Supplemental Security Income (SSI) is a federal means-tested program administered by the Social Security Administration (SSA) in the United States of America. SSI provides financial assistance for people who are unable to work. This includes seniors and people with disabilities.
SSI provides cash assistance to people who are at least 65 years old, blind, or meet the Social Security standard of disability, and have very low income and limited assets. Eligibility to receive SSI depends, in part, on an individual or couple having countable resources that are no more than the resource limit of $2,000 for an individual or $3,000 for an eligible couple.
In addition to strict income and resource limits, there are other restrictions that involve citizenship, residence, and institutionalization that are not covered in this blog post.
How SSI Defines a ‘Resource’
Resources are things you own such as cash, bank accounts, stocks, savings accounts, U.S. savings bonds, land, life insurance, personal property, vehicles and anything else you own which could be changed to cash and used for food or shelter.
In addition to the above, SSI has a category of resources called “deemed” resources. A deemed resource is a portion of the resources of the potential claimant’s spouse, parent, parent’s spouse, sponsor of an alien, or sponsor’s spouse. Deemed resources were designed to prevent fraudulent transfers of resources among parties and/or to discourage inappropriate use of the SSI program.
Most children under the age of 18 often don’t have accumulated resources and live with their parents so there are different rules that apply to their claim.
If a child under age 18 lives with one parent, $2,000 of the parent’s total countable resources does not count. If the child lives with 2 parents, $3,000 does not count. Social Security counts amounts over the parents’ limits as part of the child’s $2,000 resource limit.
SSI does exclude a large number of resources from their requirements. Excluded resources include:
- the home you live in and the land it is on
- one vehicle, regardless of value, if you or a member of the household use it for transportation
- household goods and personal effects (e.g. your wedding and engagement rings)
- life insurance policies with a combined face value of $1,500 or less
- burial spaces for you and your immediate family
- burial funds for you and your spouse, each valued at $1,500 or less
- property you or your spouse use in a trade or business, or on your job if you work for someone else
- if you are disabled or blind, money or property you have set aside under a Plan to Achieve Self-Support (PASS)
- up to $100,000 of funds in an Achieving a Better Life Experience (ABLE) account. Learn more about the ABLE program here.
- retroactive SSI or Social Security benefits for up to 9 months after you receive them (including payments received in installments);
- grants, scholarships, fellowships, or gifts set aside to pay educational expenses for 9 months after receipt;
- money saved in an Individual Development Account (IDA) (See the SSI Spotlight on IDAs);
- support and maintenance assistance and home energy assistance that SSA does not count as income;
- cash received for medical or social services that SSA does not count as income is not a resource for 1 month;
- EXCEPTION: Cash reimbursements of expenses already paid for by the person are evaluated under the regular income and resources rules.
- health flexible spending arrangements (FSAs);
- State or local relocation assistance payments are not counted for 12 months;
- crime victim’s assistance is not counted for 9 months;
- earned income tax credit payments are not counted for 9 months;
- dedicated accounts for disabled or blind children (see Deeming Eligibility Chart for Children);
- disaster relief assistance which we do not count as income;
- cash received for the purpose of replacing an excluded resource (for example, a house) that is lost, damaged, or stolen is not counter for 9 months;
- All Federal tax refunds and advanced tax credits received on or after January 1, 2010 are not counted for 12 months;
- The first $2,000 of compensation received per calendar year for participating in certain clinical trials; and
- Some trusts (See the SSI Spotlight on Trusts).
Transfer of Resources
Before you transfer or accept any resources from someone else, it’s very important to understand how that may affect your SSI benefits.
An SSI applicant or recipient who transfers a non-excluded resource to another person for less than fair market value could become ineligible for SSI benefits for up to 36 months.
Individuals cannot simply transfer countable resources to gain eligibility for SSI. A common problem occurs when SSI recipients are notified by SSA that their benefits will be suspended because they are over the resource limit but are told nothing about the transfer penalty. The recipients then give away the excess resource(s) under the impression this will help them retain their SSI benefits. Instead, when they return to SSA and explain that they have disposed of the resource by giving it away, they then learn they will continue to be ineligible for an extended period because of the transfer penalty.
The SSI transfer penalty only applies when an individual transfers a non-excluded, or countable, resource to another person for less than fair market value. If an individual transfers or otherwise disposes of a resource for fair market value, they are not subject to the resource transfer penalty. However, other SSI income and resource rules may affect eligibility.
As you can see, understanding and abiding by the resource requirements set by SSI is a complicated matter. We encourage potential claimants to consult with a qualified disability lawyer before applying for any Social Security disability program alone.