SSI - How Does the Money Part Work?
The SSA's focus is on how the person's disability impacts their ability to work and support themself.
Needs-Based
There are two components to qualifying for SSI/SSDI benefits. One is having a disability that impairs/prevents the person's ability to work. The other is how the disability affects the person's ability to support themself. To qualify for SSI/SSDI benefits you must show that you need the financial support.
If someone is providing all or most of the individual's living expenses, then they will not qualify for SSI/SSDI.
Ex. If living with parents the SSA might assume the parents are providing 50% or more of support. This is one reason it is very difficult to get SSI/SSDI if you are married. {Marriage and SSI Benefits}
It is essential that you show that your child is expected to pay his/her own way (paying rent and bills - see more below).
Disqualifications for SSI subsidy:
- able to work enough for income to exceed $1400 per month (as of 2018);
- receiving an adoption subsidy/ trust fund/ annuity that is more than the subsidy amount (in 2023, $914/ mo); - one way around this is to have these monies go into a Special Needs Trust or something similar, these trusts are specifically designed to allow the person to receive SSI/SSDI benefits.
- receiving SSDI that is more than the subsidy amount;
- supported by someone providing all living expenses, including institutions like prison;
- if have more than $2000 in assets (although there are ways around this)...
How is the monthly benefit amount determined?
There are different ways it is determined how much is received:
- If the applicant is a minor then the amount received depends on the parent's income. Unless the parent is well below the poverty level, then SSI for a minor is usually denied.
- If an adult has worked more than a certain length of time, then they would receive SSDI which is based on a percentage of their income when they worked.
- If an applicant is eligible for SSI and one of the applicant's parents receives (or later starts to receive) SSDI (ex. retires or develops a disability) then the adult child gets a percentage of what the parent makes or the SSI amount - whichever is larger.
- If the applicant or receiver of SSI lives in the household of someone else (including with his/ her parents), then if that person is providing support, the base SSI payment is reduced by one-third. Support is any food or shelter that is given to someone or paid for by someone else. In 2018, this amount is $500/mo.
- If the applicant or receiver is being supported completely by someone else (for example in jail for longer than a full calendar month) then they will no longer receive SSI - and will have to reapply if circumstances change.
- If an adult has never worked or hasn't worked long enough to qualify for SSDI, then they would receive SSI. The actual benefit amount fluctuates a little from year to year, but in 2023, the amount was $914/month.
The maximum benefit amount is only $914.00 (in 2023).
That's an annual income of only $10,968.00. The 2023 poverty guidelines for a single person household is $14,580.00.
If a Parent Receives SSDI (due to disability or retirement)
When a parent retires or becomes disabled and receives SSDI, the benefits for a child who receives SSI is 1/2 of the parent's benefit. If the parent dies the child receives 3/4 of the benefits.
If the child's SSI benefit amount is larger than 1/2 of the parent's amount, then the child would receive whichever is higher. This is an "either/ or" situation - the child would not receive both benefit amounts.
Ex. If the parent receives $1700.00 in SSDI then the child would receive the regular SSI benefits ($914) instead of 1/2 of the parent's benefits ($850.00). However, if the parent passes away, the child would receive 3/4 of the parent's monthly SSI benefit ($1,275.00).
If you are appointed the Representative Payee, you will have to open a special Rep Payee account using the SSI benefit check. This account is technically in both your and your child's name, but your child will not have access to it. You will use this account to pay for your child's expenses like rent, food, and living expenses.
Records
For me, it helped a lot to use an Excel spreadsheet to track the money coming in, where this money goes, bank fees, etc. (Don't let this account accrue more than $2K!). I put each year on a new page.
I also use these records to keep track of things like how much of the benefits go toward living expenses. This will be needed for the annual Rep Payee report.
Keeping accurate records is especially important if the person receiving benefits works. I have the formula filled in on this spreadsheet so I don't have to do the math. SSA is 2 months behind. So if you earn X amount in February, you won't see the change in your benefit amount until April.
Document
I've had to contact SSA multiple times due to mistakes on their parts (and mine!). I've learned to note when I contacted SSA to report wages and how much it was for each month so I could keep track of whether or not the amount was correct.
I also keep my notes on the spreadsheets -- contacts with SSA, changes in job history (start/end dates/reason for leaving, company address, phone #), address changes...
Don't forget to report all of these changes to SSA!!.
That way, I can go back and look if I can't remember a date or whatever.
Backpay.
Benefits start from the first of the month following the submission of the application. Kitty applied in mid-April and was not awarded SSI until early October; that means Kitty will have about 5 months of "back pay." How we're handling that is a post for another day, (basically she will use most of it to "pay back" her living expenses while she waited).
Getting the actual monthly check can apparently take quite a while. We got the "backpay" pretty quickly. She was awarded SSI at the beginning of October. We still haven't received the monthly check. It's supposed to be by direct deposit, but we can't figure out to whom we need to give the bank information. The last person we spoke to has not returned my calls - possibly because the call needs to be generated by my child.
Update: I finally got time to actually go in and talk to someone at the Social Security office. It turns out that because I hadn't signed up for direct deposit the money went on a Direct Express card which works like a debit card. This card can be used to pay for things directly, or the money can be transferred into the rep payee account. For some reason, we never received her Direct Express card in the mail (nor did we know to look for it), so she has 5 months of deposits on the card. I ordered a new card and it will take 7 to 10 business days.
Direct Deposit. I got the direct deposit form at the SSA office and took it straight to the bank. It is now in place, but it took a week so the most recent benefit payment also went on her card. Unfortunately, this means that because she didn't (couldn't!) spend the money on her Direct Express card when it finally comes in she will have a little more than $2000 in her account. The guy at the SSA office thinks this may not be a problem since we can prove she didn't have access to the account so she couldn't have spent it, but...
Anyway, I'll be pulling out $2000 immediately to pay back her living expenses, so hopefully, that will be an ignorable blip. What's left will go toward her spending money and bank fees.
Update: No one gave us any problem about there briefly being more than $2K in the account.
What if my child can't handle money?
Representative Payee -
A person recognized and established by the Federal Government to assist a person with a disability with managing their money to pay for their living expenses. No guardianship is needed for this, but it can be an alternative to financial guardianship under federal law.
Rep Payee Account -
Once appointed as Rep Payee, you need to open a Rep Payee account. Do this with the first SSI check, which will be mailed to you (our "backpay" check got here first). The account will be in the child's name. You will only be a "financial agent" on the account. Don't worry, the banks know how to do this.
After you open the account, report the deposit info to the SSA to set up direct deposit. Social Security will make automatic deposits into the account once you report the banking information to them.
The only money that can go into this account is Social Security benefits. Never make any deposits into it that are not from the US Treasury Department.
SSI payments are automatically deposited into the Rep Payee account on or before the 1st of the month.
Rep Payee Reporting
A Rep Payee is required to fill out an annual report. This is a very simple form and can be completed online.
Living expenses need to be reported as a lump sum. ("Living expenses" are food and housing, and or other expenses like clothing, etc)
The report does not request or require receipts for reporting
Getting Benefits for a Child Living At Home
Kitty lives at home so her rent and living expenses are generally paid directly to us. Each month, I transfer the money for her living expenses into our account.
When she lives elsewhere, it will most likely be easier to pay these expenses directly from the Rep Payee account to the place it's owed (rent, utilities...).
Weekly Allotment: Kitty has extreme difficulty handling money. For now, Kitty will receive $15 each week, until she shows she's ready to handle larger amounts at once. One way for her to demonstrate that she's ready will be to show that she can save up her weekly money for something, or at least not spend it all within 24 hours!
{Kitty's SSI payment is automatically deposited into the Rep Payee account and then I have a direct deposit draft of $15/week as her "Weekly Allotment" into her regular checking account to which she and I both have access.}
FAIR SHARE
SSI benefits are needs-based. One thing that affects the amount of benefits received is how much support the person receives from other sources. If a person or institution is providing all of the person's living expenses (ex. prison), then the person is not eligible for SSI benefits. If a person or institution is providing some of the person's living expenses, then the amount of the benefit is reduced by that amount.
Many people who live at home will find their benefit is reduced by approximately 1/3. This is because their "fair share" of the household living expenses is greater than their benefit amount. SSA assumes that the difference is being provided by the family.
We recently got our daughter’s SSI benefit upped from $500/mo to the full amount of $750/mo. The amount the person receives has nothing to do with how much rent he/she pays (I‘ve never charged her more than $300, plus a little over $100 in living expenses), instead, it has to do with the person's “fair share” of the (household living expenses). When we moved to a smaller, less expensive home, our daughter could (in theory) pay her "fair share" of the household expenses.
Fair Share
Fair Share Worksheet
- Rent or mortgage payment (including any amount for insurance that is part of the mortgage payment and required by the mortgager) $________
- Property taxes (if not already included in the mortgage) $________
- Electricity (monthly average) $________
- Gas (monthly average) $________
- Any other heating fuel (monthly average for coal, oil, propane, wood, etc.) $________
- Water (monthly average) $________
- Sewer cost (if any and if not included in water bill) $________
- Garbage removal cost (if any) $________
- Food (do not include soap, paper products, personal/hygiene articles, etc.) $________
Monthly Total $________
Divide monthly total $_________ by # of people in the household
= $ _________ your “fair share” amount.
Basically, they add up your mortgage or rent (if you have one), property taxes (if you have them), utilities (electric, gas, water, sewage, trash collection – but NOT phone, even if the phone is a landline, and/or part of the cable package), and groceries (not consumables like paper towels and not fast or restaurant food) --- then they divide that amount by the number of people living in the home (which includes dependent children – even if they are off at college – as long as they still use your home as their permanent address).
If their "Fair Share" is more than the $750 (2018, monthly benefit amount), then you are considered to be supporting them for the rest (whether you are or not). SSA automatically reduces the benefit amount by 1/3 (which is where they get the $500).
Ex. Our old house was much bigger so our mortgage and utilities were higher. It didn’t matter what we were charging her in rent. The Fair Share amount was all they looked at. When we moved and were no longer paying a mortgage, her “Fair Share” came to well below $750. We only had to note that we were charging her rent, but they didn’t even care about the rental agreement (I brought it with me anyway).
Report changes immediately (preferably by going into your local SSA office!). We told SSA about our new address, but they did not increase monthly benefits until we specifically asked for it!
Other Benefits
Because a person receiving SSI/ SSDI benefits is considered to be at (or below) poverty level they are usually eligible for other benefits like WIC/ Food Stamps.
What if My Child is Still In School?
Can your child apply for SSI while still in school? Yes, but be sure to put this fact on the application and bring it up at the interview. This applies to applicants between the ages of 18 and 22 who are regularly attending school.
How can I save more than $2000 for my child's present and future and keep him eligible for Medicaid-based services?
Independent and Pooled Special Needs Trust Through ARC it only takes $600 to establish a master pool trust which is established to work with Medicaid (other trusts may not work with Medicaid).
Special Needs Trust Ask an estate planning professional or attorney about setting up a Special Needs Trust, which enables you to save more than $2000 but not in your child's name.
Able Act The 529A ABLE Act establishes a way to save more money in a person's name while remaining eligible for public funding. The federal ABLE Act, passed in 2014, made way for new state programs—modeled after 529 savings plans—that let those with disabilities, and their families, put aside up to $14,000 a year to be used for a wide variety of disability-related costs, including living expenses. Any individual who is blind or diagnosed with a disability before age 26 and getting benefits through the Social Security disability program is automatically eligible.
Reporting Changes
**Tip** Heads up. You can call in, but the hold time is usually much more than 1 hour, and it does NO GOOD at all. That info is not technically relayed to the SSA office (they have a record that you called in, but the changes probably won't actually be implemented). You have to go into the SSA office. Make an appointment or just go in, but don’t bother calling. Ask me how I know this.
What Situation Changes Do I Need to Report?
Contact your local Social Security office to report (this can be done online, but you might want to go into the local office anyway to confirm it):
- You start or stop work, and/or your wages increase or decrease.
- Your bank account balance goes over $2,000. {You cannot accrue more than $2,000 in assets or you will lose SSI/ Medicaid. Therefore, if something happens to Hubby and me (we're planning on setting up a special needs trust to prevent this), someone names her as a beneficiary in their will, she wins the lottery, she's given something of value, she has savings of any kind (except for some very specific exceptions)... she will lose her SSI/ Medicaid. At this point, her medications alone cost about $2,000/ mo. She NEEDS Medicaid!!}
- You move;
- Anyone else moves into or out of your household;
- Someone in your household dies;
- You marry, separate, or divorce;
- Income or resources change for you or members of your household;
- Your medical condition improves;
- You stop or start attending school regularly;
- You leave the US and plan to be gone for 30 days;
- You are in a hospital, jail, or other institution for a full calendar month {This is why Bear is not eligible for SSI at this time - he is being fully "supported" by an institution (prison). We will start the application process for him when we have a release date and hopefully, it will start soon after his release};
- A felony warrant for flight or escape or a warrant for violating a condition of parole or probation is issued for your arrest.
How does Medicaid work?
Medicaid is health insurance. Normally it is needs-based, usually meaning you have to be at or below poverty level to receive it. However, Medicaid comes automatically with SSI. http://www.medicaid.gov/
Different Types of Medicaid
There are different types of Medicaid, including traditional and managed care options (STAR+PLUS). Every state has its own Medicaid system so if you move out of state, you have to transfer your Medicaid to the new state. Even if you move from one county to another, you will have to let Medicaid know so they can transfer you.
In recent years, Texas Medicaid (and maybe other states?) have been privatized, so our daughter technically has Amerigroup health insurance. Like United Healthcare (another option), Aetna, Humana... benefits are usually available nationwide (for example, if you're visiting family in another state and get an ear infection, then you can go to a nearby medical provider that will most likely be in-network); however, we learned the hard way that no matter what the private insurance's policies are for other members - they will only pay benefits as though you still had the state's Medicaid (meaning if you get that ear infection, you're paying out of pocket, because state Medicaid is only accessible within your state!!).
Adult Medicaid is different from child Medicaid. For example, it doesn't cover dental after the age of 21.
Getting Medicaid
We applied for Medicaid for Kitty the minute she turned 19 so she would have continuous health insurance while we waited to find out if she would get SSI. She was turned down. They don't ask all the questions to determine disability that SSI does, so I can only assume they determined she was ineligible based on... I have no idea. Maybe her lack of proven disability? Luckily, we still had Kitty on our private insurance so we only had to pay the co-pays for her medications while we waited for her to be awarded SSI (unfortunately co-pays were about $200/mo).
Medicaid starts the instant your child is awarded SSI. You can then contact Medicaid directly and get information about your case. Just dial 211. For Texas, you can also go online at https://www.yourtexasbenefits.com.
Warning: We've had a really tough time with this website and they don't do any tech support for it (when I mentioned a problem we were having accessing it to the lady at 211, she said that the website was for people who "understood computers". I am very tech capable. There is a glitch in the system that has nothing to do with my technical capability! <-- a="" i="" little="" me="" obviously="" off="" this="" ticked="">
Medicaid ID Card
I assumed they would mail my child a card for Medicaid, but I discovered that once you have a Medicaid number it is yours for life (like your Social Security #). As a former foster child, she had Medicaid for as long as we received adoption subsidies. So we could have started using her old card the minute her SSI was awarded - and therefore would not have had to pay co-pays on her last month's prescriptions. In fact, they will not mail us a new card, so I better go find the old one!
Changes in SSI Status
Because you receive your Medicaid through SSI - you don't need to renew it annually like you would with private health insurance; however, if you lose SSI, you lose your Medicaid, and you will have to reapply.
Let me say that again. If you lose your SSI, you lose your Medicaid!
When our daughter moved, SSI got all confused and kept sending us letters saying she would no longer get SSI benefits after such and such date. We fixed that with the SSA, but the information did not automatically get reported to Medicaid! We usually had to verify the information with them as well.
Getting Medicaid Started
Administered by Social Security
Most states automatically grant Medicaid when you get approved for SSI based on disability. The Social Security Administration handles Medicaid enrollment for SSI recipients when they are approved for SSI.
Alabama, Arizona, Arkansas, California, Colorado, Delaware, District of Columbia, Florida, Georgia, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Montana, New Jersey, New Mexico, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Vermont, Washington, West Virginia, Wisconsin, and Wyoming.
Administered by the State
A few states use the same income, resource, and disability criteria that Social Security uses for the SSI program, but require you to file a separate Medicaid application.
Alaska, Idaho, Kansas, Nebraska, Nevada, Oregon, Utah, and the Northern Mariana Islands.
States With Their Own Medicaid Eligibility Criteria
Some states use more restrictive eligibility criteria for Medicaid than SSI's. In most of those states. The federal government does limit how restrictive the states can be when screening SSI recipients for Medicaid eligibility.
Social Security calls these the “209(b) states.” Section 209(b) of the Social Security Amendments of 1972 gave states the option to use their own criteria for Medicaid. (Indiana ceased being a 209(b) state in 2014).
Connecticut, Hawaii, Illinois, Minnesota, Missouri, New Hampshire, North Dakota, Ohio, Oklahoma, and Virginia.
Moving from SSI to SSDI
There are ways to keep Medicaid if you move from SSI to SSDI but you must fall into a certain category. (and a new Medicaid application is usually required). After 24 months, you will most likely need to switch to Medicare. I won't even pretend to know how all that works, so I highly recommend doing your own research.
What is HIPP?
HIPP is the Texas Health Insurance Premium Payment (HIPP) program. HIPP helps pay your whole family's health insurance payments as long as it is cheaper for them to pay your insurance premiums than to be responsible for your child's entire medical bills.
Ex. Without insurance, Kitty's medications alone cost about $2000/ mo. Our private insurance ends up covering about $1800 of that. If we didn't have private insurance, Medicaid would be paying all $2000. If our monthly premium for health insurance for the entire family is $750, then Medicaid is saving at least $1050 by paying our premium.
We have always had Kitty covered under both our private insurance and Medicaid because there are a lot of things Texas Medicaid doesn't cover (residential treatment, dental, testing and evaluations, certain types of therapies...).
So, in my "spare time," I'll be applying for this using this form. Every month, we'll have to submit Hubby's paycheck showing that he paid the monthly insurance premium.
What If My Child Has Private Insurance?
Private insurance is always listed as Primary and Medicaid is listed as Secondary. This means that our private insurance covers the bills, except for the deductible and co-pays - which are picked up by Medicaid. From the private insurance's point of view, WE were paying the co-pays, which went toward our deductible. Toward the end of the year, (sometimes faster if Kitty was in and out of psych hospitals a lot) our family deductible would be paid and the whole family would benefit. We could also afford to get Kitty some extra services that Medicaid didn't cover.
What If My Child Works?
Ticket to Work supports career development for Social Security beneficiaries aged 18 through 64 who want to work. The Ticket program is free and voluntary. The Ticket program and Work Incentives allow you to keep your benefits while you explore employment, receive vocational rehabilitation services and gain work experience. Your cash benefits and Medicaid or Medicare often continue throughout your transition to work, and there are protections in place to help you return to benefits if you find you are unable to continue working due to your disability.
If you use an employment network or State vocational rehabilitation agency to get a job through this program, then you will need to report your earnings/ wages to it AND to Social Security,
How Does the Money Work?
If you work, even part-time, then the SSI benefit amount would be reduced by a percentage of your earned income. For more details go here.
Obviously, if you earn "too much" money (about $1400/mo) then you lose your benefits entirely, but they prefer that you work, so there are some incentives. Including, they don't count some work expenses (such as uniforms, special equipment that helps you work, and transportation to and from work).
SSA uses only gross wages (hours worked x hourly wage) - the actual amount on the paycheck does not matter to them.
2 Month Delay
You need to report your wages every month (by the 6th day of the following month). The work income you received 2 months prior affects your payment amounts. If you stop working or start earning less, you need to tell the Social Security Office ASAP so they can increase your SSI payments (or start SSI and Medicaid again if they have stopped).
Ex.
Kitty worked part-time at a minimum-wage job in the evenings and on weekends. She applied for SSI benefits in April and was awarded it in May. She increased her hours a little when she graduated in June, but then quit when she briefly moved to Nebraska at the beginning of July.
For the months of May and June, she made about $700/mo at her job - this is a Gross amount (vs Net) so it is the number of hours worked multiplied by the amount paid (in her case, minimum wage).
In May 2014, Kitty earned $707.91 at her job. (~98 hours at $7.25)
$707.91
- 20.00 (by law $20 of wages is not counted)
$687.91
- 65.00 (by law $65 of wages is not counted)
$622.91
-311.46 (by law they don't count 1/2 this amount - 1/2 of $622.91= $311.46)
$311.45
+ 237.93 (value of food and shelter - SSA reduces Kitty's Maximum Benefit by 1/3 because they assume we supplement Kitty's living expenses)
$549.38 Total Income counted.
$721.00 Maximum Benefit Amount
-549.38 Total income counted
$171.62 Total Monthly SSI Payment
In May and June, Kitty will receive her usual $483. Even though Kitty didn't work in July - her SSI payment for that month was based on the income she received in MAY.
Even though Kitty didn't work in August - her SSI payment was based on the income she received in JUNE.
In September, her benefits will go back to $483.
Reporting Wages
Report monthly wages during the first 6 days of the following month. To report earnings you have 3 choices. I highly recommend the app (even though I'm not normally an app person).
1. Telephone Wage Reporting You can call it in (866) 772-0953 or use the app. We called it in and were told that we also needed to mail in the pay stubs. This may be because she only held the jobs for less than a week each so there was no point in setting up the app. They recommend you call by the 6th of the month, but you can call at any time after the end of the month you are reporting.
2. Download an app (SSI Mobile Wage Reporting Smartphone App). You report the monthly number of hours times the rate they’re paid. For example, my daughter worked 100 hrs at the rate of $6.50/hr so I would report her income as $650. I don’t know if you have to be your child’s Rep Payee (I am), but I do know you enter your own SSI number and info and then tell it you're reporting the wage info for someone else (and give his/ her SSN# at that point). I guess if you’re not your child’s Rep Payee, then your child could technically report his own wages.
3. Report by mail. The other option is mailing in a copy of the paystubs for every month by the 6th of the following month to your local Social Security office. Include the wage earner's social security number.
4. Report Online. You have the option to report wages online, but only if the child has SSDI (not SSI).
WHAT YOU NEED BEFORE YOU REPORT WAGES BY TELEPHONE OR MOBILE DEVICE
- The Social Security number of the person who is making the wage report (YOU if you're the Rep Payee);
- The Social Security number of the wage earner;
- The TOTAL monthly amount of gross wages for the wage earner. Gross wages are the amount of pay before taxes and other deductions (hours worked x hourly wage);
- The caller’s or mobile device user’s name as it appears on their Social Security card.
What specific earnings information do I have to report?
- monthly gross wages (that is the amount before taxes or other deductions are subtracted);
- if you start or stop working;
- increases or decreases in your wages or self–employment income;
- if you start or stop a second or third job;
- work expenses related to your disability; and
- if you are blind, any work expenses.
What earnings information does Social Security need to see?
- every pay stub, including pay stubs for overtime, vacations, and bonuses;
- if self–employed, copies of your Federal Income Tax Forms Schedule SE, Schedule C, Schedule C–EZ, or Schedule F;
- receipts for work expenses related to your disability;
- if you are blind, receipts for any work expenses; and
- receipts for expenses paid to reach your Plan to Achieve Self–Support(PASS) employment goal.
Additional Posts about SSI
Disclaimer
This post was written in 2017, much of the information has been updated, but may no longer be current, correct, and/or applicable in your situation. The information provided here is for educational and informational purposes only and is not intended to be a substitute for a consultation with a professional licensed or knowledgeable in this area.
I am an individual contributor and not authorized in any way to give legal, financial, or medical advice. While I have made strong efforts to ensure that the information in this blog is as correct, complete, and up-to-date as possible, much of what you will find here is based on my personal opinion and experience. I assume no responsibility or liability for any errors or omissions in the content of this site.
The information contained in this site is provided on an "as is" basis with no guarantees of completeness, accuracy, usefulness, timeliness, or of the results obtained from the use of this information..." Please research and verify any and all information you find here. Use at your own risk.
