SSI is the basic federal safety net program for the elderly, blind and disabled, providing them with a minimum guaranteed income. Effective January 1, 2012, the maximum federal SSI benefit is $698.00 per month (the amounts go up every January 1).
Although the Social Security Administration (SSA) administers the program, eligibility for SSI benefits is based on financial need, not on how long you have worked or how much you have paid into the Social Security system. However, the financial eligibility rules are quite stringent. If you are seeking SSI benefits because you are disabled, the program’s criteria for determining disability are the same as those outlined in the Social Security disability section.
About 6.6 million persons were receiving SSI payments in December 2000. Fifty-seven percent of these recipients were between the ages of 18 and 64, 30 percent were aged 65 or older, and 13 percent were under age 18. Many older persons who are not eligible for Social Security retirement benefits because they have not accumulated enough work credits may nevertheless be eligible for SSI, and even many of those receiving Social Security retirement benefits may be able to supplement their benefits with SSI payments. It is estimated that 1.5 million elderly who are potentially eligible for benefits never apply for them.
The idea of the SSI program is to provide a floor income level. If you are receiving income from another source, your potential SSI benefit will likely be cut dollar for dollar. In addition, the SSA deems food and shelter you receive from another source to be “in kind” income. As a result, actual SSI benefit payments will vary depending on your income, living arrangements, and other factors.
While the SSI program’s benefits are meager, in most states SSI recipients are also automatically eligible to receive Medicaid, which can pay for hospital stays, doctor bills, prescription drugs, nursing home care, and other health costs. SSI recipients may also be eligible for food stamps and in some cases for special programs for the developmentally disabled.
Who Is Eligible for SSI?
To be eligible for SSI:
You must be either age 65 or older, blind or disabled; You must be a citizen of the U.S., or be a long-time resident who meets certain strict requirements; Your monthly income must be less than the maximum SSI benefit; and You must have less than $2,000 in assets ($3,000 for a couple), although certain resources are excluded in the eligibility determination (see below).
If your income falls below the maximum SSI benefit amount (and you meet the other eligibility criteria), you will likely be eligible for some SSI benefits. The actual amount of your benefit will be the difference between your income and the maximum SSI benefit, with the potential for other minor reductions depending on who provides food and shelter for the disabled individual. For example, if your own unearned income is $420 a month, and the SSI benefit for a single individual in your state is $698 a month, you may receive an SSI check of approximately $298 a month.
At some level, it may not appear worth the trouble to apply and stay eligible for SSI given its relatively low income benefit, but, as mentioned above, the ancillary benefits, especially Medicaid, may make it worthwhile to maintain SSI even if the financial payment is only a few dollars a month. If you are unsure whether your income is low enough, apply anyway. Certain sources of income and support are not counted in determining eligibility, and what may appear to you to be income may not be counted as such by your local Social Security or welfare office. Therefore, if you are living on a small fixed income and you have few resources (assets), it’s worth applying for benefits.
In determining whether your income is low enough to qualify you for benefits, the SSA counts the money you earn in wages or from self-employment, as well as any investment income, pensions, annuities, gifts, rents and interest. Social Security and Veterans benefits are also considered income. Free housing received from friends or relatives may be counted as income as well, based on what such housing would cost in your area.
However, in totaling your income the SSA does not count:
The first $20 per month you receive from most income; The first $65 a month you earn from wages or self-employment, and only half of the amount you earn above $65; Irregular earned or unearned income of not more than $10 and $20 a month, respectively; Food stamps, home energy assistance, and most food, clothing or shelter received from non-profit organizations.
As noted above, you can have no more than $2,000 in countable resources ($3,000 for a married couple living together) to be eligible for SSI. Countable resources (assets) include bank accounts, investments, real estate (other than your residence), and personal property. Also included is any money or property that you hold jointly with someone else. The SSA determines how much your partial ownership is worth and counts that as a resource.
However, certain property is not counted in determining eligibility for SSI, including: Your primary residence, regardless of its value; Your personal and household goods; One car of any value if it is used for transportation for you or a member of your household; Wedding and engagement rings; Property for self-support, such as tools, up to $6,000 in value; Burial plots; some life insurance and burial funds up to $1,500 for each person.
Transferring Resources to Qualify for SSI
If your resources are still above these limits, you may be able to “spend down” to qualify for SSI, similar to the process to qualify for the Medicaid program. After you apply for benefits, you have a short time period to sell or spend your excess resources for fair market value and come under the benefit limits.
If you give away a resource or sell it for less than it is worth in order to get under the SSI resource limit, you may be ineligible for SSI for up to 36 months. The SSA looks at whether or not you have transferred a resource within the previous three years. If you have, it computes a penalty period by dividing the amount of the transfer by your monthly benefit amount.
Thus, if you give your son a $6,000 gift and then apply for a monthly SSI benefit of $698 within three years of the gift, you will not be eligible for SSI for approxmately 8 months (6,000/698=8.6). That 10-month period will begin on the date of the transfer and end 8 months later. In other words, although you can be ineligible for up to 36 months due to a transfer, that is only a cap. The actual period of ineligibility is based on the value of what you transferred divided by the monthly benefit in your state. You should be aware that transfers may be “cured” by the person to whom you made a gift returning it to you. And, finally, there are certain exceptions to the transfer penalty. These include gifts to a spouse (or anyone else for the spouse’s benefit); a blind or disabled child; a trust for the sole benefit of a blind or disabled child; a trust for the sole benefit of a disabled individual under age 65 (even if the trust is for the benefit of the applicant, under certain circumstances).
In addition, special exceptions apply to the transfer of a home. The SSI applicant may freely transfer his or her home to the following individuals without incurring a transfer penalty: The applicant’s spouse; A child who is under age 21 or who is blind or disabled; into a trust for the sole benefit of a disabled individual under age 65 (even if the trust is for the benefit of the applicant, under certain circumstances); a sibling who has lived in the home during the year preceding the applicant’s institutionalization and who already holds an equity interest in the home; or a “caretaker child,” who is defined as a child of the applicant who lived in the house for at least two years prior to the applicant’s institutionalization and who during that period provided care that allowed the applicant to avoid a nursing home stay.
In addition, SSI applicants under the age of 65 will be permitted to transfer their assets to a Special Needs Trust for their benefit (what is often referred to as a self-settled special needs trust or first party special needs trust) and have those assets not counted for purposes of SSI/Medicaid eligibility qualification, but have those assets available to supplement their care during their lifetime.
How to Apply for SSI Benefits
If you think you may qualify for SSI benefits, you can call or visit your local SSA office and apply. You will need to provide the SSA with proof of age and citizenship or legal residence, as well as provide detailed information about your financial situation. Usually, an SSA claims representative interviews you and completes the forms using the information you supply.
You should apply as soon as possible so that you do not lose benefits. If you call SSA to make an appointment to apply, SSA will use the date of your call as your application filing date. If your application is denied, you can appeal. The appeals process is similar to that for appealing Social Security claims denials.
Once you begin receiving benefits, the SSA reviews your SSI eligibility once every one to three years.
Social Security Disability Income (SSDI)
Social Security Disability Insurance (SSDI) is a federal assistance program that provides income to people no longer able to work because of a disability. To qualify for disability benefits, your health must prevent you from sustaining any form of “substantial gainful activity” (SGA) and be expected to last for at least twelve months or result in death. Also, applicants must have earned sufficient work credits. You must have worked five of the last ten years and have forty (40) quarters of credit. The employment requirement may be waived for individuals who became disabled before age twenty-two, as they are entitled to use their parents’ work history to qualify. SSDI has no income or resource limitations—even Bill Gates can qualify for SSDI if he meets the disability criteria and has the appropriate work history.
The Social Security Administration (SSA) employs a five-step to process to determine whether an applicant meets the criteria necessary to be considered “disabled.”
1. Are you currently employed?
If you are working presently, you cannot qualify for Social Security Disability. If your medical condition prevents you from sustaining any form of gainful employment, continue to Step 2.
2. Is your condition “severe?”
Your condition must “interfere with basic work-related activities.” If this is true, continue to Step 3.
3. Is your condition listed in Social Security’s List of Disabling Conditions?
If your condition can be found in SSA’s recognized list of Disabling Conditions, you automatically qualify for Social Security Disability. If not, proceed to Step 4.
4. Can you perform the work you did previously?
Even if your condition is not listed on the SSA’s list of Disabling Conditions, your condition will be deemed of equal severity if you can no longer perform your previous occupation. If this is so, continue to Step 5.
5. Can you adjust to another line of work?
If the SSA determines you could adjust to another occupation, your application for Social Security Disability will be denied. However, if the SSA finds you are unable to change occupations because of age, past work experience, and/or education, you will be awarded disability benefits.
If you believe you qualify for SSDI, please consult with a qualified attorney to assist you with your SSDI application. The process can be complex, is designed to result in early denials and can take an extraordinary amount of time.