Supplemental Security Income [SSI] Basics

Supplemental Security Income [SSI] is a federal program that helps people with disabilities and very low income pay for food, clothing and shelter. SSI is often confused with Social Security Disability Insurance [SSDI]. One of the main differences between them is that SSDI  is available to people with disabilities regardless of how much they earn or what their assets are, while SSI places very strict limits on a recipient’s income and assets. However, in most states, an SSI beneficiary may also qualify for Medicaid health coverage which is very valuable to them.

Because SSI places restrictions on  income and assets, its best to know the basics of the program before deciding if it’s right for you and your family.   

Requirements:

• Eligibility - In order to be eligible, you must be “aged, blind or disabled”                                                                         This first requirement is often the hardest for SSI applicants to meet, in large part because the federal government's definition of "disabled" is so narrow. In essence, adult SSI applicants who are seeking benefits based on a disability must show that they are almost completely unable to work at any job whatsoever. The applicant must have a physical or mental impairment that makes it impossible for him to engage in any "substantial gainful activity," and this impairment must be expected to last longer than one year or to result in death. If an applicant is able to engage in substantial gainful activity, then he will typically not be eligible for SSI. A child applicant must have a physical or mental impairment that results in marked and severe functional limitations and can be expected to last for longer than one year or result in death. In one recent case, it took a cancer survivor 14 years to prove that she was "disabled" and therefore entitled to benefits.         
• Resources - An SSI Beneficiary Must Have Very Limited Resources                                                                       Once an SSI applicant has shown that they are disabled, they must also prove that they have less than $2,000 in countable resources for an individual, $3,000 for a couple. A resource would include any funds held in the applicant's bank accounts, retirement accounts, or in cash. If the applicant has set up a trust that does not meet specific requirements, the trust funds may also be counted against the $2,000 limit. The applicant's own home will not be considered an available resource, and their car is also exempt. The $2,000 resource limit does not disappear once a person qualifies for SSI. If the value of a beneficiary of SSI benefits has resources over the allowable limit at the beginning of the month, they cannot receive SSI for that month. IN order to receive benefits again they must sell or dispose of the resources “for what they are worth”.
• Income                                                                                                                                                                     SSI recipients get only a modest monthly benefit, and this sum is reduced by any income they may have. The monthly maximum Federal amounts for 2015 are $733 for an eligible individual, $1,100 for an eligible individual with an eligible spouse, and $367 for an essential person. The monthly amount is reduced by subtracting monthly countable income. In the case of an eligible individual with an eligible spouse, the amount payable is further divided equally between the two spouses. Some States supplement SSI benefits.

Supplemental Needs Trusts Can Help
Although SSI's income and asset rules are highly restrictive, the use of "Special Needs" or "Supplemental Needs" trusts can protect an SSI beneficiary's assets while allowing them to maintain SSI eligibility. Relatives and friends of the SSI recipient can also set up a trust for the recipient and fund it with their own money. If properly structured, these trusts also will allow an SSI recipient to continue receiving benefits. Unfortunately, a poorly drafted special needs trust can destroy any hopes an applicant has of ever qualifying for SSI.

Quality Advice Is Necessary
As with all of our posts, this article is intended for information purposes only and not legal advice. SSI is a very complicated program, it is essential to seek the advice of an attorney who specializes in SSI benefits and can guide you or your family through the complicated process of obtaining and maintaining SSI benefits.

Thank You