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).
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 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.
Proposed Rule
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.
Consult with your special needs planner to learn more.
This information is not intended to be a substitute for specific individualized tax, legal or estate planning advice as individual situations will vary. Neither Royal Alliance Associates, Inc., nor its registered representatives or employees, offer tax or legal advice. As with all matters of a tax or legal nature, you should consult with your tax or legal counsel for advice.
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Content provided by the Academy of Special Needs Planners, Copyright 2023