Supplemental Security Income (SSI) is a critical federal program designed to aid elderly, blind, and disabled individuals with limited income and resources. Navigating its complexities, particularly understanding what resources and incomes are excluded, is essential for applicants and recipients.
This blog explores the nuances of SSI exclusions, covering everything from countable resources to unearned income, burial funds, and educational expenses.
Supplemental Security Income (SSI) offers a lifeline to many, but navigating its complexities, especially around resource exclusions, can be challenging. Here's a closer look at the rules and nuances that govern what's excluded from SSI's resource calculations.
Supplemental Security Income (SSI) is a program administered by the Social Security Administration (SSA) designed to provide financial assistance to aged, blind, and disabled individuals with limited income and resources. Understanding the resource exclusions is crucial for applicants and recipients, as it directly impacts eligibility and the benefit amount.
When determining eligibility for SSI, understanding what is considered a countable resource is essential. These are assets that can impact your SSI benefits, and knowing them helps in effective planning.
In the context of Supplemental Security Income (SSI), countable resources refer to assets that are taken into account when determining a person’s eligibility for SSI benefits. These resources are items or properties that an individual owns and could potentially convert to cash. This cash could then be used for necessities like food or shelter. The Social Security Administration (SSA) closely scrutinizes these resources to ensure they fall within the permissible limits for SSI eligibility.
Some common examples of countable resources for SSI include:
Cash: Physical currency or money in hand is considered a countable resource.
Bank Accounts: Funds held in checking or savings accounts are countable resources.
Stocks, Mutual Funds, And U.S. Savings Bonds: Investments in the stock market or government bonds are counted.
Land: Real estate property, excluding the primary residence, is a countable resource.
Life Insurance: Certain life insurance policies, depending on their value, can be considered as resources.
Personal Property: Items of significant value, possibly including collectibles or other valuable personal items.
Vehicles: Additional vehicles beyond the one exempted vehicle are considered countable.
Other Convertible Assets: Any other assets that can be converted into cash and used for living expenses.
Deemed Resources: This includes resources of a spouse, parent, or sponsor that are deemed to belong to the SSI applicant under certain conditions​​.
“Items like wedding and engagement rings are among the personal effects excluded from SSI's countable resources.”
In the realm of SSI, not all income is treated equally. Unearned income exclusions play a pivotal role in benefit calculations. Here's an exploration of these exclusions and their impact on SSI benefits.
Unearned income exclusions in the context of Supplemental Security Income (SSI) are specific types of income that the Social Security Administration (SSA) does not count when determining an individual's eligibility and benefit amount for SSI. These exclusions are crucial as they allow individuals to receive certain types of income without affecting their SSI benefits. Unearned income typically refers to money received not as a result of employment or business activity.
The SSA provides a comprehensive list of unearned income exclusions, including but not limited to:
General Exclusion: The first $20 of most income received in a month is not counted.
Earned Income Exclusion: The first $65 of earnings and one–half of earnings over $65 received in a month.
Supplemental Nutrition Assistance Program (SNAP) Benefits: The value of SNAP benefits (formerly known as food stamps) received.
Income Tax Refunds: Refunds from income tax payments are not considered as countable income.
Home Energy Assistance: Assistance provided for home energy needs.
State Or Local Assistance: Assistance based on need and funded by a state or local government, or an Indian tribe.
Infrequent Or Irregular Income: Small amounts of income received irregularly or infrequently.
Interest And Dividends: Interest or dividends earned on countable resources or resources excluded under other Federal laws.
Educational Assistance: Grants, scholarships, fellowships, or gifts used for tuition and educational expenses.
Nonprofit Assistance: Food or shelter provided based on need by nonprofit agencies.
Loans: Loans (cash or in-kind) that the individual is obligated to repay.
Third-party Payments: Money spent by someone else to pay the individual's expenses for items other than food or shelter (e.g., telephone or medical bills).
Plan To Achieve Self-Support (PASS): Income set aside under a PASS.
Student Earned Income Exclusion: Earnings up to $2,220 per month to a maximum of $8,950 per year (as of 2023) for a student under age 22.
Impairment–Related Work Expenses: Costs for items or services that a disabled person needs to work.
Work Expenses For Blind Individuals: Costs incurred by a blind person to work.
Disaster Assistance: Assistance received in the event of a disaster.
Clinical Trial Compensation: The first $2,000 of compensation received per year for participating in certain clinical trials.
Tax Credits: Refundable Federal and advanced tax credits received on or after January 1, 2010.
Indian Trust Fund Payments: Certain exclusions on payments from Indian trust funds to members of federally recognized tribes​​​​.
Planning for the future is a critical aspect of financial well-being, particularly when it comes to burial expenses. SSI offers exclusions for burial funds, providing relief and support in these planning efforts.
A burial fund, in the context of Supplemental Security Income (SSI), is money specifically set aside to pay for an individual's burial expenses.[1] This can include funds in a bank account, other financial instruments, or prepaid burial arrangements. Notably, individuals are permitted to pre-pay for their burial by contracting with a funeral home and paying in advance. In the SSI program, these funds are often treated differently from other assets or resources.
Exclusion Limit: Individuals and their spouses are allowed to set aside up to $1,500 each for burial expenses. Typically, this amount does not count as a resource for SSI.
Interest Earnings: Any interest earned on the burial fund that remains in the fund is not counted as a resource or income for SSI purposes and does not affect SSI benefits.
Setting Up A Burial Fund: A burial fund must be clearly designated for burial expenses. This can be done by titling an account as a burial fund or by signing a statement detailing the amount set aside for burial expenses, the intended beneficiary of the fund, the method of setting aside the money, and the date the money was first set aside.
Penalties For Misuse: If money from a burial fund is spent on items not related to burial expenses, it may result in penalties.
These exclusions are critical in helping individuals plan for future expenses without jeopardizing their eligibility for SSI benefits. It's important for SSI recipients or applicants to understand these exclusions and comply with the guidelines to avoid any potential issues with their benefits.​​​​​
“Interest earned on burial funds does not count as a resource or income for SSI, providing financial relief for future planning.”
SSI takes into account various assets, but certain personal properties and life insurance policies enjoy exclusions. Understanding these can provide significant clarity and aid in financial management for SSI recipients.
In the Supplemental Security Income (SSI) program, certain personal property items and life insurance policies are excluded from being counted as resources. This means they are not considered when determining an individual's eligibility for SSI benefits.
Household Goods And Personal Effects: Items like household goods and personal effects, including wedding and engagement rings, are typically not counted as resources. This exclusion is significant as it allows individuals to retain essential personal items without affecting their SSI eligibility.
Life Insurance Policies: Life insurance policies are also subject to exclusion but with a specific limit. Policies with a combined face value of $1,500 or less are not counted as resources for SSI purposes. This means if the total face value of an individual’s life insurance policies does not exceed $1,500, these assets are not considered in the SSI resource evaluation.
Educational expenses for disabled individuals are subject to specific exclusions within the Supplemental Security Income (SSI) program. These exclusions are designed to support disabled individuals, particularly students, in their educational pursuits without negatively impacting their SSI benefits.
The Student Earned-Income Exclusion (SEIE) is a significant provision that benefits students under the age of 22 who are receiving SSI.[2] This exclusion allows these individuals to earn income, which would typically be considered in determining SSI eligibility and benefits, without it affecting their status.
For the year 2023, the SEIE specifics are as follows:
The SEIE permits the exclusion of up to $2,220 per month in earnings, with a yearly maximum exclusion limit of $8,950.
This exclusion is adjusted annually based on increases in the cost-of-living index.
The SEIE applies before any other exclusions are considered.
To qualify for the SEIE, the student must be "regularly attending school," which is defined by the following criteria:
In College Or University: Attending at least 8 hours a week under a semester or quarter system.
In Grades 7–12: Attending for at least 12 hours a week.
In A Training Course For Employment: Attending at least 12 hours a week (or 15 hours if the course involves shop practice).
In A Home School Situation (Grades 7-12): Complying with the home school law of the State or jurisdiction and attending at least 12 hours per week.
Attending for less time than indicated above due to reasons beyond the student's control, such as illness.
In addition to the SEIE, other educational expense exclusions for disabled individuals include:
Grants, scholarships, fellowships, or gifts that are used specifically for tuition or educational expenses. These are not counted as income for the purposes of SSI eligibility and benefit calculation.
These exclusions are integral in ensuring that disabled individuals pursuing education can do so without the risk of losing their vital SSI benefits. They represent a crucial aspect of the support system provided by SSI to promote the educational and career development of disabled students​.
Understanding SSI resource exclusions is crucial in maximizing benefits and ensuring eligibility. From countable resources to exclusions for burial funds and educational expenses, this knowledge empowers recipients to make informed decisions. Staying updated with the latest guidelines and seeking professional advice when necessary can further aid in effectively navigating the complexities of SSI. As always, it's important to consult directly with the SSA or a qualified professional for personalized guidance.
Our detailed guide explains how to avail SSI caretaker benefits. Explore Benefits Aid's comprehensive resources to learn more.