August 01, 2017

Understanding Resources in the Supplemental Security Income (SSI) Program

by Eric Carlson, Mary M. Aquino & Kate Lang

(The pdf for the issue in which this article appears is available for download: Bifocal, Vol. 38, Issue 6.)

Supplemental Security Income (SSI) is a federal means-tested program administered by the Social Security Ad­ministration (SSA). Eligibility is based upon disability or age (65 or older) and financial need. SSI provides subsistence cash assistance to people who are at least 65 years old, blind, or meet the So­cial Security standard of disability, and who have very low income and limited assets.

    Financial need is measured in terms of income and assets or resources. SSI has many complicated financial eligi­bility rules, including the treatment of resources. The countable resources of an SSI recipient may not exceed $2,000 for an individual or $3,000 for an eligible couple. A resource is defined as cash or other liquid assets or any real or per­sonal property that an individual owns and could convert to cash to be used for his or her support and maintenance. But the SSI resource limit has not been updated since 1989. This stagnant limit that has not been adjusted to reflect inflation in almost 30 years causes significant prob­lems for individuals who would otherwise be eligible to receive SSI. Some of the more common resource problems for individuals on SSI include having an ownership interest in property where the recipient is not currently living, re­ceiving a lump sum settlement, and receiving an inheritance.

    Additionally, applicants and recipients cannot simply transfer countable assets to gain eligibility for SSI. Simi­larly they cannot decline resources that they are entitled to receive, such as inheritances. An SSI applicant or recipient who transfers a resource to another person for less than fair market value or declines to receive a resource could become ineligible for SSI benefits for up to 36 months. Anything that fits within the SSI resource definition is a re­source for purposes of this transfer penalty.

    A common scenario is where an SSI recipient is noti­fied by SSA that her benefits will be suspended because she is over the resource limit, but is told nothing about the transfer penalty. She then gives away the excess resource under the impression this will help her retain her SSI ben­efits. Instead she then learns she will continue to be ineli­gible for an extended period because of the transfer penalty.

    There are exceptions to the transfer penalty, including undue hardship, where the failure to receive SSI would re­sult in the loss of food or shelter, and the individual’s total available funds do not exceed the applicable monthly pay­ment rate for the individual’s living arrangement.

    A gift of cash by an SSI recipient is a transfer of re­sources and may result in a period of ineligibility if, when added to the individual’s other resources, they exceed the resource limit. Repayment of a loan that one has a legal obligation to repay is not a transfer for less than fair market value. SSI recipients spending money on their own needs never will create a period of ineligibility.

    Understanding how these rules work, the exceptions and what can be done to avoid lengthy periods of ineligibil­ity is critical to the financial stability of low income elderly and disabled individuals receiving SSI benefits.

This session will take place in Inspiration B at 10 a.m. on October 27.

Eric Carlson is a Directing Attorney at Justice in Aging.

Mary M. Aquino is a Senior Attorney for Elder Law with the Elder Law Program at the Baltimore County office of Maryland Legal Aid.

Kate Lang joined Justice in Aging (formerly the National Senior Citizens Law Center) in December 2012 in the Washington, D.C .office as a member of the Economic Se­curity team.

by Eric Carlson, Mary M. Aquino & Kate Lang