and income. You generally must also be a U.S. citizen, although there are a few exceptions for legal resident aliens who are not yet citizens.
What are the resource limits for SSI?
An individual must have less than $2,000.00 in “countable resources” in order to qualify for any amount of SSI. A couple must have less than $3,000.00 in “countable resources” in order to qualify for SSI. There are a few limited types of assets or resources that are not considered “countable,” including a home that serves as the primary residence or homestead, one vehicle, and certain pre-need burial plans. If a person with disabilities is under the age of 65 and has too many resources, there is sometimes the option of creating a first-party special needs trust to hold those excess resources, which would permit that person to qualify for SSI. This is discussed more below.
If I receive some income, but I am disabled, can I still qualify for SSI?
The type of income that a person with disabilities receives determines the effect of that income on eligibility for SSI. If the income is “unearned income,” which is not earned from working, then there is generally a dollar-for-dollar reduction on the SSI benefit. For example, if a family member gives the person $500 per month, then the benefit will generally be reduced from $771.00 to $271.00 per month. By comparison, a person with disabilities can work and make a modest amount of income (generally less than $1,220.00 per month), and still qualify for some SSI. The calculations of the amount of an SSI benefit are complex, but a general rule to keep in mind is that for “earned income,” the first $65, plus one-half of the remainder, is not counted. In addition, there is a $20 exclusion for income generally, whether earned or unearned. After applying those exclusions, if the person applying for SSI still has less than $771.00 in countable income, then that person will be eligible for at least $1 of SSI.
What if I have both earned income and unearned income each month?
As mentioned above, the Social Security Administration will look at both earned and unearned income to determine whether you might be eligible for SSI. The SSA will first take your total unearned income and subtract $20. That amount will be your total countable unearned income. The SSA will then take your earned income and subtract $65.00, and then divide the resulting amount by two. The amount resulting from that equation will be your total countable earned income. The SSA will then add your total countable unearned income, plus your total countable earned income, to reach the sum of your total countable income. The total countable income for an individual is then subtracted from the maximum $771.00 monthly benefit. The resulting amount (if it is a positive number) is the amount of your SSI monthly benefit. If the resulting amount is zero or a negative number (in other words, if your countable income is $771 per month or more), then you are not eligible for SSI.
My adult disabled child lives with me in my home, and Social Security is decreasing her SSI payment some as a result. Why is that happening?
When an SSI recipient receives food and/or shelter from a third party, without paying for it, the SSI recipient is considered to have received “in-kind support and maintenance” (ISM) under the Social Security rules. In any month where the SSI recipient receives ISM, his or her SSI payment is generally reduced by an amount determined by the “presumed maximum value” (PMV) rule. The PMV rule presumes that the value of what was received, in terms of food and shelter, is one-third of the maximum SSI benefit plus $20 (in 2019, this means $750 divided by 3 = $257, plus $20 = $277.00). So, in 2019, an adult disabled child living in a parent’s home, without paying his or her pro rata share of rent and household expenses, will have his or her SSI benefit reduced by $277.00. If the child is receiving the maximum SSI benefit ($771 in 2019), that results in a reduction in the SSI monthly payment by $277, to $494. This presumption can be rebutted by proving that the value of what was received was less than the PMV amount, or by proving that the child paid for his or her pro rata share of food and shelter expenses in the parent’s home.
Why is SSI important?
SSI is a very modest amount of cash assistance in most cases. In Texas, and most other states, there is no state supplement paid to SSI recipients. However, the real significance for many people with disabilities is that in Texas (and more than 30 other states), if you qualify for at least $1 of SSI, you are automatically eligible for Medicaid. Medicaid provides comprehensive medical care (and in some cases, support services) to people with disabilities.
How do I apply for SSI?
In most cases, you do not need the assistance of an attorney to apply for SSI. You can apply in the following ways:
By phone: Call the Social Security Administration anytime between 7 a.m. and 7 p.m., Monday through Friday, at (800) 772-1213 (or TTY (800) 325-0778). Expect to be on hold for quite some time before you speak with a representative.
Online: Start the process at https://www.ssa.gov/benefits/disability/.
By Mail: You can apply by mail by completing a written application and mailing it to the address on the application. You can obtain the application at your local Social Security office, or online.
What if Social Security says I do not qualify for SSI because of my countable resources?
There are situations where a person with disabilities is determined to be ineligible due to the ownership of property or assets, such as a small inheritance from a parent or grandparent, a joint and undivided interest in a family farm or ranch, mineral interests that are producing little or no revenue, or a retirement account from which the person cannot yet make withdrawals without a penalty. In some cases, there are options for handling the excess resources, to permit the applicant to qualify immediately or more quickly for SSI. For example, assets can be sold for fair market value, and the proceeds can be spent down appropriately. In some cases, countable assets can be converted to non-countable resources, by paying down a home mortgage, paying for home repairs, or purchasing a vehicle. When the applicant is disabled and under the age of 65, there may also be the option of establishing a first-party special needs trust, and transferring the assets to that trust.
We offer a free initial consultation to prospective clients. You can call or e-mail us to set up an initial consultation, which can occur either by phone or in person according to your preference.
How does a special needs trust help with an SSI application?
Assets held within a valid special needs trust are not “countable resources” for purposes of eligibility for SSI and Medicaid. The property held within such a trust does not count towards the $2,000 resource limit for SSI or Medicaid. When a person with disabilities, and low income, is under the age of 65, and owns property that is in excess of the $2,000 resource limit, it often is possible to establish a first-party special needs trust, and to transfer the excess resources to the trust, in order to qualify immediately for SSI. The pros and cons of doing this should be discussed carefully with an experienced special needs trust attorney. The trade-off for creating a first-party special needs trust is that the trust must provide, upon the death of the SSI recipient or termination of the trust for any other reason, that the state Medicaid agency gets reimbursed from the trust for all medical assistance provided to the recipient during his or her lifetime. In many cases, this is still the best option to ensure that the person with disabilities receives all of the medical care and services he or she needs.
How does Stebler & Sulak, PLLC help with SSI?
In most cases, we do not prepare or assist with the initial SSI application. Instead, we suggest that the person with disabilities, or his or her parent, guardian, or other family member, apply directly with the Social Security Administration. If the SSA determines that there are assets or resources interfering with SSI eligibility, we often can assist with a plan for handling such resources, including (when appropriate) the establishment of a special needs trust to hold and manage such assets. When a person with disabilities is already the beneficiary of an existing special needs trust, and the SSA has determined that the trust is a countable resource, we can assist with an appeal of that decision when appropriate, or with the modification of the trust to ensure that it does not continue to interfere with eligibility for SSI. If you think that we may be of assistance with your situation, please call or e-mail us to arrange a time to discuss your situation in more detail.