SSI Eligibility Not Readily Obvious

How often do I see charts showing that the income limit for SSI is $623/934?  Very often.  And it leaves me wondering how many people rely on a simple number to assume that a person will not qualify for SSI.  The problem is that SSI is an easy benefit to define, but it is not so readily easy to determine whether a particular person should apply.  

SSI is a federal benefit for persons 65 and over, blind or younger than 65 and disabled (unable to engage in substantial, gainful employment). A person with low income and resources who becomes aged or disabled and did not pay into the Social Security system, or did pay into the system but who has very low Social Security or did not earn enough quarters, will qualify for SSI to bring his or her income up to an amount known as the federal benefit rate (FBR). The FBR, which is adjusted for inflation every January, is set for 2007 at $623 for single persons and $934 for couples.  VA Aid and Attendance does not count.  The resource limits are $2000 for single persons and $3000 for couples.  Up to $1500 in burial insurance or the face value of insurance, an automobile and home property does not count.  If a person qualifies for even one dollar of SSI, he or she will qualify for Medicaid coverage to pay for routine and necessary health care while living in the community (not to be confused with Medicaid to pay for long-term care).

But here is the catch - many people do not know that they qualify for SSI due to how income is defined.  After certain deductions from income are allowed, the countable income must fall below the federal benefit rate. 

In determining whether someone should apply for SSI, the first question is whether he or she is married to know the income limit beneath which his or her income must fall, and the second is the source of income (is it earned, is it VA Aid and Attendance?).   

If the person does not have earned income, then the only income deduction available is the first $20 worth of unearned income.  So a person with unearned income can actually have income as high as $642 or $953 (single or couple) because after subtracting $20 from those amounts, the income will fall $1 below $623 or $934, qualifying that person for $1 worth of SSI.  

If a person has earned income, he or she can have even higher income and qualify for SSI because the first $65 worth of earned income plus one-half of the remainder is completely disregarded. 

Example:  Single person X receives $300 worth of Social Security monthly.  He is on Medicare and has Medicare Part B.  Add $93.50 to his unearned income because that amount has been deducted from his Social Security check to pay for the Part B premium.  His gross unearned income is $393.50.  His monthly gross earned income of $501per month.  Total income is $894.50.  After subtracting $65 from the gross earned income, the balance is $436.  Divide by 2 and this leaves $218 that is counted.  Add that to the $393.50 Social Security for a total of $611.50.  Subtract the $20 disregarded for a total countable income of $591.50.  The FBR is $623 - countable income of $591.50 = $31.50.  This person will qualify for $31 per month of SSI to bring countable income up to the $623 federal benefit rate.

Use this quick test:

• Monthly gross earned income
• Subtract $65.00
• Divide by 2
• Add gross unearned income
• Subtract $20.
• Does the person's countable income fall below the applicable FBR?

In the late 1980’s SSI regulations changed to allow a person to give away property to become eligible for SSI benefits.  Several years ago regulations changed back to the old rule that assesses a transfer penalty on transfers of property for less than fair market value.

Apply for SSI at your local Social Security office.
 
 

Comments

[Jennifer Blackchief]

Thank you for your article. I have been trying to explain to SSI that VA Aid and Attendance does not count towards determining income eligibility for SSI, yet they disagree. To date, VA has been unable to produce legislation or other proof to substantiate my argument.

Your article stated, "A person with low income and resources who becomes aged or disabled and did not pay into the Social Security system, or did pay into the system but who has very low Social Security or did not earn enough quarters, will qualify for SSI to bring his or her income up to an amount known as the federal benefit rate (FBR). The FBR, which is adjusted for inflation every January, is set for 2007 at $623 for single persons and $934 for couples. VA Aid and Attendance does not count. "

Where may I find something a bit more substanital to support my argument?

Thank you for being a critical resource in protecting our aging community.

Regards,

Jennifer Blackchief
Administrator
The Bristol Home Assisted Living Residence
Serving exclusively women since 1868

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[Jan Neal]

Jennifer, see The Social Security Handbook Section 2137 concerning unearned income pursuant to a federal statute:

http://www.socialsecurity.gov/OP_Home/handbook/handbook.21/handbook-2137.html