Last Updated on June 21, 2023 by Tresi Weeks
A newly proposed rule by the Social Security Administration (SSA) could ultimately change the way “in-kind income” is defined for recipients of Supplemental Security Income (SSI). If you haven’t been working on your special needs trust, now is the time. Read more about the regulations and why a special needs trust attorney in Frisco is essential below.
What Is SSI?
Supplemental Security Income (SSI) is a federal public benefits program that provides monthly payments to individuals with limited means, including people with disabilities and seniors. In many cases, recipients of this type of benefit automatically qualify for Medicaid as well.
In 2023, the federal SSI payment standard is $914 per month for an individual ($1,371 per month for a couple).
SSI Income Guidelines
Individuals who receive SSI must meet very strict guidelines in order to continue qualifying for these public benefits.
For people with disabilities, these guidelines include having an impairment that meets the SSA’s narrow definition of “disability” as well as maintaining specific monthly limits on their assets and income.
SSA’s Definition of Income
As SSI support is intended for those with limited means, any additional income could potentially put an SSI recipient’s benefits in jeopardy.
According to the SSA, income includes “any item an individual receives in cash or in-kind that can be used to meet his or her need for food or shelter.”
An SSI recipient whose income exceeds their monthly SSI award – even if it is unintentionally – can result in the individual losing their benefits or having them lowered by a certain amount.
Historically, SSA has included “free food” in its definition of income. SSI recipients must provide the SSA with details about their food expenses. A recipient who accepts so-called “in-kind support and maintenance” (ISM) in the form of food, such as a supply of groceries brought to the recipient by appointed guardianship and alternatives such as a family member or friend, generally will have their benefits reduced by about one-third.
Fortunately for SSI recipients, this is something to which the SSA is now proposing a shift.
In February 2023, the SSA announced its proposal to omit food from its calculations of ISM. If put into effect, Supplemental Security Income recipients who receive this type of support may no longer see their benefits shrink as a result. In addition, they would no longer need to report their food expenses to the SSA.
“The complexities of our current food ISM policies may outweigh their utility,” the SSA states in its proposed rule. “The current requirements for reporting in-kind food receipts could discourage SSI applicants and recipients from receiving an often informal but important form of help.”
In addition to simplifying reporting requirements for SSI recipients as well as processing time for the SSA, the SSA says the new rule would “provide increased financial security to impacted beneficiaries; provide consistent treatment of food support regardless of source; … and facilitate improved food security among beneficiaries.”
The SSA will be seeking public comments on this proposed rule up until April 17, 2023.
Special Needs Trusts and Special Needs Planning
An individual with disabilities often relies heavily on government benefits such as SSI to access a range of support and services. However, specific financial limits will lead to disqualification from receiving this assistance. A comprehensive special needs trust can help to protect these individuals and ensure they have access to income.
Consult a special needs planning professional in Frisco, Texas to learn more about a special needs trust.